121 Financial CEO: ‘Hard to say’ when PPP funds will dry up
The credit union is less than $4 million from its lending cap.
| 4:00 p.m. May 6, 2020
Paycheck Protection Program loan funding became a much smoother process in the second round than the first, said 121 Financial Credit Union CEO David Marovich.
Despite the opening day of lending April 27, when the SBA loan inputting system was overwhelmed, the credit union is funding loans much easier than it did at the outset of the program.
As of May 6, Marovich said 121 Financial funded 428 loans, totaling $26.4 million. Application volume in the second round was slightly lower than the first, with 162 loans funded, while 266 were funded in the first round.
The credit union funded $9.2 million so far in the second round and funded $17.2 million in the first.
Those loans went to fund 1,595 jobs, he said.
121 Financial Credit Union is accepting applications from members and nonmembers. Marovich said it is possible 121 Financial might see applications from those in backlogs at larger institutions.
But there still is capacity for more applications, Marovich said. The institution’s lending cap is set at $30 million.
“(Applications) are still trickling in,” he said. “Every day we’re still getting them. I assume we’ll get them right up till the funding runs out this time.”
121 Financial has a team of about 30 people working to process and fund applications. About 10 are from the company and the rest are through a third-party firm.
Workers are split up, handling parts of the process like funding, answering questions and inputting application information into the system.
Marovich said at the start of the second round, his team was working 9 p.m. to 2 a.m. to process applications and again 6-9 a.m. That is when the SBA inputting system has the least amount of traffic.
After PPP funds ran out in the first round, and before they were replenished in the second, Marovich said his team was prepping loans, underwriting and checking payroll figures so once the program was funded again, applications easily could be inputted.
In the first round, it was not clear what kind of documentation was needed for banks to fund loans.
“Everything was ready to go, all we had to do was begin to enter everything into the SBA system to get the SBA approval,” he said. “The first time, we didn’t have the guidance and all the info from the SBA, so this time that wasn’t an issue.”
It is not too late to apply to the program, Marovich said.
“The last time it went pretty quick,” he said. “There were a lot of people who said this is going to be out within a couple days. At this point, the way it’s looking, it’s hard to say.”