GAB offers Paycheck Protection Program and emergency relief information

As a certified Small Business Administration (SBA) lender, German American Bank is sharing additional information from the Indiana Bankers Association about the Paycheck Protection Program (PPP), which is designed to provide emergency relief for small businesses and nonprofits affected by the COVID-19 situation.

“The PPP program officially launches today and we are in close contact with the federal agencies and regulators to understand the latest guidance provided late yesterday,” stated Clay Ewing, president of German American Bank. “Our business bankers are proactively working with our customers to support them through the process, while encouraging businesses to remain patient as German American Bank, along with other banks offering the PPP program, receive and understand all of the necessary information to get applications processed.”

German American Bank also encourages business and individuals seeking assistance to connect with their banker to discuss options available to help them through this time of disruption.

“While it’s not yet possible to fully understand the effects of this unique situation, we remain confident in our ability to work through this together with our valued customers,” added Mark Schroeder, Chairman and CEO of German American Bank.

The Paycheck Protection Program (PPP) will offer some relief to small businesses in Indiana as it launches on Friday, April 3. Indiana bankers ask for patience from the public as the program begins. Application volume will be very high as the financial institutions qualified to offer these loans will strive to keep up with demand.

“Sheer volume won’t be the only reason the program will take time,” said Indiana Bankers Association president and CEO Amber Van Til. “Financial institutions are in the process of reviewing guidance released late Thursday evening from federal agencies and regulators as they prepare to counsel their customers on the Paycheck Protection Program. Even with the latest guidance, the emergency program remains unclear with less than 12 hours before the program is scheduled to begin. The lender agreement and lender application for guarantee forms have not yet been released resulting in an inability for banks to process applications. Banks are here to help. Once the appropriate SBA government forms and processes become available, your Indiana banks stand ready to serve their customers and communities.”

According to the Indiana Banker’s Association, Indiana’s banks entered this pandemic from a position of strength and are well-equipped to help their communities.

The IBA also recommends the following five things businesses can do right now:

1. Talk to your lender, if you haven’t already. If you are experiencing or expect to experience cash flow problems, contacting your lender is the critical first step.
2. Plan for the next 3-6 months, if you haven’t already. Many businesses we’ve heard from have sufficient funds or access to capital for the first 2-3 months. We don’t know how long the pandemic will last, however, so look ahead, both in terms of a potential lengthening of the pandemic and also in how you will handle recovery and re-opening of the business if you are currently closed.
3. Be ready to produce required information quickly to help your lender with your application. All loan programs still require some information in order for the lender to underwrite the loan, including the ones created through the CARES Act. Be ready to produce required documentation quickly to help your lender with your application.
4. Don’t panic and draw on lines of credit unnecessarily. There is plenty of liquidity in the system (unlike during the financial crisis in 2008), so don’t panic and draw on lines of credit unnecessarily. Just like we are encouraging consumers to keep excess cash in insured financial institutions, keep the lines of credit intact until you absolutely need to access them. There may be costs associated with accessing those funds, and if you don’t need to incur the added expense, don’t.
5. Have patience. The banking industry wants to help you through these unprecedented times, but not all programs are in place yet, and even when they are, technology can cause hiccups or delays (e.g. systems crashing).

For more information, please visit sba.gov.