Rush for loans has banks working overtime, and some pushed to the limits

GOLETA, Calif. - The rush was like a stampede at local banks and financial institutions nationwide when the opportunity opened Friday morning to get government assistance through a just-created payroll protection program.

It remained strong today.

Montecito Bank & Trust President George Leis said, "We have never had more phone calls come into Montecito Bank & Trust than we had on Friday. In one day we had more loan volume than our entire mortgage division had in an entire year." 

Leis said it was like nothing he had ever seen. The bank had 1,000 requests before it closed the site for the day on Friday.

Several workers put in extra hours to answer questions and make callbacks that would finish an application. "Hundreds and hundreds and hundreds of phone calls," said Leis.

Funds were offered under the Coronavirus, Aid, Relief and Economic Security (CARES) Act. What will help business owners is the funds coming from the Small Business Administration (SBA). These SBA-backed emergency loans in the Paycheck Protection Program will keep businesses afloat if they are on the verge of a financial collapse. They have to agree to certain terms, but it is likely their last hope.

The loans had a broad range. "The largest was about $8-million dollars, the smallest was $26-thousand dollars," said Leis.

This effort is to save both businesses and workers.

Thousands of businesses locally and millions nationwide are looking for relief and they are starting to apply. Without this funding, there are no other options for many others besides closing. That choice will immediately impact their employees and communities.

"The whole goal of the payment protection act is to keep small business workers employed or to get those workers back into the community if they laid them off. After eight weeks after providing the bank with some payroll documentation, the loan has an opportunity to be forgiven."

Leis says the staff knows in this time of crisis they are responding to those in need. "It is a once in a lifetime opportunity to make a difference in our our country and our community, and everyone is so proud to be part of that."

At Montecito Bank & Trust, a branch on Hollister Avenue in Goleta has been completely converted to handle the load process. Workers received emails and calls at a rate they had never seen before. They worked with customers and non-customers who wanted to apply for the loans and needed guidance along the way.

The goal is to offset the economic implosion that will happen if the funding stream stops.

The relief has had reported snags as the $349 billion paycheck process is rolled out.

Leis says the bank is meeting with the Board of Directors to decide how much it can handle.

This week, he expects the website to be open for about three hours a day for applications.

Frequently asked questions are answered on the bank's site. There's also information about the maximum loan that can be requested based on a calculation of payroll.

As part of the program for those who qualify, receive funding and keep their employees on staff for eight weeks, there's a loan forgiveness built into the plan.

More information can be found at: Montecito Bank &  Trust or The U.S. Department of the Treasury.