The first round of the Small Business Administration's Paycheck Protection Program (PPP) ran out of cash within days of being announced. In that brief period, Lakeside Bank dispersed $18 million dollars and 129 loans to local small businesses here in Southwest Louisiana, an example of Lakeside's commitment to local businesses, nimble decision-making, lender accessibility and liquidity.
"Customers were able to contact us directly and get a response to help them through this process," said E. Jeffrey Mancuso, Lakeside Senior Vice President and Lending Officer.
That was not the case for every Southwest Louisiana business owner. Some told Mancuso their bank was unwilling to take their application or wouldn't return phone calls.
Local community banks, such as Lakeside, were more responsive nationwide. At Lakeside Bank, business owners meet with and know the decision makers at the bank.
"Different than a normal government program, the PPP loan amount isn't taxable if the requirements are met for it to be forgiven," said Mancuso. "It becomes a true grant. The PPP is a U.S. Small Business Administration loan designed to provide a direct incentive for small businesses to keep workers on payroll during the COVID-19 crisis. If it's used to keep all employees on the payroll for eight weeks and 75 percent of the money is used for payroll, the other 25 percent for rent, mortgage interest or utilities, the loan is forgiven. If not, the borrower will have 18 months to pay the loan amount at 1 percent interest."
Lakeside Bank lenders and staff worked late hours to get through technical snafus with the SBA loan portal. Mancuso said Lakeside lenders were particularly vigilant when it came to checking and re-checking the portal throughout the night to ensure applications were being processed during the first round. This effort was on the heels of administering deferred payments for mortgages and other steps to respond to COVID-19's impact on Southwest Louisiana.
"Community banks punched above their weight in the Paycheck Protection Program…" reported the Wall Street Journal in the May 4 online article titled, "Small Businesses Were at a Breaking Point. Small Banks Came to the Rescue."
"Every community banker in this state has put in long hours," Mancuso said. "Some banks were never able to enter a single loan."
Banks needed to be an SBA lender and have a certain designation to participate in the program. Big banks made big funds available to big public companies, draining the pot in a way that wasn't anticipated or intended. For example, the Lakers applied for $4.6 million and have since returned the money, along with several big restaurant chains. It is expected that the second round of funding will benefit more small business owners and close some loopholes.
Making it more challenging for business owners to apply before funds run out is that the loan application requires a completed 2019 IRS Schedule C, and the deadline for filing had been extended to July 15.
"We were notified on Friday afternoon, April 24, that the SBA portal would be available for submitting applications for the second tranche," Mancuso said. By Wednesday, May 6, Lakeside had processed 150 more applications. Mancuso said the bank is still accepting applications. By Thursday, May 7, $183 billion of the PPP $320 billion was approved nationwide.
Overall, community banks continue to provide 50 percent of the small business loans and 82 percent of national agricultural loans despite the fact that big banks control almost 70 percent of banking assets.
As an added boost of confidence in the value of local banking, Lakeside Bank has once again been ranked one of the 200 healthiest banks in the United States in DepositAccounts' "Top 200 Healthiest Banks in America" annual report. Lakeside was awarded an A+ rating and is the only bank in Louisiana included in the 2020 top 200 list. Each year, DepositAccounts.com looks at the financial health of over 10,000 banks and credit unions in the United States. The banks are evaluated based on several factors, including capitalization, deposit growth and loan-to-reserve ratios, and ranked on a scale from F (worst) to A+ (healthiest).
"We are honored to receive an A+ rating from such a prestigious company as DepositAccounts.com," said Roy M. Raftery, Jr., President and CEO of Lakeside Bank. "With that rating we achieved the status of being named one of the "Top 200 Healthiest Banks in America." It was also special to learn we were the only bank in Louisiana to make the Top 200 list. Lakeside Bank's goal has always been to provide depositors in our community a safe place to keep their money. So, if you are looking for a safe bank for your money in these difficult times, maybe it should be Lakeside."
To find out more about the area's healthiest, fastest growing, community and customer-focused local bank, call Lakeside at 337-474-3766 or visit www.mlksb.bank.