Measuring the impact of PPP loans in Iowa
Jim Plagge notes that in his role as President and CEO of Bank Iowa, he does not directly manage client relationships, but in 2020 he received many direct calls from clients about the announcement of the first. paycheck protection program loan series to offer. during the pandemic. “They were looking for advice,” he recalls. “They asked, ‘What should I do? I wasn’t really touched; I don’t feel good about it.'”
OPPORTUNITY KO: The paycheck protection program may have been a lot of work for the Bank Iowa team, but Jim Plagge, president and CEO, said he also brought in new clients. at the bank. (Courtesy of Iowa Bank)
And while at the start of the pandemic, many weren’t sure how long that would last or what it might mean for businesses, Plagge recalls offering this insight: “Our constant advice was that you don’t know what’s going to happen. happen. We have no idea what impact this is going to have on you. “
Of course, the pandemic has persisted – and even now, with supply chain issues plaguing many businesses, the Iowa lender may have been a little ahead of the value of PPP loans.
Bank Iowa advised a range of business clients not to pass up the loan opportunity due to growing uncertainty, and it was round one. When the second round of PPP loans arrived, the farmers were part of the mix, also expanding the program for the lender. Nationally, skilled farms have raised nearly $ 6 billion in PPP loan funds.
By the end of both rounds, Bank Iowa had processed approximately 3,500 PPP loans for a volume of approximately $ 90 million. And the result? Bank Iowa recently released the numbers and determined that it had protected 11,872 Iowa jobs in the past two years.
The family-owned lender has 26 locations and more than $ 1.7 billion in assets, making the company one of the state’s leading independent agricultural banks.
Although PPP loans have reached almost every segment of the industry, these industries have demonstrated the greatest needs, and it shows the number of jobs saved:
• Construction and real estate (2,313 jobs)
• Health care (2,224 jobs)
• Agriculture (1,866 jobs)
• Restaurant (1,103 jobs)
• Automotive (1,093 jobs)
No easy task
When PPP loans were first offered, some major lenders, including Farm Credit, did not immediately decide to participate. It was a challenge for businesses looking for loans, with many not getting a response from their regular lenders. Many have turned to Bank Iowa.
“Clients of the largest national banks – and, in some cases, Farm Credit – contacted us, or we contacted them once we knew that dynamic was in play,” Plagge said. “We picked up some great deals and in some cases took over the entire banking relationship for customers.”
While the program has attracted new clients, keep in mind that the first days of the program occurred during a pandemic. At the time, half of Bank Iowa’s staff worked from home on shifts, but they rose to the challenge. The loan initiation system had some problems at start-up, but things ended up going easier, but not always.
“It took some of our team to stay up until two or three in the morning to download loans when the Small Business Administration portal wasn’t as clogged up and crashing,” recalls. he.
Yet overall, Plagge was pleased with the ease with which a government quick start program was implemented. “If you had told me this program was going to be able to get as many loans as it did in less time, I would have said you were crazy,” he says. “The SBA did a good job, and the creators went the extra mile. From that point of view, I’d say it’s a raging success.”
The final step in working with clients on the loan remission portion of the program, which is currently being processed through SBA; Plagge says the process is also going smoothly. The local community bank was able to move quickly to help customers and gain new ones at the same time. For Bank Iowa and its customers, PPP loans have become a win-win situation.