Reach out to small businesses!
CBA actively encourages banks to reach out to small businesses to urge them to consider applying for a PPP loan if they haven’t already.
The reason is that surprisingly there is $100B left in the PPP fund as of this afternoon and it has slowed to a draw rate of only $2B per day. Many small businesses have been discouraged. You and we know you don't want to urge a loan – that is the small business’s decision – but urging them to consider it is very appropriate.
Please contact individual small businesses, local business and community groups, churches… and, in particular, women and minority owned businesses directly or indirectly. This should be a favorable CRA factor, and may pay political dividends if negative attitudes about banks develop as discussed in the last paragraph. You also may want to share this information with local, state and federal public officials who can further distribute it and will be appreciative that banks are reaching out.
We also encourage you to convey this by social media that the bank and its personnel use. You can post it and in fact you may locate prospective customers by mining such information. We understand you may use your own hashtag, but as of this afternoon we are now encouraging banks and their customers to report PPP successes and feel-good stories using and following the hashtag #Bankers4Good which is being used by state bankers associations and banks nationwide. That will allow us to see these good stories throughout the country.
In the meantime, we have encouraged our Colorado Members of Congress to seek changes in the PPP forgiveness factors, specifically 75/25, 8-week and June 30 restrictions. We will provide further information next week. We are concerned that these factors will result in small amounts of forgiveness for some small businesses which results in more debt to pay off in the two-year period.
We are aware that these circumstances could result in intense small business frustration and anger. That may be vented at banks. Although they agreed to the PPP loan terms we think that in their rush to get the “free money” or simply to get needed cash a number of them did not truly understand terms – specifically the forgiveness factors – and that reality will not match their current perceptions of what will be forgiven and what will be remaining debt. Public officials and media portrayed the program early as “too good to be true.”
Please reach out to small businesses directly or indirectly.