America’s Leading Banks: Supporting Small Businesses, Driving Economic Recovery Forward

America’s Leading Banks: Supporting Small Businesses, Driving Economic Recovery Forward

 

WASHINGTON – This week marks #SmallBusinessWeek, a time to celebrate the backbone of the American economy: our small businesses. When COVID-19 hit our communities, millions of small business owners were forced to implement staffing changes or shutter their operations altogether at no fault of their own. Fortunately, through the Paycheck Protection Program, 112 of the nation’s leading banks were able to administer more than 4 million loans worth more than $405 billion – more than half the total dollar amount lent through the program – helping drive our economic recovery forward and ensure small businesses could keep their doors open, their lights on, and employees on the payroll.

 

Yesterday, the SBA confirmed that most funding allocated for the Paycheck Protection Program has now been exhausted. Consumer Bankers Association CEO Richard Hunt released a statement in response, touting the remarkable role that banks played to administer this federal relief program: 

 

“Over the past year, banks across the country have moved heaven and earth to support the American people. In coordination with the SBA, banks worked around the clock to stand up an entirely new government program designed to provide relief to small businesses amidst unprecedented economic headwinds.”

 

Now, American economy is on a path to recovery and new data suggests that economic growth will be sustained in the months ahead:

 

• Last week, the Commerce Department reported that US GDP grew by 6.4% during the first quarter, the best performance since 1984.
• Rising consumer optimism, continued federal stimulus, and ample job openings are fueling a red-hot economy.

 

Further, while the pandemic brought challenges, America’s small businesses are poised for growth. In a new report released today by TD Bank, small business owners report they are doing better than expected as the economy continues to gain steam:

 

• 41% of small business owners expect to grow their revenue in 2021 while only 9% anticipate a decline.
• 57% of small businesses expect to expand hours and/or operations.
• 37% of small businesses are considering expanding product lines and services to grow business revenue or increase profits.

 

Throughout the last year, the strength of our financial system and America’s leading banks was critical to sustaining our economy and helping small businesses not only survive, but thrive:

 

• As FDIC Chair McWilliams recently said at the CBA Washington Forum, banks "served as a vehicle to [economic] recovery.”
• The nation’s leading banks entered the pandemic from a position of strength, and as OCC Acting Comptroller Paulson stated at CBA’s Washington Forum, "The performance you've seen out of banks over the last year during this pandemic is proof that when you start a downturn with a strong banking system, both the economy does better & the banks do better.”
• A recent report from the Federal Reserve noted that “among other actions, banking organizations have waived fees and restructured loans to ease financial burdens, continued to lend to households and businesses, and took steps to maintain safe and sound operations.”

 

Large banks, in coordination with the SBA, helped build the infrastructure to facilitate the Paycheck Protection Program (PPP), working around the clock to submit applications on behalf of millions of American small businesses:

 

• In just one year, lenders issued 166 years worth of SBA loans, with large banks distributing 4.1 million loans (41%) worth more than $405 billion (53%).
• 11 of the top 15 lenders through all of PPP were CBA members, accounting for over 1.9 million loans worth more than $176 billion.
• The average loan from large banks amounting to less than $100,000, spanning nearly every industry.
• A report from the American Enterprise Institute concluded that the PPP covered more than 80% of eligible U.S. small business employment, supporting 51 million American jobs in its first four months of operation.

 

Amidst ever-changing guidance from federal agencies, CBA served as a valuable resource to America’s leading banks and the communities they serve:

 

• CBA helped banks navigate 132 different rule changes, procedural notices, form revisions, and FAQ’s from the SBA.
• CBA has led daily calls with more than 70 of the nation’s leading banks to help them navigate the Paycheck Protection Program and other federal relief programs administered through banks.
• Working closely with SBA, the Department of Treasury, and lawmakers on Capitol Hill, CBA advocated for necessary changes to these programs to ensure their success.
• CBA led a coalition of business owners, non-profits, business trade groups and financial services associations in pushing for the passage of streamlined forgiveness for loans less than $150,000, amounting to the equivalent of $7 billion of additional small business relief.

 

Bottom line: Even as the Paycheck Protection Program winds down and the economy recovers, America’s leading banks will continue to support America’s small businesses, drive our economic recovery forward, and help finance the American dream.

 

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About the Consumer Bankers Association:

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.