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A Lifeline to Small Businesses

The Paycheck Protection Program

A Lifeline to Small Businesses

Streets have been quiet. Booths and tables in restaurants are empty. Events are canceled. Doors are shut and businesses closed. COVID-19 has painted a bleak picture for small businesses and non-profits across the country.

But when lawmakers passed the Coronavirus Aid Relief and Economic Stimulus (CARES) Act, help was on the way, and community banks were the ones delivering it.

“We’ve been a proud financial partner of small businesses in the Sioux Falls area for many years, and that partnership isn’t stopping now.”

– Jeremy Keckler, Business Banking Manager

As part of the spending bill, Congress initially appropriated $349 billion in funding for the Paycheck Protection Program (PPP). This program allowed banks and credit unions to make loans to small businesses that were 100% guaranteed by the U.S. Treasury, reducing the amount of risk typically associated with small business lending. An additional $310 billion was passed last Thursday, signaling the dire circumstances that small businesses are facing.

“We’ve been a proud financial partner of small businesses in the Sioux Falls area for many years, and that partnership isn’t stopping now,” FNB Business Banking Manager Jeremy Keckler said. “Small businesses give back to our communities by creating jobs, donating time and money to non-profit organizations, and so many other things. That’s why it’s critical now more than ever that we support them.”

The Paycheck Protection Program was totally new to banking institutions across the country. Banks had to form new application processes all while guidance from the SBA and Treasury changed almost daily leading up to the program’s launch.

As of May 19, FNB has processed 832 loans totaling more than $100 million. In addition, the program has helped keep more than 10,000 people on payroll for participating businesses. FNB’s business banking team enlisted staff from other areas of the Bank to help process the massive loan volume.

“People were here until after midnight and on weekends processing these loans,” Keckler said. “We knew that this was going to be a make or break for our small businesses, so we did whatever it took to get the loans made.”

Nothing like this had ever been done in the history of FNB. While larger banks began turning customers away, community banks like FNB continued to help small businesses in the fight against COVID-19. Community banking leaders have said their banks are best poised to deliver these loans, because of the relational nature in which they operate.

Jeremy Brown speaks to a seminar“The heart of independent community banking is based on customer relationships, many of those relationships spanning multiple generations,” Megan Olson, President and CEO of Independent Community Bankers of South Dakota (ICBSD), said. “Your banker might also be your neighbor, a fellow volunteer, or a member of your church. Because of this intimate understanding and level of involvement, no one understands their customers’ needs better than an independent community banker.”

That difference is part of the reason Jeremy Brown, founder and owner of Throne Publishing Group, trusted The First National Bank in Sioux Falls with his business banking.

“We have two divisions to our business: one is book publishing, and the second is online courses and certifications we offer to writers and storytellers,” Brown said. “We had our biggest online launch scheduled for mid-March. This is a launch we’ve been working toward for over six months. When we had to cancel the launch, it definitely impacted our business. The loan really helped our business overall because it eased the burden in our operation for the next two months.”

With their biggest course launch canceled by COVID-19, a PPP loan was vital to their business.

“When we applied, I got a call from our banker, Nick Bentele, at 9:30 at night; he was working on our loan,” Brown said. “I couldn’t believe it.”

“As an entrepreneur, you have more skin in the game than anyone else, but I felt like my banker, our bank, and our CPA firm care about our business as much as we do,” Brown said. “That’s an even bigger deal than the loan. It changes the game for us.”

FNB President and CEO Chris Ekstrum offered a message of assurance to customers, sharing FNB’s new commercial depicting their values of Independence and Innovation. The commercial is narrated by board chairman and recently retired CEO Bill Baker. He credits the company’s FIRST Values as the guiding force that has helped FNB make it through The Great Depression, two world wars, and the farm crisis of the 1980s.

“Through our values of Independence and Innovation, we’ve navigated uncertain times since 1885,” Ekstrum wrote. “And that’s exactly what we’ll continue to do.”

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