So far, 121 Financial Credit Union has funded $7 million of its $30 million allocated for Paycheck Protection Program loans, and it expects to reach its cap sometime next week, CEO David Marovich said April 14.
Marovich said the credit union saw about 400 applications before it had to shut down the portal last week to catch up in processing the applications and disbursing loans.
“Once we get through this first round, we may be able to open it back up,” Marovich said.
Applications for businesses applying to the program opened April 3. Self-employed and independent contractors could apply starting April 10.
Businesses can apply for a PPP loan to reimburse up to eight weeks of payroll costs, if all employees are kept on the payroll.
At first, Marovich said the program from a lending perspective was “a bit of a challenge.” With little guidance from the Small Business Administration for lenders, 121 Financial and other lenders were left wondering exactly what kind of documentation they needed from borrowers.
“It started off a little slow until the SBA got more guidance out, more procedures,” Marovich said.
“They announced the program and they did a great job of informing the borrowers what to expect, but not the lenders as far as what we needed to do in order to fund the loans.”
Now, Marovich said the credit union is able to turn applications around in 24 to 48 hours, but the application portal remains closed until it can work through the application backlog.
Most every business that applied so far has provided the credit union with the proper paperwork and documentation to file the applications. It also is accepting applications from members and nonmembers.
Once 121 Financial reaches its $30 million lending cap, Marovich said he would consider raising it with funds from a possible loan from the U.S. Treasury.
“We’re kind of waiting to see,” he said.