How fast can a big bank and a government agency get a brand-new program established and money flowing from Washington to keep payrolls intact during a pandemic shutdown?
Quicker than you think.
When it’s First Horizon Bank and the U.S. Small Business Administration (SBA), let’s say two weeks and two days.
The Paycheck Protection Program (PPP) was part of the $2 trillion CARE act passed by the House and signed by President Donald Trump on Friday, March 27.
By Friday, April 3, the SBA had the program set up and information flowing to banks and credit unions.
First Horizon, anticipating high demand, had shifted employees to take loan applications. Even Dave Miller, president of the East Tennessee Region, was on the floor, approving loans.
“It was an unbelievable undertaking, a heroic undertaking,” he said of the team effort, “the most amazing accomplishment of my career.”
First Horizon in one week processed over 9,000 applications for loans topping $1.5 billion.
And this week, the money began showing up in bank accounts.
Andy Laverghetta, CEO at Southeastern Retina Associates in Knoxville, said his check came on April 15.
“We have avoided layoffs,” he said. “We cut hours, but did our best to keep (roughly 239 people) employed.” Physicians’ practices and medical services in general were hammered by the COVID-19 scare. Hospitals scrambled to create adequate emergency and intensive care space while urging doctors and patients to delay elective surgery.
Everything moved quickly. “We knew nothing (about the loan process) at first,” said Laverghetta. “First Horizon did a fantastic job,” but “it’s a painful process.” And he wants to be sure that Southeastern Retina has complied with all requirements so that the loan will be forgiven after its eight-week cycle.
In a press statement dated April 15, Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza said the SBA had processed more than 14 years’ worth of loans in less than 14 days. Basically, SBA was already out of money.
Both urged Congress to appropriate additional funds for the Paycheck Protection Program. (The initial appropriation was $349 billion.) “The high demand we have seen underscores the need for hardworking Americans to have access to relief as soon as possible. We want every eligible small business to participate and get the resources they need.”
Dave Miller praised his First Horizon team. “We’ve had loan officers working 24/7, texting with customers at midnight on Sunday, for instance.”
Miller said it helped that First Horizon already had a strong relationship with the SBA (in January, First Horizon was the largest SBA lender in Tennessee). But every bank and credit union had to get up to speed on the new program, he said, and everyone has worked hard. It was an advantage for banks to work with their own customers. But ultimately, this was about keeping Knoxvillians employed and small businesses afloat. “This was important to do for the community.”
Sandra Clark is editor/CEO of KnoxTNToday.com