Necessity truly is the mother of invention. I think community banks have all felt that over the past few weeks as they’ve implemented new innovations in response to the Small Business Administration’s (SBA) Paycheck Protection Program (PPP).
But now we’ve moved into phase two: servicing these loans, which presents a new set of challenges. From borrowers returning funds over red tape fears to a lack of detailed parameters around loan forgiveness, community banks have been contending with unclear requirements related to calculating, tracking, and reporting these loans. And, while the SBA has now made a forgiveness application available, exactly how banks will present the required documentation remains elusive.
“We are currently exploring options to help us with the forgiveness phase of processing these loans,” said ICBA Chairman-elect Robert Fisher, president, CEO and chairman of $471 million-asset Tioga State Bank in Spencer, N.Y. “We feel the forgiveness phase will be more difficult than the approval process.”
ICBA Vice Chairman Brad Bolton, president, CEO and senior lender at Community Spirit Bank, a $147 million asset-bank in Red Bay, Ala., concurs. “I know the forgiveness piece is still not finalized, but I think all banks need some way that the borrower can upload to a central database that when they enter info in, it automatically populates those totals. Then of course, if it could be tied someway to the E-Tran system to automatically upload those documents, that would be awesome as well.”
To address these and other PPP concerns, ICBA, in partnership with AIR, the Alliance for Innovative Regulation and The Venture Center, is hosting the PPP Tech Loan Forgiveness Solution Sprint
Thursday, May 21
Noon – 2 p.m. EST
A virtual pitch event featuring 12 fintechs offering PPP solutions.Register Now
This virtual event will showcase cutting-edge technologies to address managing PPP loan forgiveness requirements. During the two-hour event Thursday, May 21 at noon, 12 fintechs will each conduct five-minute product demos of their PPP-specific offerings before participating in a two-minute Q&A with community bank leaders.
Our goal with this virtual showcase is to enlist fintech allies to help community banks address their PPP process issues today as they continue to develop solutions that can help them grow and iterate over time.
“Now that we have used a digital platform for our lending and e-signatures we will not go back,” summed up ICBA Consolidated Holdings Chairman Jack Hartings, chairman of The Peoples Bank Co., a $309 million-asset bank in Coldwater, Ohio. “We just need to make sure we are with the right partner. “
To register for the virtual event, visit https://bit.ly/ppptech. We hope you’ll join us as we come together to navigate this next phase of PPP.
Charles Potts is ICBA Senior Vice President and Chief Innovation Officer.