Beyond PPP

Banks have been quick to respond with customer-driven programs that may be forsaking short-term revenue gain, preserving the longer-term relationships that will be valuable once the recovery begins

While the Small Business Administration is forgoing traditional loan structures with banks to fund direct-payment loans of up to $2 million, the banks themselves will join credit unions and even non-bank entities like AltCap to administer the Paycheck Protection Program that was part of congressional relief efforts enacted last week

With a variety of structures, banks are also addressing the potentially larger issue of individuals strapped by salary reductions, work furloughs or outright  job losses with personal loan and mortgage payment deferment or modifications on an individual, customized basis

The efforts for business owners, though, go well beyond capital infusion.  Commerce Bank, for instance, says existing business loan customers may be eligible for payment deferments, and those with business credit cards may also be considered for deferred payments and waiver of late fees. The bank’s resource center says overdraft fees may be refunded for business clients, and merchant services customers that closed temporarily may have their monthly minimum fee and regular monthly fee waived for the months they were not processing

UMB Bank is offering flexible credit card repayment and payment deferral options, as well as a balance transfer opportunity, with additional credit lines possible and a six-month term loan payment deferral option for current small business customers. The bank will also offer counseling services to help clients navigate the SBA Disaster Assistance Program and other state and local programs, and will implement a 90-day moratorium on new foreclosure activity on all mortgages and home equity lines and loans

BOK Financial, as well, is suspending late fees for business clients with loan payments due in April, as well as for mortgage and consumer-loan clients. And Enterprise Bank, which like the other is participating in the federal emergency-loan PPP for businesses, has also rolled out loan-deferral and payment-skipping options on the consumer side.

It’s been an quick-turn for banks, but not a surprising one for Enterprise market president Jeff Carson, who says banks in this region “are generally an entrepreneurial and resilient bunch.”  

“No one truly knows the extent of this health-turned-economic crisis — nor do we know how deep the resulting wounds will be,” Carson  said. “Based on what I know today, I have to surmise we’re only dealing with the tip of the iceberg. Regardless of how deep or long the health and economic woes continue, we’ll continue to pivot — as will, many capital providers in KC.”