Congress is expected to pass a bill appropriating additional money for the Payroll Protection Program on Thursday afternoon. It means there will be more funding for small businesses. And more work for banks, who will hurry to process the applications.
Tom Comiskey, a regional president for M&T Bank who oversees the New Jersey market, says bring it on.
Comiskey said he was proud of the way his team mobilizing during the first round of funding, with more than 2,000 employees working on applications. And, while Comiskey said the bank was able to secure funding for nearly all of the completed applications it was able to move through to the U.S. Small Business Association, he said his biggest regret was the customers he was not able to process.
“We’re very fortunate that we were able to process 96% of our qualified applications through to approval,” he told ROI-NJ. “But, at the end of the day, we still have a ton of work to do, because there are still businesses out there that need help.
“Right now, we’re just focusing everything we can on keeping the teams mobilized, so that, if the federal government approves a second round of funding, we’re prepared to help those companies through.”
Comiskey talked with ROI-NJ earlier this week. His comments were condensed for clarity:
ROI-NJ: You had a flood of applications for PPP — how did you handle it?
Tom Comiskey: It was a Herculean effort. I’m really proud of our team here for being able to get the process going and the system up and running — and then to be able to mobilize. We went from an SBA team of about 25 people to an extended SBA team of about 2,000 people, literally overnight.
ROI: Many people who filed had their applications kicked back, as banks needed more information. How did that work at M&T?
TC: That goes back to the teams and their willingness to work with our clients. We had a huge number of clients that we were able to work with to make sure that the application was completed properly and then put through for approval.
ROI: Working with clients brings up another criticism of the program. Some have said banks were able to play favorites — and that they all picked the biggest companies, while true small businesses were left out. Can you address that?
TC: I wouldn’t agree with that. The banks were a conduit for the SBA program. This program is really between the SBA and our clients. We had 2,000 people across the bank’s footprint who were processing these applications and working with our clients to make sure they were completed as best as they could be completed, based on the guidance from the SBA.
If you look at our stats, our average loan size was $234,000. And 63% of our loan applications were for less than a $100,000. Going back to what I said about being a conduit, it really wasn’t up to the banks to interpret. If a customer applied and they were deemed eligible based on the SBA guidance, it was our responsibility to put it through without any interpretation or any judgment. So, as they came in, we put them through if they were eligible.
ROI: Virtually all banks decided to only handle applications from their existing clients. Why was that?
TC: We made a decision, as I think many of the banks did, to only process M&T Bank clients. Think about the volume of loans. On an average year, we process approximately 1,700 SBA loans. We ended up processing over 27,000. So, we were able to see ahead of time what the volume was going to look like.
Because of that volume and because speed was very important in processing these applications, we — and many other banks in the industry — knew it was in the best interest of clients to work with their existing bank. That relationship was critical, given the nature of the program.
ROI: Banking is as relationship-driven as any industry out there. Let’s talk about some fallout. There is talk that businesses that did not get PPP are going to blame their banks — and their other service providers — and go shopping for a new relationship. Is this something you are concerned about?
TC: The best way I can answer that is to say that the companies always have a choice with respect to who they choose as their bank, as their accounting firm, as their attorney, etc. I feel as though we just are focusing so hard today on our existing clients to help as many as we can as quickly as possible, that we just have to have faith that if we do the right thing and we work hard for our clients, that when the smoke clears on this, we’ll continue to have those clients and they’ll continue to trust us.
We’ve always said it’s important to have a strong relationship with our clients in good times and it’s even more important to have a strong relationship with them when times are tough. That mutual trust is really important. I’m empathizing with all of these customers. They’re going through challenges they’ve never seen before. So, it’s really important for us to be there.
ROI: Serving customers figures to be different in the future. Like every other industry, banking is going to have adjust to a post-pandemic world, likely with changes in the physical relationships you have with customers. Talk about changes that could be coming?
TC: Banking already was changing rapidly on the technological front. I only see that continuing. People have become more comfortable interacting with their bank online. And I think you will likely see more people, who may not have been as comfortable before, feeling as though now is the time to embrace that technological shift.
But, as an industry, we’ve definitely all had to respond to make sure people stay safe. So, obviously, there’s a reliance on drive-thrus and more complex ATMs, which have more functionality. But I can see more glass windows inside branches, the need to schedule appointments, a lot of things.
It’s very possible that a lot of these changes that we’ve had to make during this pandemic are changes that continue in perpetuity.
ROI: Would one of those changes be a push to a cashless society?
TC: It’s not my expertise, but I could definitely see that. It’s really easy to hold your phone up to a device and process a payment for your coffee or something else. So, I don’t see why it wouldn’t be a possibility as people become more competent with those technologies and trust those technologies.
ROI: Last question. And the hardest one. Give us an economic outlook for the rest of this year, or even 2021?
TC: This is a really uncertain time. It’s hard to project when we’ll start the come out of this. This I can predict. I feel like we’re all rooting for science right now. There are going to be people who are comfortable when the treatments are better. They are going to be people who won’t be comfortable until vaccines are available. I think everyone’s different.
But I do think we’re a very resilient group here in New Jersey, and people are going to want to try to find ways to get back to doing business as soon as possible. But for me to try to project what the second half of 2020 and into 2021 is going to look like is too challenging. Things are changing too quickly.