Creating a Support System – Smiley Pete Publishing
As the economy appears to be recovering, some businesses and families are still struggling and the banks are trying to help them. Central Bank President and CEO Luther Deaton announced in April that he would partner with Brighton Center, a northern Kentucky nonprofit, to offer the Central Credit Connection Loan, a micro-loan for families and individuals in difficulty during the pandemic.
The Connection Loan offers eligible families and individuals earning less than $ 64,079 per year the opportunity to borrow between $ 500 and $ 3,500. Loans can be used for just about any purpose and are open to bank customers and non-customers. Borrowers who are enrolled in Brighton Center’s Credit Smart program, a financial education program, will receive a lower interest rate.
In return, the Brighton Center will refer clients who come to them with financial problems to the Central Bank for the loan.
“We looked at their requirements for their Credit Smart program and our requirements for our existing small dollar loan and sort of meshed and married the two to come up with a program that would meet their needs and that was acceptable from a risk risk perspective. credit, ”said Chris McGaughey, community development manager at the Central Bank. “In doing so, we have essentially revamped our existing low-value loan program that we offer in all of our branches.”
Lasting 12 to 36 months, depending on applicants’ ability to pay, loans are designed to help low- to middle-income people build or restore credit, or meet short-term cash flow needs. term, McGaughey said. By revamping the program, the bank increased the credit limitation and removed what it saw as some of the credit barriers on the previous loan program to make it more accessible to those who may not have traditional credit. , she said.
Diana Webster, retail development manager for the Central Bank of Northern Kentucky, said that while the program is relatively new, there were people working in the Brighton Center waiting for the program to start.
At Republic Bank, individuals and families can get help through the bank’s website.
“On the consumer side of this discussion, we participated in virtual events focused on individuals, family money management and debt management,” said Todd Ziegler, President of Central Republic Market. of Kentucky. “Republic’s online banking platform provides debt and budget management tools that help individuals and families plan their finances more effectively.”
For Republic, helping small businesses and entrepreneurs is critical during the pandemic. In response to the pandemic, the bank created a business support fund.
“In response to the challenges of 2020 and issues of economic equality, Republic Bank has established a community loan fund for businesses seeking loans of up to $ 50,000,” Ziegler said. “The purpose of the Community Loan Fund is to support small businesses and promote business development and job creation in communities affected by inequality and insufficient access to capital.”
In order to facilitate the loan application, the loan application is only one page long and a dedicated processing team helps businesses obtain the loan.
Republic has also helped hundreds of businesses apply for Paycheck Protection Program loans, he said, which has helped more than $ 750 million to affect businesses in the region and maintain 39,488 jobs in Kentucky in 2020.
“Republic Bank understands the importance of serving the community, as evidenced by our long history of working with the Small Business Administration. [SBA] to meet the needs of our small business clients, which has earned us the designation of “preferred lender” from the government agency. Given this relationship, from the onset of the pandemic and the mandatory shutdowns, Republic was in a unique position to ensure a rapid rollout of the paycheck protection program. [PPP],” he said.
“PPP loans were, and continue to be, a necessary lifeline for small businesses across the country… Decade-old businesses and start-ups have been affected, which means many businesses are benefiting from the assistance provided by these programs, and the response has been overwhelmingly positive… In fact, we have fortunately served over 800 businesses that were not originally our clients by securing a PPP loan. “
At the Central Bank, Greg Shewmaker, executive vice president of retail services, said the bank had issued nearly 4,000 PPP loans totaling more than $ 590 million. He estimates it will total over $ 600 million by the end of the program.
In March, President Joe Biden’s US bailout increased and expanded eligibility for government assistance programs such as PPP, Economic Disaster Lending (EIDL), and the Closed Site Operator Grant program. . In addition, the stimulus package established the Restaurant Revitalization Fund to help restaurants during the economic crisis.
“It was supposed to expire on March 31, and it was extended until May 31, and we’re taking requests every day,” Shewmaker said.
“More than 3.7 million businesses, employing more than 20 million people, have found financial assistance through SBA economic disaster loans. EIDL provides low interest emergency working capital to help save their businesses. ” —SBA Administrator Isabella Casillas Guzman
In early April, the Small Business Administration increased the maximum amount that small businesses and nonprofits could borrow under the EIDL program. The new limit for COVID-19 EIDL loans is $ 150,000 for six months of economic harm and up to $ 500,000 for 24 months of economic harm.
“More than 3.7 million businesses, employing more than 20 million people, have found financial assistance through SBA economic disaster loans. EIDL is providing emergency working capital at low interest rates to help save their businesses, ”said Isabella Casillas Guzman, administrator of the SBA. “However, the pandemic has lasted longer than expected and they need bigger loans. Many have called on the SBA to remove the $ 150,000 cap. We’re here to help our small businesses. That’s why I’ve decided to more than triple the amount of funding they can access. “
In March, the SBA announced it would extend deferment periods for all disaster loans, including COVID-19 EIDLs, until 2022 to give businesses more time to rebuild. To do this, the SBA has postponed the first payment deadline for catastrophe loans granted in 2020 to 24 months from the date of the note and to 18 months from the date of the note for all loans granted in 2021.