U.S. Air Force file photo

Fresno’s community banks are ready to participate in the second round of the Paycheck Protection Program whenever they get the final “OK” from the U.S. Small Business Administration. On Monday, only community development financial institutions (CDFIs) are allowed to start processing applications. But many businesses can start preparing their applications now.

CDFIs promote serving distressed communities and making sure money is going toward underserved businesses. The only CDFIs in the Central Valley are Access Plus Capital and Valley Small Business Development Corporation in Fresno, but only Access Plus Capital will be participating in PPP2. They did not participate in the first round.

Tate Hill, executive director of Access Plus Capital, said in an email that they are only working with current clients at the moment. Because they did not participate last time, he anticipates what could be a slow rollout this week. He hopes to open applications up to other businesses in the near future. 

CDFIs will be responsible for taking care of first and second-draw loans before lending is open to all community banks. The SBA hasn’t provided a date yet for when all banks can participate, but some bank CEOs such as Lo Nestman at Fresno-based Premier Valley Bank anticipate sometime in the middle of this week. Valley banks participating in PPP2 include Suncrest Bank, Fresno First Bank, Premier Valley Bank, Central Valley Community Bank, Bank of the Sierra and United Security Bank. 

Premier Valley Bank is taking applications as of Jan. 11 to get a head start on the lending process since banks will be granted permission to start lending at a moment’s notice. 

Fresno First Bank anticipates being able to start by the end of the week, but this is subject to SBA guidance. Nestman said that he anticipates a similarly-sized response to PPP2  in terms of loan amounts and number of applicants as there was with the first PPP.

Jim Ford, CEO of Central Valley Community Bank, thinks that this round will be more seamless than last time. Though the demand for more money is there, Ford thinks that the anxiety surrounding the pandemic has subsided.

“The hysteria or the real nervousness and worry that happened back in March doesn’t appear to be happening this time,” he said.

Central Valley Community Bank will not be lending to new clients, but will continue to issue PPP loans to current clients. 

“We think there’s going to be enough demand just from our client base. Rather than opening this up to non-clients, we’ll focus on our clients that need the help,” Ford said. 

CDFIs were authorized to start processing applications today through Wednesday, Jan. 13. 

“They haven’t actually told the rest of us when we can get started. They haven’t even actually shown us the new portal that we’ll be using. So hopefully that’ll be out here pretty soon,” Ford said.

Here are ways you can be proactive as you wait:

Fill out an application form. Businesses applying for PPP2 should check with their banks to see if they are taking applications to place them on hold until they can process them. This will help move the process and borrowing along more smoothly. 

Ask if your desired bank is lending to new clients. If businesses are waiting to receive their first PPP loan (if a business did not apply last spring or summer), they should check to see if banks are taking new clients. 

Define your avenue.  There are three avenues through which businesses can be eligible in this round of PPP:

—They have not received a PPP loan before

—A business did not take their full loan amount that they originally qualified for the first time

—They are taking a second loan after using their PPP1 funds. This avenue has some restrictions.

Taking a PPP loan for the second time will have adjusted rules. Businesses should have no more than 300 employees, and they need to show a reduction of at least 25% in revenue between corresponding quarters from 2019 to 2020. There may be exceptions for businesses that started in 2020.

Be prepared for one more step. This time, there will be a second verification process, in which the SBA will determine that businesses have spent the money from their first loan as required. This could take a bit longer for money to be allocated, but banks also say the process might be more seamless for clients since banks executed the process last year.