(TNS) — Stressful, scary, clunky, complicated, constantly changing and impenetrable.
That’s how six local small business owners described applying to the Paycheck Protection Program — a source of funding that, despite its problems, they all credit with potentially saving their businesses as they struggle during the9 coronavirus pandemic.
The six small business owners featured in this article applied to the PPP through Solvay Bank. Their experiences ran the gamut, from the furniture store approved in the first round of funding to the self-employed skydiving instructor who decided to take his application to another bank.
At Solvay Bank, the oldest local financial institution in Central New York, officials said they were proud of their role in helping connect businesses to the PPP loans, even if there were some kinks to work out along the way. Solvay devoted one-third of the bank’s staff to the program, increasing hours to meet demand.
The bank processed more applications in five days than it would normally in a year, and continues to accept new clients.
Some customers were pleased, feeling comforted by the bank’s attentiveness and attention to detail. Others were so upset with the process, lack of communication and burdensome requirements that they wrote to syracuse.com with their concerns. The rest fell somewhere in between, remaining as customers of the bank but with some frustrations.
In the end, the business owners and the bank are all part of a historic, herculean effort to save small businesses across the U.S. In spite of technological issues, inconsistencies, frayed relationships and threatened reputations, all the business owners were approved for the low-interest, forgivable PPP loans.
Their stories provide a snapshot of what happened with the program nationally, and how it played out at one Central New York bank.
‘Clunky, To Say the Least’
Rachel Henderson Kelly started researching the PPP as soon as there was talk on the news of relief for small businesses.
The PPP, enacted about a month ago as part of the Coronavirus Aid, Relief and Economic Security Act, quickly pumped $350 billion into small businesses’ bank accounts, to help cover things like payroll and utilities. The program has been hugely popular. Initial funding for the loans was depleted in less than two weeks. Businesses competed with each other for their banks’ and credit unions’ attention.
Henderson Kelly got an application into Solvay Bank on behalf of her family’s business, Henderson Wholesale Lamps, during the first round of PPP funding. The loan was to cover payroll expenses for the businesses’ two lone employees, as well as to help with things like rent and utilities. She said it was a given to apply through Solvay Bank, with its main branch just down the street and a great, longtime relationship between the businesses. Henderson Kelly said the bank and lighting distributor are mutual customers.
But as reports circulated that the PPP funding was running out, and it became difficult to get answers from the bank, working with Solvay became frustrating, Henderson Kelly said.
“Clunky to say the least, but it all worked out for us," she said.
Henderson Wholesale Lamps was not approved in the first round. Henderson Kelly said in hindsight, it’s hard to tell whether Solvay Bank could have processed the loan any quicker. She said she waited about a week before submitting the application.
The second time around, things went much smoother.
“They were much more communicative,” she said. "It seemed like they had their ducks in a row. I’m thinking in the first round, they were just so taken off-guard by the amount of applications ... I do feel empathy for them there, but still we were frustrated. We don’t bank anywhere else and feel we got swept to the side a little bit.”
When the U.S. Small Business Administration portals reopened at 10:30 a.m. April 17, Henderson Wholesale Lamps’ application was ready to go. Around 6 p.m. Tuesday, the branch manager at Solvay Bank called to tell the Henderson family their application was approved,
“Kudos to them for doing that," she said. “I know they were working really hard the second time around. They had a lot of people on it. It definitely made us feel better.”
Not far down the road in Solvay, Peter Frey had a similar experience, but wondered: What if there had been no round two?
Frey employs 17 people altogether at Bridge Street Tavern in Solvay and Syracuse Casing Co. He said he submitted applications for the PPP on behalf of both the bar and the sausage casing producer on the program’s first day. He too went with Solvay Bank, where he’s done business for 30 years.
“We did wind up getting it from them in the second round,” Frey said. “But I have nothing good to say about them. They absolutely ignored us in the first round. They came through for us, but not before making us absolutely panic.”
‘An Impenetrable Door’
During the anxiety-filled waiting period, Frey looked to his network of other local business owners to see how things were going for them with the PPP.
He connected with Michael Burgess, the owner of Skydive Central New York in Weedsport. Burgess was at the end of his rope with the application process and Solvay Bank. He’d been in touch with other business owners, including Kevin Valente, of Achilles Heel Training Gym in Camillus. Valente said he was told by Solvay Bank that his business was not eligible for a PPP loan.
Burgess crafted a letter to the newspaper describing their shared concerns. Valente and Frey signed on.
Burgess said he contacted Solvay Bank multiple times with his complaints. He thought the bank was prioritizing certain applications over others, he said, instead of following the first-come, first-served rules of the PPP. He called the bank a dozen times and wrote eight or nine emails, he said.
Solvay Bank President and CEO Paul Mello said the bank took some time before it began processing PPP loans — but that was to ensure the applications were accurate and complete. Mello said in his experience with the Small Business Administration, the federal agency that oversees the PPP typically has strict requirements for paperwork.
During the hasty rollout, guidance was sometimes missing and frequently changed.
Mello said his bank tried to adapt and understand the regulations quickly. That’s a sentiment shared by other bankers locally and across the country. Some waited several days to start accepting applications, or stopped after an initial flood of them.
Whatever the cause for delays, the wait was painful, business owners said.
“We’re watching our businesses crumble,” Burgess said. “We put our blood, sweat and tears into these businesses."
In the second round of funding, Solvay got back in touch with Burgess but asked him for specific documents that would have taken him at least a few days to produce. He was frustrated that Solvay wasn’t more flexible, and couldn’t have given him a heads-up about the documents.
So he withdrew his application.
He applied with a different financial institution, one that did not require those same documents, and his loan was approved within days. After 10 years of banking with Solvay, Burgess said he plans to move his accounts.
Kevin Valente, the Camillus gym owner, also decided to take his business to another financial institution, ACMG Federal Credit Union. His application was approved in the second round.
Valente said he too had tried to apply for the PPP on the first day it was available. He said someone from the bank informed him his business did not qualify. The bank encouraged him to apply for a different federal relief option.
While Valente was disappointed in the bank, he said he saw what happened to his application as similar to what he was reading about banks around the country.
“Solvay was an impenetrable door, so I went with someone else," he said.
‘We Worked Our Hearts Out’
Two other longtime Solvay customers were satisfied with their experiences and complimentary of the bank’s efforts.
Jay Yennock, of China Towne Furniture and Mattress, was among those who got through in first round. He said his application was approved the day before the funding ran out.
While he lamented the complicated, constantly-changing process, he said Solvay Bank was an aid through it.
China Towne typically employs about 40 people, Yennock said. For him, the toughest part of the PPP was understanding the timing, the paperwork, and how he could ensure the business would be able to meet the requirements for loan forgiveness. That’s where he thought Solvay was especially helpful, he said.
He said his business has worked with Solvay for 50 years, considers the bank to be responsive and the people there friendly.
“I give the banks a lot of credit," Yennock said, "with the number of days, hours they put in trying to get all these applications done.”
John Boronczyk, owner of John’s Auto Care located on Milton Avenue, was approved in the second round. His PPP loan will help his business and his 17 employees.
Boronczyk, who has applied for loans through the SBA prior to the coronavirus pandemic, described himself as someone who can get “excitable.” He said the PPP application process was frustrating and the rules changed too much.
He and a friend almost simultaneously submitted applications for the PPP with two separate local banks. Although they applied on the same day, Boronczyk’s friend was approved in round one, and he was not.
That led to at least one “excited” call to Solvay Bank, during which Boronczyk said he spoke with two employees who were patient and helpful.
“I’m worried about my guys, my family, my 90-year-old father who’s living with me," he said. "Anytime I’m asked to do something a second time, it’s like, you’ve got to be kidding me!”
But Solvay Bank employees explained the status of his application and walked him through what they’d do next.
“That made me feel pretty comfortable," he said. "That’s where the small bank really shines.”
Mello, the CEO who has worked at Solvay Bank for 27 years, said the bank was still continuing to take applications from customers, and from businesses that have not banked with Solvay before.
He said he was proud of the bank’s role in the Paycheck Protection Program.
“I think we’ve worked our hearts out," Mello said. "We built the reputation of being a bank for the small business for 100 years. Then in four weeks, we had people just wanting money and not understanding what the SBA was requiring, and our job was to make sure that the borrower doesn’t get into trouble and we don’t get into trouble.”
Ultimately, Solvay Bank processed hundreds of applications and millions of dollars on behalf of local small businesses. Mello estimates the loans processed by Solvay helped to save 7,000 jobs. Of the loans Solvay handled, 80 percent were for businesses with 20 employees or less, a bank spokeswoman said. Just 4 percent were for businesses with more than 50 employees. Bank officials declined to discuss specific customers’ applications or provide further details or numbers for the loans the bank processed.
“We did everything humanly possible to get as many people through," Mello said. “We went as hard and as fast as we could working into the night, until the money ran out. We got everybody through, and we keep at it.”
To the customers with complaints and those the bank lost, Mello said he wasn’t quite sure how to respond.
“All I know is we tried very hard," he said.
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