Recall back in the 2008 financial crisis that a group of huge banks were designated as “too big to fail” such that they warranted a government bailout for the impact of their past risky and aggressive lending practices? We were told that these banks had to be saved to mitigate the impact on the overall economy; they were simply too big to fail.
Fast forward 12 years to the current virus-induced economic crisis… The Federal government rapidly stepped up to assist small businesses with the SBA Payroll Protection Program (PPP) Loans. The program was to be administered via existing SBA lenders who presumably had the infrastructure and relationships in place for rapid implementation.
Due to the nature of BostonCIO/BostonCOMPLY we have a sizable number of close, small business contacts among clients, partners, and personal relationships many of which are decades old. Within this circle of relationships some interesting, non-scientific findings have emerged. People working with local and community banks had their PPP loans efficiently and effectively processed. I am speaking specifically about Rockland Trust, Eastern Bank, Boston Private and Middlesex Savings Bank. Personally, I worked with the attentive and professional staff at Rockland on behalf of BostonCIO. While we all struggled to understand the changing rules of the program early on, we got through it quickly and as painlessly as possible. One Saturday afternoon in early April while working around the yard I received a phone call. It was the senior loan officer at Rockland calling to walk me through the loan documentation sign off process; now that is service! We were funded 4 days later. Bottom line, within our circle, 6 of 6 loans with local banks were processed and funded.
On the other hand, within our personal and professional circles we have data points concerning at least half of the largest banks in the country and one of the top national SBA lenders. Universally these experiences have been frustrating, time consuming and overall terrible. As of the date of this post, 100% of the loan applications from early to mid-April have been unsuccessful, no accepted applications, no funding, no clear status.
BostonCIO/BostonCOMPLY has been successful over the years to the point that every few months we are cold called by or referred to one of the big banks. When this whole virus situation unfolded, I questioned if I had made a mistake in not moving from Rockland Trust to one of the majors. I am so happy I never made the move to one of the TOO BIG TO FAIL and obviously TOO BIG TO SUCCEED banks.
We would really like to understand what other small business owners experienced going through the PPP loan process with big and small banks and other SBA lenders?