While Maryland businesses received billions of dollars in loans from the federal government, local bank officials say there is a substantial need for new funding for the Paycheck Protection Program that ran out of funds last week.
President Donald Trump on Sunday said he hopes to have a deal in place with Congress early this week to add more funding to the beleaguered program, which was created as part of the larger $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act.
That deal is expected to include $310 billion in additional funds for the paycheck program.
Howard Bank, in an email from a spokesman, said all “resources remained focused on funding.” Prior to the PPP running out of money around 10 a.m. Friday, the bank managed to have 30 loans approved. That brought its totals since the program’s launch to 797 loans approved worth about $785 million.
“This has been an intensely personal process for us given our exclusive focus on Greater Baltimore small and medium sized businesses; it has required policy amendments but those have been easy to accomplish given our local headquarters. And every decision has been informed by our values not just financial metrics,” Mary Ann Scully, chairman and CEO of Howard Bank, said in a statement.
M&T Bank, the largest SBA lender in the region with a regional headquarters in Baltimore, ranked No. 5 on the SBA’s national list of top PPP lenders through Friday. A spokesman for M&T confirmed its place on a list released by the SBA that includes rankings but not associated bank names.
Roughly 26,000 businesses in Maryland received loans, according to the SBA, for a total of more than $6.5 billion.
Nationally, Buffalo-based M&T Bank approved nearly 28,000 loans in excess of $6.5 billion with an average size of nearly $235,000.
The PPP program was created in order to help small businesses weather the shutdown caused by the COVID-19 pandemic. It initially included a roughly $350 billion pool to allow businesses to borrow 2.5 times their pre-coronavirus outbreak payroll.
These loans were intended to help small businesses cover eight weeks of payroll with up to 20% allowed to pay expenses like rent and utility. If businesses maintained their workforce at pre-coronavirus levels the loans could be fully forgiven.
Nationwide, construction was the industry that received the largest dollar amount in terms of dollars, with more than $44.9 billion. Professional, scientific and technical services firms received the next highest dollar amount, at more than $43.2 billion, followed by the manufacturing sector, which was granted nearly $41 billion.
In terms of number of loans the professional, scientific and technical services sector received more than 208,000 loans, which is the largest number of individual loans for a specific industry. The retail sector was awarded nearly 186,500 in loans, and the health care and social assistance sector received the third-highest number of loans at 183,452.
The program, however, has faced significant challenges in its rollout. Most recently, national burger chain Shake Shack said it will return $10 million dollars it received from the program. Those funds, however, cannot be reloaned, according to the SBA.
Some small businesses accused banks of prioritizing existing customer’s access to public funds. Profiles, a Baltimore-based public relations firm, filed a lawsuit against Bank of America asserting that claim.
Others argued the program was biased against minority-owned businesses that are less likely to have lending relationships with the banks processing the loans. There have been some local efforts to mitigate those issues, such as Goldman Sachs, via Lendistry, providing $10 million in PPP funds for disadvantaged businesses in Baltimore.