Though the COVID-19 pandemic has taken a toll on nearly every sector of the economy, local banks were able to keep hundreds of small businesses afloat in Daviess County by dispersing tens of millions of dollars through the Small Business Administration’s Paycheck Protection Program.
For example, Independence Bank distributed at least $60 million to local businesses through the program.
Kyle Aud, Independence Bank Senior Vice President of Daviess County, said SBA and Congress originally wanted community banks to disperse the forgivable loans to qualified businesses. Aud and his team started taking a deep look at the application process and the PPP program.
“We quickly got the funds out to folks, in part, because we have a large market share in Daviess County,” Aud said. “We were working 70-hour weeks, getting approval and putting [the information] into the SBA.”
That $80 million has not only kept nearly 600 small businesses afloat over the last few months, but it has allowed those businesses to continue paying their employees. Keeping those employees paid has been one of several reasons Owensboro was named the only metropolitan area in the nation to see lower unemployment numbers in June 2020 than in June 2019.
The majority of that $60 million was approved and dispersed within the first three weeks, when there was a rush to get approved because of concern that the $349 billion originally allotted if federal funding would run out.
However, a second round of PPP loans were approved, and Independence Bank eventually awarded 386 loans to local small businesses.
(To see companies in Owensboro that were approved for a federal loan worth at least $150,000, click here.)
Aud said loans ranged from $1,000 to $5.8 million, but 320 of the 386 were approved for $150,000 or less. Aud said most of the loans went to “small mom-and-pop businesses.”
“COVID hit quickly and everything shut down. This allowed companies to keep their employees and still pay them,” Aud said. “We were really successful during that period of time. That ties into the low unemployment numbers we’ve seen on a local level here. We’ve been really proud because we’ve been able to do 386 loans for small businesses and keep 4,000-plus people paid during this time.”
Wade Jenkins, Old National Bank’s Western Kentucky Region President, said their PPP loans saved 141 small businesses from going under during the pandemic. Their average loan totaled $148,936, with loans ranging from $2,000 to $2.4 million.
“The feedback I’ve received is, it was a lifeline that many of them needed to survive,” Jenkins said. “Without them, they may not have survived.”
Jenkins said the SBA revised their original statutes regarding the PPP loans so that businesses could split the loans 60/40 — with employees receiving 60% of the loan, while 40% was able to go toward rent, utilities and other business-related expenses.
While some businesses — namely, restaurants and retail stores — had to close down during the pandemic, the majority of the other businesses Old National Bank supported were able to stay open, Jenkins said. Even more, every business that applied for a PPP loan through Old National Bank received one.
Amy Jackson, regional president of German American Bank, said her lenders approved a large number of PPP loans as well, and that their customers were very grateful for the funds.
“We were administering loans until the last day,” Jackson said. “The changes made in the program to extend it to 24 weeks was very helpful.”
Mayor Tom Watson commended the local banks for helping contribute to the 4.2% unemployment rate that’s put Owensboro’s economy on the map in recent weeks.
“I think that was a big piece of the puzzle, along with the CARES Act funding we received,” Watson said of the PPP loans. “That’s a big key — the fact that people applied for that PPP and were able to keep their business open.”
Aud also said there has been a huge benefit in small businesses having the ability to work with a community bank in receiving their PPP loans.
“It’s an easier process because you know your customer well. With some banks, it’s been a little more difficult,” he said. “We were able to make calls and not go through a portal of sorts. [Customers] were emailing our lenders directly. Then, when we’d work with non-customers, they’d become customers.”
Jenkins called the PPP a positive experience for the small business community of Owensboro-Daviess County.
“We affected 141 businesses, those employees, those jobs, and their livelihoods,” he said. “That’s something to feel good about.”
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