Banks in Maine have been flooded with applications for loans under new Small Business Administration programs created to help enterprises survive the devastating effects of the coronavirus pandemic. And local business owners say they are glad for the help.

We talked to several larger banks that operate in the county, as well as to officials at area business organizations and business owners themselves, to get a picture of how things are going with the Paycheck Protection Program, part of the recently passed federal CARES Act, which provides loans to businesses with fewer than 500 employees to cover payroll, benefits, and certain overhead expenses, including rent and utilities.

Loans are calculated based on the business' average payroll expense for the previous 12 months times 2.5, according to information on the Maine Small Business Development Center website, In addition, at least 75% of the loan must be used for payroll and all employees must be retained for the eight weeks following receipt of the loan in order for the full amount of the loan to be forgiven by the SBA.

The program is open until June 30, though some of those we spoke with said they thought the deadline to apply might be extended. As of Tuesday, $1.98 billion in loans had been approved under the program for 12,364 small businesses in Maine, according to the office of Republican U.S. Sen. Susan Collins, one of the authors of the CARES Act.

Bankers work all hours

The phrase "banker's hours" has taken on a new meaning recently, with bank employees working nearly around the clock to help businesses gather the necessary documentation and to process loans under the Paycheck Protection Program. Renee Smith, chief marketing and experience officer for Camden National Bank, said demand has been "extremely high" since the program opened April 3.

She said the bank has not hired new staff to handle the increased volume of applications, but has shifted staff around, allocating more workers to the credit and small-business areas. "We're moving (applicants) through as efficiently as possible," she said.

Jim Donnelly, chief commercial officer for Bangor Savings Bank, said his institution had brought back on a contract basis former employees who had retired, as well as reallocating current staff, to handle the surge in business. He said Bangor Savings has more than twice the usual number of people involved in its SBA lending operation.

Both bank officials said employees are working many more hours than normal, often without being asked. "We've had some amazing employees working through the weekend, working in the evenings," Smith said.

Donnelly said Bangor Savings has employees working from 7 a.m. to 2 a.m. daily in four-hour shifts, and management told all employees they must take Easter Sunday off, the first break some of them had had in two weeks, he said, because previously they had been working on other types of loans.

Donnelly went on to say that the SBA loans, including Paycheck Protection loans, in process between April 3 and April 10, when he spoke to The Journal, "is what we would normally do in five years of SBA lending."

Because the Paycheck Protection loans are open to very small businesses, even including sole proprietors and self-employed workers, some applicants have required a little extra hand-holding, the bankers said. Smith said employees work with customers to gather the required documentation, including payroll records. Donnelly also noted that "We are seeing that there are more questions" from smaller applicants. He himself was on the phone until 10:30 one evening in conversations with a lobsterman and a gym operator.

Donnelly also mentioned that Bangor Savings has received a number of requests to modify existing business loans, and has not been charging its usual fee for those modifications. "It seems wrong to charge a fee when they're hurting," he said.

He was the only one of the bankers we spoke with who was able to provide any numbers with regard to Paycheck Protection loan applications in Waldo County, where he said the bank had received 130 applications in the first week of the program. Overall, he said, Bangor Savings had entered about 1,300 applications valued at $270 million to the SBA system between April 3 and 10, and of those, had closed 320 loans valued at $80 million. Many of the remaining loans will be closed in the next week, he said.

We left a message for Marcia Benner, senior vice president and chief administrative office for Damariscotta Bank and Trust Co., but did not hear from her by press time.

We also spoke with Karen Crane, senior communications manager for KeyBank, who is based in Connecticut. She said by email that "KeyBank is an SBA-preferred lender and we have been accepting PPP applications from eligible clients since this past weekend. KeyBank is continuing to work directly with our clients to help gather documentation and assist them every step of the way — from application to funding. We understand how critical this much needed support is to many of our business clients and are committed to helping them access it. Unfortunately, I don’t have further information to share with regard to volume of applicants in Waldo County, nor throughout the state."

Business try to hang on

Steve Ryan, executive director of the Belfast Area Chamber of Commerce, said the chamber had been encouraging businesses in the county to look into the Paycheck Protection Program, to see whether it fit their needs. He said the program "seems very attractive … seems to be a bridge through this immediate couple of weeks."

He added that while some businesses have experienced delays and other problems, "we all have to be patient" while the kinks get worked out of a program that was set up in a very short time.

"I believe the checks are not in the mail yet," he said, but expressed the belief that they would be arriving soon. He said he knew of some businesses that had applied for loans under the program, but none whose loans had been funded yet.

Over at Our Town Belfast, Executive Director Zach Schmesser said, "It's great the federal government has responded as quickly as it has." He, too said he knew of a number of local businesses that had applied for Paycheck Protection loans. He mentioned that some business owners were concerned about whether, if they were funded later in the spring, they would have the full eight weeks to use the funds, even if that were to go past the program's June 30 end date.

He also said some businesses, even if they receive loans under the program, just don't have enough business right now to keep on, or rehire, all their employees. "We want people to apply and have access to the program," he said, because there is a finite amount of funding, and loans can be prepaid without penalty if the money can't be used. Schmesser added that he had heard Congress was considering extending the June 30 deadline, and he felt any problems with the program would get worked out.

Ryan Otis, owner of Rollie's Bar and Grill in Belfast, said he had applied for a Paycheck Protection loan at Camden National, which he expected to be funded by Monday. "It was actually fairly straightforward and simple," he said.

But even with the money in hand, he said, "we're still hamstrung because we can't open until May at least." He added that, in the interest of protecting his employees, he had decided not to offer curbside or delivery service, and so has been closed since March 18.

The loan is not enough for him to open now; there would not be enough for his 29 employees to do. "We're just kind of in a holding pattern, really," he said. He added that he was on a phone call with other members of Hospitality Maine and Sen. Collins recently, and she encouraged business owners to apply for the loans while the money was available.

He said he is staying in touch with his employees, who are furloughed. "We're not open, so they don't have a job."

Chris Gardner owns Velo Ink, an online business that makes decals for the bicycle industry, and also CG Bikes, a full-service bike shop in Belfast. He applied for a Paycheck Protection loan April 4 and was told Thursday, "it sounds like good news," he said. "I was really happy and grateful to have a contact at Bangor Savings who could help me with that." The loan will cover wages for Velo Ink's two employees, as well as rent and utilities, he said. He is currently running the bike shop by himself.

The Belfast Co-op has also applied for a Paycheck Protection loan, according to General Manager Douglas Johnson, and finalized the paperwork Thursday. "It was a pretty seamless process" at Bangor Savings, he said, adding that the co-op has other debt with the bank, so it seemed to make sense to go there for this new loan. He said the money would be used primarily for wages and benefits, as the co-op is focusing on making sure it retains all of its 81 employees.

While the Co-op had record business March 13 and 14, he said, and business has been steady since, he expects it to drop off, which was one reason the store applied for a Paycheck Protection loan.

"We want to be around when all of this resolves itself, and we want to be sure our workers are cared for through all of this," Johnson said.

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