Financial services industry helped guide businesses through sharp downturn: Banks hustled to meet massive PPP demand

Milwaukee-area banks have started to prepare for the imminent return of the Paycheck Protection Program.

President Donald Trump’s signature on a Covid-19 stimulus package means the Small Business Administration will have another $284.45 billion to disburse as forgivable loans. The program was the federal government’s main offer of financial support for businesses. Proceeds from the PPP were meant as an incentive for small businesses to keep employees on the payroll.

During the first rounds, which ran from April to August, businesses in Wisconsin were granted about 89,000 loans totaling close to $9.9 billion. Some lenders from the first iteration of the program are expected to opt out for this next round. Still, banks in the Milwaukee region are getting ready to accept and process more PPP applications.

Associated Bank small business banking director Matt Popelier said the Green Bay-based bank is preparing now so it can start taking applications as soon as the SBA reopens the program. Popelier said the bank started both internal and external communication about restarting its PPP lending once a final version of the bill was ready.

The bank is using lessons from the first rounds to prepare, Popelier said. During that time, Associated emerged as one of the top lenders for businesses in the state. The main lesson, he said, was about automating the application process.

“A lot of that work is going on now to update our internal systems and be able to do the new process,” Popelier said. “A lot of work is starting now, and we’ve got a lot of people working diligently this week and next.”

David Provancher, senior vice president and chief lending officer for Wauwatosa-based Waterstone Bank, said the firm is advising clients to get their payroll information and financial reports together now. To be eligible in the new round of funding, businesses have to be able to demonstrate a 25% reduction in business for a quarter, year-over-year.

For Johnson Bank in Racine, president Dan Defnet said employees are looking at what the bank will require from clients to test their eligibility. Defnet said Johnson Bank would again turn to the automated platform it set up to process PPP applications during the first rounds.

“The big challenge here is really understanding what the guidance is, what the SBA is going to require, what’s being asked of us so we can inform our clients,” Defnet said.

Like Johnson Bank, Hartland-based Town Bank set up a portal during the first go-around with the forgivable loan program. As the reopening of the program nears – although no date has been announced – Town Bank is setting up its portal to meet the regulations for the latest round. The bank also is assembling a team of bankers who will be dedicated to working with clients on their applications.

“At this point, we haven’t received a lot of inquiries,” chief executive officer Jay Mack said of customers’ response. “We’re receiving some, but we do expect that we’ll have fairly strong demand for this next round of PPP 3. At this point, we’re, like everyone else, waiting to learn the final terms of that next phase of the program.”

Commerce State Bank CEO Joe Fazio said the West Bend-based firm would once again make a concentrated effort to serve clients through the PPP. The bank’s philosophy was to put clients’ needs ahead of the bank’s, he said, even if the process was less efficient for staff.

“We just have to make sure we’re geared up and focused on how do we get the information processed properly,” Fazio said. “We’ll focus our resources on that, in respect to our clients’ needs.”

Sara Lesk, Reporter Milwaukee Business Journal