Iowa banks make up 95% of SBA lenders and their first-week efforts saved 325,000 jobs
JOHNSTON, IOWA (April 15, 2020) — Iowa bankers have been working 24/7 since April 3 to help Iowa’s small businesses that have been negatively impacted by the coronavirus pandemic — and their efforts are paying off.
In just more than a week, Iowa bankers have helped approve nearly $3.75 billion in loans through the U.S. Small Business Administration’s Paycheck Protection Program for 22,295 Iowa small businesses, according to SBA data from April 3 through Monday. With banks making up 95% of Iowa’s SBA lenders, they have been deeply committed to carrying out the program, which was launched to help companies weather the financial hardships of the pandemic and save jobs.
Thus far, the PPP loans approved by Iowa banks have saved about 325,000 small business jobs. The average size of a loan to an Iowa small business was $168,154. Tens of thousands more PPP loan applications are expected to be submitted and approved in the coming week. It is hoped that Congress will appropriate additional, sorely needed dollars for the program.
“Iowa bankers have a long history of being there for our communities in good times, but especially when times get tough. The owners of these small businesses are more than numbers on a spreadsheet. They’re our partners in strengthening Iowa’s main streets,” said John Sorensen, president and CEO of the Iowa Bankers Association. “Iowa bankers have long-term, established relationships with many of the small businesses applying for these loans, and they understand what’s at stake for our communities if these businesses suffer.”
This understanding is why bankers have been working tirelessly to navigate program details, while facing technical challenges and delayed program guidance. Bankers have been providing feedback to SBA officials and congressional leaders on how they could more quickly and effectively approve the deluge of loans coming through the pipeline.
Even before the pandemic, Iowa small businesses turned to their local banks for financial support. Iowa leads the nation with 81% of small business loan applicants seeking financing from a community bank, according to a 2019 study by the Federal Reserve Banks. The national norm is 44%.
In terms of the Paycheck Protection Program, the SBA reported this week that loans have been approved by 4,664 participating lenders in all U.S. states and territories. Nationally, nearly 1.04 million loans totaling $248 billion had been approved through Monday. Seventy percent of those loans were for amounts under $150,000. Overall, the average loan size was $239,152. And about half of the total funds allocated so far have gone to four sectors: construction; professional, scientific and technical services; manufacturing; and health care and social assistance.