The Paycheck Protection Program, Two Years Later
The Small Business Administration’s (SBA) Paycheck Protection Program (PPP) was established by the CARES Act as a response to business disruption caused by the COVID-19 pandemic. The program provided 100% federally guaranteed loans to small businesses, agricultural producers, Tribal businesses, Veterans organizations, and nonprofit organizations to fund employee wages, owner compensation, and eligible non-payroll costs.
PPP loans were originated in two rounds. The first round began in April of 2020 and continued through October of 2020. The second round of PPP originations began in January of 2021 and continued through June of 2021. Stockman Bank made 3,451 loans in round one (PPP1) and 3,809 in round two (PPP2). The loans provided $447 million in relief to Montana small businesses during the COVID-19 pandemic.
The PPP program provided loan forgiveness to borrowers who met several requirements tied to documentation of payroll and use of funds. We submitted 7,260 forgiveness applications with the last forgiveness application approved by the SBA in October 2022.
Stockman Bank’s PPP loans were made to existing customers and other businesses within the communities served by our branches. All of the 7,260 PPP loans were repaid through loan forgiveness or by the borrowers, except for two loans paid by the SBA guarantee. A common criticism of the PPP was the prevalence of borrower fraud. To date, we do not have any applications being reviewed for fraud.
The overall success we experienced comes from dedicated employees who worked around the clock securing approved loans to help our small businesses keep their workers on the payroll. In fact, on April 3, 2020, the first day of the first round of PPP loans, we made more PPP loans than any other lender in the country. We knew these funds would be limited and our customers would benefit, so our bankers across the state worked through the night to ensure hard-working Montanans would be taken care of during this challenging time. Our people are what set us apart from other banks.
The outcome and the role we played with the PPP program across the state gives a great sense of pride to all who were involved. Moving Montana forward has taken on new meaning as we navigated an ever changing environment to keep the economy moving forward while protecting the health and safety of our employees and our fellow Montanans.