In the less than two weeks since the federal government unveiled a nearly $350 billion effort to help small businesses cover up to two months’ worth of payroll costs, banks in Franklin County have already loaned out millions for the program.


But with nearly three-quarters of the money already given out nationwide, the prevailing wisdom is the availability of funds with the Paycheck Protection Program (PPP) will likely dry up pretty soon.


“Most bankers believe the fund will be depleted within a week,” said Donnie Gay, president of Centennial Bank’s North Florida Central Market.


“The program funding will be depleted long before the June 30 application deadline, and as it currently stands, the program will end when the funds are gone,” he said. “Many politicians have stated the need to increase the funding for PPP; however, there has been no real progress to make that happen.”


The CARES Act (Corona Virus Aid, Relief and Economic Security Act), passed by the House of Representatives by voice vote on March 27 and quickly signed into law by President Trump, established the PPP, to provide eligible businesses with eight weeks of cash-flow assistance as a direct incentive to keep their workers on the payroll. The loans are 100 percent federally guaranteed loans from the U.S. Small Business Administration.


Not only are businesses with fewer than 500 employees eligible for the funds, but so are sole proprietors, independent contractors, and self-employed persons, as well as non-profit organizations, including churches.


“The reason they’re doing this is to alleviate unemployment claims,” said Earl Solomon, city president of Apalachicola’s PeoplesSouth Bank. “The unemployment people are overwhelmed; they can’t process the sheer number of people who need help.”


Both bankers say they have been quick out of the starting gate, and galloping at a fast pace, ever since the Small Business Administration issued guidelines for the program on Thursday evening, April 2, just 12 hours before the program was to begin.


“We started processing applications on Saturday, April 4, and since that day, our lending team, both my market and company-wide, has worked every day, even Easter Sunday, sometimes late into the evening to process these requests,” said Gay.


“I started calling a lot of customers. I was trying to keep up with it,” said Solomon. “I’ve contacted clients and let them know that’s available and help them through the process.


“The word’s getting out,” he said. “I’m trying to encourage all my customers to get as much of that money in Franklin County.”


The selling point of these PPP loans, which can be for up to 2.5 times the business’ average monthly payroll costs but no more than $10 million, is that they are entirely forgivable provided the business spends at least three-quarters of the money on payroll costs, and keeps employees on the payroll for eight weeks.


The remainder of the loan money can go towards rent, mortgage interest, or utilities.


The SBA notes that “forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”


If a portion of the loan is is not deemed eligible for forgiveness, the feds will convert the balance into a two-year term loan with a fixed interest rate of 1 percent, with no payments required for the first six months. No collateral or personal guarantees are required, and neither the government nor lenders will charge small businesses any fees.


“My group pushes through because they know that our local businesses, our friends and neighbors, need the PPP funding,” said Gay. “I’m grateful to have a dedicated lending team working with me. I haven’t asked any of them to work late hours or throughout the weekends, but they all have done so.


“These are odd days and we’re traveling through some uncharted waters, but we’re in this boat together and we will make it to the other side together,” he said.


Gay said his five-county market area, which includes Calhoun, Franklin, Gulf, Liberty and Wakulla, had by Tuesday processed around 200 PPP applications, totaling just under $15 million.


“For perspective this is about half the volume processed in all of 2019,” he said.


Solomon said his bank has funded more than two dozen applications, including $500,000 on Tuesday, for a total of about $2 million.


A report issued by the SBA indicated that as of close of business day Monday, the PPP program nationwide had issued about 1.04 million loans, totaling almost $248 billion.


In the state of Florida, more than 52,000 loans had been issued, totaling more than $12.7 billion, making it third, behind Texas, with about $21.8 billion in loans, and California, with about $20.9 billion.


About 70 percent of the loans nationwide were for under $150,000, but combined these amounted to only about 15 percent of the total funds given out. Overall, the average loan size was for about $240,000.


In terms of the percentage of the total loan monies given out, the Accommodation and Food Services industry sector ranked fifth, with about 9 percent.


The biggest chunk went to Construction, with close to 14 percent of the total, followed by Professional, Scientific and Technical Services, and Manufacturing, each sector with a little more than 12 percent, and Health Care and Social Assistance, with a little more than 11 percent of the loan total.