Paycheck protection borrowers are forgiven

Bankers who wrote paycheck protection loans are helping businesses get forgiveness, and while economic hardship from the coronavirus quarantine prompted that government assistance, the pandemic accelerated a rural renaissance.

Those insights come from a couple of Hohenwald bankers who have different approaches to the Small Business Administration and the Coronavirus Aid Relief and Economic Security Act of Congress. CARES was enacted to ward off financial collapse during an on-going health crisis in America.

Offering a regional view is Robby J. Moore, president of the Bank of Lewis County, who describes a "rural renaissance." Employees worked from home during the coronavirus quarantine. Many still telecommute. Similarly, school-age children attended class through a computer.

"If there's one silver lining for rural economic development," Moore said, "it's that the pandemic has proven that people don't have to live in Nashville, Memphis or wherever else. They can have good quality of life and more affordable housing than what they are accustomed to."

The pandemic and its quarantine "proved that you can live in Lobelville, Linden, or Hohenwald and ... all you really need is connectivity," Moore said. More residents mean new customers to make ordinary financial transactions by smart phone.

Also responding positively is Tracie Lomax, manager of CB&S Bank's branch. Lomax learned about PPP Loans with help from the Tennessee Bankers Association (TBA) and SBA staff in Nashville.

Lomax didn't count the number of applications she managed, "but we did a lot," she said, recommending a larger view from CB&S Bank Communications Director Alana Parker in Russelville, Alabama. Parker concurs, reporting there was, from her perspective, "a large demand for the loans. Overall, the program has been super-beneficial for a lot of the small businesses across the U.S."

Parker and the TBA say SBA's PPP program has ended.

"The funds are depleted," Parker said, "so you can't get a PPP loan anymore, but you may have one outstanding, so you may be able to turn around and apply for forgiveness of that loan."

Borrowers face deadlines to get forgiveness. Parker said each loan has its own deadline for requests to convert the loan into a grant, thereby liquidating debt.

There are "hoops to jump through, as far as getting paperwork together and getting them submitted to the SBA, and then getting forgiveness," Parker said.

The Tennessee Bankers Association reports 238,500 PPP loans valued at $13.5 billion were issued to Tennessee businesses because of the CARES Act.

TBA also explained a fact of life in cyberspace. Names, addresses and loan dollar amounts were: available on PPP loan applications; obtained to exploit people; and sold to others who sent letters to trick people into divulging more personal information. Those letters falsely offered another PPP loan, and request account numbers that are sold to identity thieves.

Lomax, a local bank veteran, is aware of the scam. "That's with anything," she said. "When somebody buys property and they record it in the registrar's office; in two or three months they get ... a letter" marketing a real service or phishing for data. "It's not with just one product" attached to deeds or other records, Lomax said. "Nothing surprises me anymore."

Jerry Putman says all kinds of businesses received PPP loans so they could continue to pay workers. Retired from banking, Putman worked at the Bank of Frankewing, First Farmers, and First National Bank of Lawrenceburg.

The Bank of Lewis County "did not normally" issue loans through the Small Business Administration, so Moore decided "to err on the side of caution" and refrain from managing PPP loans. "We just didn't feel that we were set up to" add a new product. He referred customers to other banks. "We were blessed to have some friends ... who did [make PPP loans] to make sure our customers got these much-needed lifelines to keep their business going." He recommended banks outside his market. They were "very willing to do these loans." He declined to name them.