Applications, apologies and all-nighters: How local banks, businesses are navigating the PPP

  • Kevin R. Day, president of Florence Bank, at the bank March 4. GAZETTE FILE PHOTO/KEVIN GUTTING

  • John Howland, Greenfield Bank prsident and CEO, entering in PPP loans into the the U.S. Small Business Administration website on Tuesday, April 28, 2020.  SUBMITTED PHOTO/GREENFIELD SAVINGS BANK

Staff Writer
Published: 5/18/2020 6:20:29 PM

NORTHAMPTON — A crashed online portal, millions in loans going to large companies, and confusion about program rules. These are some of the issues that nationwide have wracked the Paycheck Protection Program (PPP), which offers loans, backed by the U.S. Small Business Administration (SBA), to help businesses with payroll during the pandemic.

Locally, Florence Bank hit a roadblock. The SBA backed 1,661,367 loans in the first round of the program, but none of those loans were through Florence Bank — not for a lack of trying. When the PPP was announced, Kevin R. Day, president and CEO of Florence Bank, knew there would be an influx of applications and worried about meeting the demand.

Anticipating a large volume of loan applications, the bank quickly had to make a decision — and outsourced loan processing to Kabbage, an online financial technology company. Normally, Day said, “when choosing a vendor of any kind, we would do background research. It would take us six months to a year to engage a vendor.” But during the pandemic, “we basically had 48 hours to make a decision on what we would do.”

While the SBA did eventually approve Kabbage to submit PPP loans, Day said it was a slow process. “Then, the first round of money ran out quickly — that was disappointing for everyone involved,” he said. “Certainly, our customers are disappointed. We were disappointed.”

He added, “This one felt a little more frustrating than anyone would have liked. For that, we are totally sorry.”

Kabbage said it had approval in the first round of the PPP and did not respond to questions about when exactly it was approved to submit loans.

The bank is currently still outsourcing to Kabbage and working on its second round of PPP loans. “We’re dealing with somewhere between 500, 600 applications,” Day said. “The vast majority — 82%, I believe — have been put through and have been approved.”

Greenfield Savings Bank decided to process loans in-house and has issued more than 600 loans in the first and second rounds of the program, combined — twice the amount of commercial loans the bank issued in all of 2019 — according to John Howland, president and CEO of the bank.

On the final day before the first round of PPP funds ran out, Howland and several others worked overnight to process loans and enter them into the SBA system. Howland “watched the sunrise,” he said. When SBA funding dried up, they had processed about 300 applications but still had 200 left.

“It was really painful to call people after the first round to say, ‘You didn’t get through,’” Howland said. “It was not a fun process.” They worked on those loan applications when the second round of funding became available, and he estimated that more than 90% of those who applied for PPP funding got approval. Businesses are still able to apply for the second round of PPP funding, he said.

The Paycheck Protection Program isn’t the only way businesses are seeking relief.

Earlier this month, the city of Northampton awarded a total of $125,000 in emergency grant funding to city businesses. The program, funded with federal Community Development Block Grant money from the U.S. Department of Housing and Urban Development, gave grants to 23 Northampton businesses; 80 businesses applied, according to records from the mayor’s office.

“It is only a first step,” Mayor David Narkewicz said about the program in a statement last week. “We are working to secure additional state and federal resources to hopefully expand the program.”

Valley businesses

Carol MacColl, owner of Paradise Copies in Northampton, received a loan through the PPP after applying on the first day possible through Easthampton Savings Bank. “All the time, using your small local bank is the way to go,” she said.

But some questions remain, such as how the loan will affect her business’s taxes.

Her loan ends in the middle of June, but under PPP rules, she must have employees working full time through the end of that month, so she will have to cover payroll for a few weeks while, at the same time, business will likely be slow.

“It’s a little hard to tell whether come June 30 I may have lost money in the deal,” she said.

“I’m cognizant of the fact that people are in worse conditions, and they are like, ‘You got free money’ … but it doesn’t really turn out to be that way,” she added.

Michael Marvin, co-owner of Chameleons Salon on Conz Street, wasn’t as lucky with the program. “We were shut out of the first wave because the money ran out so quickly,” he said.

Gabrielle Gould, executive director of the Amherst Business Improvement District, sees the program as an overall positive. “It’s done more good than it is doing harm, but I know there is a lot of concern from small business owners,” she said.

For instance, the SBA website says, “forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines.”

“Some staff won’t be able to come back,” Gould said, giving the example of those who are immunocompromised or caring for immunocompromised loved ones. “Employers are being asked to put in writing to the government that so-and-so refused to come back to work. Then the government can pull that person’s unemployment. I have a really hard time with that.”

She added, “I have even more concern for people who are going to back to a workplace that’s not taking the guidelines seriously.”

Greta Jochem can be reached at

Daily Hampshire Gazette Office

115 Conz Street
Northampton, MA 01061


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