Center City’s Engine Room, a six-year-old web dev startup with a focus on security, was one of the thousands of small businesses that applied for a Paycheck Protection Program loan earlier this month when the federal government released its $2 trillion coronavirus relief plan.
Applications opened Friday, April 3, soon after federal officials announced that $349 billion would go toward small businesses through the PPP loan in the form of two and a half months’ worth of a businesses’ paycheck budget. There was some initial confusion between banks and business owners about what was required or how to file the application, but the $349 billion budgeted for the program went quickly, with Forbes reporting that about 70% of all small businesses in the country had applied for the program.
But today, the federal government opened up a second round of funding for PPP loans, an additional $310 billion, and thousands more business leaders are expected to get approved in the coming days.
How's everyone enjoying this round of the Hunger Games AKA PPP applications opening back up?
— Lisa Lucas (@likaluca) April 27, 2020
M&T Bank, which operates across the mid-Atlantic and Northeast region of the U.S., approved nearly 28,000 PPP loans by April 22, totaling $6.4 billion, a spokesperson said.
Specifically in the Philadelphia region, which includes parts of southern New Jersey, the bank approved 911 loans by that date for a total of $428.5 million. That money went to supporting 37,385 Philly-area jobs.
Engine Room’s founder and president, Dennis Egen, told Technical.ly that he’d applied for the PPP loan for his 10 employees through his usual banker at M&T and had communicated with them in the days leading up to the application opening. It went about as well as it could have gone, he said: He heard back about five days after they’d applied and the money hit the account three days after that.
“It was a long eight days, though,” he said of the waiting.
The company has lost a little bit of business, Egen said, but nothing too drastic yet. But deciding to apply for the program was a “no-brainer,” he said.
“[The program] is out there, and I have the financial responsibility to keep my company going,” Egen said. “But I wasn’t counting on it. You can’t count on it until the funds are in the bank. Thankfully, right now everything is moving.”
Bernie Shields, M&T Bank’s regional president for the Philadelphia market, told Technical.ly he thinks the process went smoothly for their customers because the company had recently put a lot of effort into upgrading its technological abilities. After the federal assistance plan was announced, he said M&T had people working “round the clock” to ensure the bank would be ready to start taking applications.
It did so on Monday, April 6, and spent the days leading up to that date sending FAQs and email blasts of information to its customers, as Chad Palank, M&T Bank’s regional manager of business and professional banking, told Technical.ly.
“We knew volume was going to be heavy,” Palank said. “And that’s what we saw — about 25,000 applications in the first 24 hours or so.”
Palank said M&T saw a range of applications, from companies with a handful of employees to those with hundreds. The average loan M&T approved for the first round of the loan was $245,000.
Shields added that the bank was intentional about making sure the process was first-come-first-served. Across the entire bank, about 31,000 loans were approved — 95% of who applied, he said. And as the second round of funding opens up today, Shields said the applicants who were next in line when the last round of funding ran out will be considered first.
“We were very strict on making sure no client was preferred over another,” Shields said. “Everyone is in the same boat.”
Looking for other funding resources?
- The City of Philadelphia announced that $10 million in small business loan funds is available to local small businesses without relationships to traditional banks, with a focus on urban marginalized communities, thanks to a partnership with Goldman Sachs and Lendistry. Take a closer look at how it’s working in Baltimore, tune in to this PIDC web event Tuesday, April 28, to learn more about how it will work locally, and apply here.
- To learn more about the PPP funding and state-offered options, tune into this PACT webinar, also on Tuesday, April 28.
- Take a look at the City’s roundup of resources for funding or other business services.