April 3 was the first day small businesses could apply for new programs under the CARES Act, but last-minute changes meant only a few financial institutions in the Tri-Counties were able to roll out those options on opening day.
Through hard work and preparation, Montecito Bank & Trust was able to accept initial applications when national lenders like Wells Fargo, Bank of America and Chase were still getting ready.
MB&T was already working with an online lender to automate its small business lending when President Donald Trump signed the CARES Act into law on March 27. Having that infrastructure already in the works helped the bank get a jumpstart on preparing to accept applications for the Payroll Protection Program, which was established by the CARES Act.
Under the Paycheck Protection Program, small businesses (as defined by those that have less than 500 employees) can apply. The loans will be forgiven as long as no more than 25 percent of the loan is used for non-payroll expenses, like rent or utilities.
The bank’s original goal was to have the application ready at 12:01 a.m. on April 3, but on April 2, the Small Business Administration made changes to the PPP application.
Janet Garufis, chairman and CEO of MB&T, said her team worked through the night to make sure the bank would be able to offer applications at 8 a.m.
Their clients noticed. By 8:07, the bank had 70 applicants, and by 8:27, it had 120. Before the day was even over, the bank received so many applications that it had to temporarily close its PPP program.
“There’s really a lot of desperation,” Garufis said. “We’re not going to make a lot of money through this, but it’s an important community service.”