Aspen-area banks said hundreds of local businesses scrambled to get Paycheck Protection loans
ppp makes it to the valley
Editor’s note: This is the first story in a two-day series on how the rollout of the Payment Protection Program has been implemented in Aspen and the Roaring Fork Valley.
Sunday: How area banks were able to work quickly to attain millions of dollars of loans from the federal government to help local businesses.
Monday: Aspen business that received PPP funds are mapping out ways to use the money under the guidelines while those who didn’t are wondering if they will get in on the latest funds made available or if they’ll survive without them.
The federal government is preparing to launch another round of the Paycheck Protection Program on Monday, an effort that already has helped hundreds of businesses in the Roaring Fork Valley stay afloat, at least temporarily.
Bankers in the Aspen area said they scrambled to help their customers secure loans between April 3 and when the program ran out of money April 13. The key lesson for the second round, they said, is being prepared to apply as soon as the Small Business Administration accepts applications. The program provides eight weeks of funds primarily to keep employees on payroll and from filing for unemployment. The loans will be forgiven if borrowers meet certain criteria.
Timberline Bank processed 650 loan applications in 10 days at its locations in Aspen, Grand Junction and Montrose, according to chairman Mike Taets. He estimated 25% of the loans originated out of Aspen for everything from construction firms to restaurateurs and retail shop owners. That would place the number around 150 from the Aspen area.
Timberline’s customers secured $102 million in loans. That comes out to an average of nearly $157,000 per business.
While the loans are a huge boost, Taets wasn’t ready to call them a lifesaver.
“It’s two-and-a-half months of runway space,” he said, noting that all successful applicants were scheduled to have their funds in hand by Friday.
If economic conditions don’t improve by early June, when the funds run out, many of the small businesses will still be in a tough spot.
“We have no idea what the survival rate’s going to be,” Taets said.
Alpine Banks of Colorado processed about 2,600 loan applications for customers throughout its 40 locations in the state and secured loans totaling about $260 million, according to president and vice chairman Glen Jammaron, who is based in Glenwood Springs. That’s an average of about $100,000 per borrower.
“A lot of our smaller customers benefited from this,” Jammaron said.
No breakdown was immediately available for loans for Roaring Fork Valley businesses.
Jammaron said the bank’s experience helping customers navigate through the Great Recession in 2008-10 helped prepare for this rush for the Payroll Protection Program. It’s a role custom made for community banks, he said.
“These are our neighbors,” he said of the borrowers the bank assisted. “These are people we have a relationship with. We do as well as our community does.”
Aspen Chamber Resort Association President and CEO Debbie Braun said she’s heard a mix of feedback from businesses about the program.
“I know a lawyer, property management company and a real estate agent who received the money quickly and fairly easy and feel relieved that they don’t have to be stressed out about funds in addition to all the other stress during this time,” Braun wrote in an email to The Aspen Times. “These funds are a short-term lifeline to keep small business operating.”
She also heard from a couple of local retailers who were “frustrated” with the process. She wasn’t sure if they received funds. Another business worked with a bank outside the state after an application through a local bank was “held up,” she said.
Jammaron estimated 90% of business owners that Alpine Banks worked with received funds. A handful had to be informed that they didn’t receive loan approval.
“It was mostly because the money ran out,” he said.
Taets said Timberline Banks had worked with the Small Business Administration extensively prior to the PPP process and was designated an SBA preferred lender. That helped the Timberline staff get cranked up April 3 when the program opened.
“We hit the ground running,” he said. “Our people have worked 18 hours per day since April 3. They don’t mind working hard when they know their work is making a difference.”
To put the activity in perspective, the staff of the three Timberline banks processed 650 loans in 10 days. Normally it processes about 300 loans in a year, according to Taets.
He said Timberline, unlike many other banks, didn’t experience any hiccups with the process or have to temporarily suspend accepting and processing applications.
He was critical of some of the largest banks in the country for criticizing the program and contending their banks weren’t able to secure loans for their customers prior to the money running out because of the flaws. Taets claimed the problem was that the biggest banks didn’t have an established relationship with the SBA and weren’t equipped to work individually with customers to get them through the process.
“They weren’t prepared,” he said.
Taets said that in his 41 years in banking, the PPP was probably the most effective and maybe the only effective federal government program for his customers.
“We have no complaints,” he said.
The Colorado Sun reported that 41,635 small businesses in the state secured PPP loans for a total of roughly $7.4 billion, citing data from the Small Business Administration. The SBA oversees the program but relies on local banks to make the loans. The banks receive a fee based on the size of the loans.
The loans will be forgiven if 75% of the borrowed amount goes to meeting payroll and the remaining 25% is used on qualified expenses. Bankers said the exact criteria for forgiveness is yet to be spelled out by the federal government.
Congress approved another aid package last week, which will include additional funds for the Paycheck Protection Program. The first round didn’t come close to covering all the needs of small businesses in the Roaring Fork Valley or Colorado. The SBA estimated there were 611,000 small businesses in the state in 2018, the Colorado Sun reported.
David Portman, FirstBank market president for the Roaring Fork Valley, said he felt the first round of the process worked well for its customers. The bank, which is primarily located in Colorado, took an all-hands-on deck approach and had 3,200 applications ready to submit when the process opened. Word generally was received on the acceptance within 24 to 48 hours, which provided stress relief for business owners.
“Knowing it was set aside allowed business owners to plan accordingly,” he said.
FirstBank helped customers secure more than $890 million in loans as of Thursday, he said. (The parent company of The Aspen Times was among those customers.) The average loan amount was roughly $115,000 compared with a national average of $246,000, Portman said. That demonstrates on how it truly benefited small businesses, he said.
Portman stressed that FirstBank followed a first-in, first-out policy of helping customers. Assistance wasn’t based on the size of the business or the loan.
The bank received more than 15,000 applications for an estimated $2 billion in loans within the first 72 hours after accepting applications April 6. The volume forced it to place a “temporary pause” on processing applications to upgrade its portal. It reopened its process April 13.
Portman said he could not speak for business owners on the importance of the loans, but the staffs of the banks in Aspen, Glenwood Springs and Carbondale have received a lot of expressions of thanks for helping guide them through the process.
“The general spirit is (the program) got their people working,” he said.
Site work for three unbuilt residential chalets being advertised for $25 million each has started in the West End neighborhood as part of a Boston company’s project that also calls for the redevelopment of the Hotel Aspen into a luxury boutique lodge.