Commercial bankers spent much of the past few weeks working round the clock processing loan applications for the Small Business Administration’s coronavirus relief loans known as the Paycheck Protection Program. And they’re about to do it again as the program designed to protect jobs at companies with 500 or fewer employees is poised to receive another big influx of funding from Congress this week.
On the latest episode of Variety‘s “Strictly Business” podcast, three veteran entertainment industry bankers from City National Bank break down the SBA relief program and its importance to thousands of entertainment industry-related clients.
Listen to this week’s podcast below:
Martha Henderson, executive VP and manager of entertainment banking for CNB, said the PPP loan blizzard that began in late March was unlike anything she’d experienced after nearly 40 years in business.
“It’s the first time we’ve ever come across something like this,” Henderson said. “It was completely new for the clients and completely new for us.”
The PPP was born when the SBA received an allocation of $349 billion from the larger $2.2 trillion coronavirus relief package. That funding ran out after two weeks, but an influx of at least $300 billion is expected before the end of this week.
“Clearly there is a larger need that what was filled the first time,” Henderson said. “We literally received [loan] packages the day it got cut off. We couldn’t process all that we had.”
Henderson and her team were tasked with advising clients on how to navigate a brand-new federal loan program designed to give small businesses easy access to capital to keep them from laying off employees for at least two months. The hastily assembled guidelines from the SBA landed in an 883-page document that they had to read on the fly while all of them were working remotely from their homes.
“The difficulty of all of this was getting those 883 pages that we had to study ourselves and figure it out with the client and go ‘That sounds right,’ ” said Lori Badgett, CNB’s senior VP and team leader who specializes in Nashville and the music industry. “And keep in mind we’re doing while most everyone is working remotely. You can’t walk to the office next door and say ‘Hey is this how you’re doing it?’
Stephanie Dalton, senior VP and team leader specializing in Broadway, notes that the immediate focus on arranging PPP loans comes as clients are wrestling with larger questions of costs and financing needs for whenever they do return to business as usual — whenever that may be.
“What will happen to shows that were in previews or rehearsals [when Broadway shuttered last month],” Dalton said. “There’s a bit of more of a question mark about will those shows have the financial ability to sustain the shutdown and then open when it’s time to open.”
“Strictly Business” is Variety‘s weekly podcast featuring conversations with industry leaders about the business of media and entertainment. A new episode debuts each Wednesday and can be downloaded on iTunes, Spotify, Google Play, Stitcher and SoundCloud.
(Pictured: City National Bank’s Martha Henderson, Lori Badgett and Stephanie Dalton)