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Log jam starting to clear for federal relief for Utah businesses – Deseret News


SALT LAKE CITY — While 1 in 10 U.S, workers lost their jobs in the past three weeks to a near economic shutdown amid the COVID-19 pandemic, and thousands of businesses have reported being on the brink of permanent closure, some big moves by the Federal Reserve announced Thursday could break a nearly weeklong logjam in getting help to business owners.

And numbers that were revealed this week reflect how much money has so far been allocated to Utah businesses in distress through the stimulus-backed Paycheck Protection Program, but it appears federal authorities have ordered a lockdown on release of information reflecting state-level performance.

Local representatives of the U.S. Small Business Administration told the Deseret News they were directed by their administrator not to share state-level data on a stimulus program designed to funnel aid to small businesses. On Wednesday, Utah Republican Sen. Mitt Romney broke through that impasse and shared data in a Twitter post that noted as of Tuesday evening, about 3,500 Utah businesses had been approved for funding totalling over $700 million, but it appears that data may no longer be available to congressional members, or anyone else.

The SBA was reporting that, as of Thursday morning, the agency had approved $130 billion in loans for 500,000 applicants with funding provided by 4,000 lenders.

Local business leaders said it’s impossible to assess if Utah-based businesses are seeing a proportional share of funding amid an ongoing tidal wave of interest in the first-come, first-served program combined with an opaque process that is concealing state data.

Several also noted that an announcement by the Federal Reserve Thursday promising to buy up Paycheck Protection loans made by local lenders establishes some clarity for lending institutions and clears space on their collective balance sheets. Under the first iteration of rules for Paycheck Protection Program lenders, banks were being asked to hold those loans for as long as 12 weeks before being made whole.

Utah Bankers Association President Howard Headlee said the announcement should help banks move forward with better surety and without having to worry about maxing out their individual capital constraints.

“The Federal Reserve has come out and fixed a problem that the U.S. Treasury Department created seven days ago and finally got us back to where we thought we were a week ago,” Headlee said, referencing last-minute changes made by federal agencies before the Paycheck Protection program went live last Friday. “What the Fed just did is say to banks, ‘We’re going to give you the money to do this work and you don’t have to use our own cash.’”

Headlee said the move should increase the number of transactions that banks participating in the Paycheck Protection Program can make and also noted that Utah banks were getting up to speed this week after a slow start that had to do with both late changes to the program and working out how to navigate an unprecedented volume of interest from business owners that need help weathering the COVID-19 economic impacts.

Headlee also noted his organization’s frustration with lack of state-level information sharing from the SBA and noted lending institutions were still in need of more detailed guidance from federal entities, particularly as new opportunities for self-employed applicants and independent contractors under the Paycheck Protection effort were set to begin on Friday.

While over one-third of the $350 billion in funding for the Paycheck Protection Program, via the $2 trillion federal COVID-19 stimulus package, has been allocated, it appears many more Utah companies are securing a place in line to receive the emergency financing.

Salt Lake-based Zions Bank was one of the local institutions that had a slow start in gearing up to participate in the federal stimulus loan program, but a spokeswoman reported Thursday that the bank was actively processing Paycheck Protection loans and had some 25,000 applications in process totaling about $4 billion in emergency funding requests. Of those, about 10,000 were from Utah-based businesses. Zions said it has about 1,000 bankers working on the loans and while it had received SBA approval on just several hundred of the loans in the past two days, its newly developed automated processing should be “ramping up very substantially over the next few days.”

Automation and a tech-focused approach is also helping some Utah-based financial technology companies in connecting distressed businesses with the federal funding.

On Thursday, marketplace business loan experts Lendio reported it had received about 100,000 applications for the Paycheck loans so far with about a quarter of those having been approved for funding or are in the approval process. A Lendio spokeswoman also noted that volume capacities are increasing every day and the logjam that existed earlier this week with SBA processing loans was clearing. Lendio is working with about 300 lending institutions that are participating in the Paycheck Protection Program with about 10 new lenders being added each day.

Expense management innovators Divvy also jumped into the mix on mediating the federal loans earlier this week and reported, as of Thursday afternoon, it had some $2 billion in loan applications in process with about half of those sourcing from Utah-based businesses. Divvy says its seeing about 5,000 new applications coming in each day right now.

Utah serial entrepreneur and current Traeger Grills CEO Jeremy Andrus is heading up an economic task force team for Utah tech sector advocacy group Silicon Slopes and has been working to provide useful guidance to Utah businesses seeking help through Paycheck Protection funding. There is also an effort underway, Andrus said, to build an online dashboard aiming to track what federal funding is coming to Utah, which banks are originating those loans and what types of businesses are getting funded.

Andrus said his group has just begun reaching out to Utah lending institutions as well as financial technology companies mediating federal loan applications to share data for the dashboard project but also expressed concerns about the opaque stance federal agencies were taking on sharing program information, particularly at the state level.

“In a program that’s been built for speed and doesn’t have great oversight, transparency becomes so much more important,” Andrus said. “Are these taxpayer funds ending up in Utah in the proportion they should be? Who is supporting this program and at what level?And which local lenders are taking the time to originate these loans and get real throughout on behalf of their clients? These are all questions that will remain unanswered until we see the data.”

The state’s Economic Response Task Force is also continuing its work to connect Utah businesses with various state and federal emergency funding opportunities, including the Paycheck Protection loans.

Task force chairman and Salt Lake Chamber President/CEO Derek Miller said he was encouraged to see Utah businesses being connected with federal funds and remained focused on helping as many Utah business owners as possible get the help they need.

“While many lenders are still coming online and the SBA is still working through the guarantee process, the economic task force is encouraged by the speed with which these first 3,500 loans have been made,” Miller said. “Our highest priority right now is making sure all qualified businesses are availing themselves of this opportunity.

“The process is new and fluid, and while we are watching it carefully and will respond accordingly, we want to be careful to draw conclusions too early. In the meantime, the task force is grateful for many who are working around the clock on both the small business side and lending aide.

“This is happening at a breakneck pace and is unprecedented. We are literally building the bridge while we’re walking on it.”

Business owners can find more information and guidance on how to connect with emergency funding through the state’s website, coronavirus.utah.gov, as well as via the Silicon Slopes’ Slopes Serves site, slopesserves.com.



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