PWSB approves $38 million in loans

Area small businesses find relief in Paycheck Protection Program loans to cover wages and other expenses during the Covid-19 pandemic

CHOCOLATE CHISEL OWNERS John Reichert and Elizabeth MacCrimmon stood outside their downtown Port Washington store, which recently received a Paycheck Protection Program loan that will help cover employee wages and other expenses for eight weeks during the Covid-19 pandemic. The couple credits Port Washington State Bank, which has approved 319 loan applications for $38 million, for their success in obtaining the sough-after loan. Photo by Sam Arendt
Ozaukee Press Staff

Port Washington State Bank approved 319 Paycheck Protection Program loans totalling $38 million to help struggling businesses stay afloat during the Covid-19 pandemic.

The loans are part of a $349 billion emergency small business-lending program designed to keep companies viable and workers on the payroll during a time of record unemployment. Small businesses with 500 employees or less and non-profit organizations are eligible.

Port Washington State Bank approved 87% of 365 applications before the emergency program ran out of money on April 16, President and Chief Operating Officer James Schowalter said. 

On Tuesday, the Senate passed the Paycheck Protection Increase Act of 2020, which would provide an additional $484 billion in loads for small businesses. The House of Representatives was expected to consider the measure Thursday.  

Schowalter said the bank has designated 16 of its 120 employees to process the loan applications. The employees have worked 12 to 14-hour days to handle all of the requests. 

“It’s been pretty much two full weeks of all hands on deck. We’ve never had anything like this in our history where we had to do this much this quickly,” he said. 

Schowalter said it was critical the timeframe for processing the applications was extended from five to 10 days by the Small Business Administration.

“That was a very important change because United States banking could not get these loans done in five days. There’s been millions of these loans done nationwide, and it’s just impossible to get that many loans through the system in that short period of time,” Schowalter said.

John Reichert, co-owner of the Chocolate Chisel in Port Washington, said his business received a loan last Friday that will pay all of his 19 employees’ wages for eight weeks. 

The downtown Port Washington store has had to limit its business to delivery and outside lobby service along Grand Avenue after Gov. Tony Evers last month directed the Department of Health Services to order bars, restaurants and similar types of businesses like the Chocolate Chisel to close except for delivery and pickup orders and prohibited gatherings of more than 10 people.

“I really want to compliment Port Washington State Bank because they got right on it and they followed through immediately. Because of their hard work and diligence, everything came through,” Reichert said, noting he applied for the loan on April 3, the first day the program was available.

Reichert said most of his employees were furloughed for a month, but because of the Paycheck Protection Program all of the workers have returned to their jobs.

“Even though we’re not having any customer contact, we’re bringing everybody back this week,” he said. 

The loan amount is based on the number of workers a business employed based on last year’s payroll record.

“You can’t arbitrarily apply for what you want. You can apply for less than you are eligible, but you cannot apply for more,” Schowalter said.  

Schowalter said the largest loan Port Washington State Bank processed was for $2.58 million and the smallest was $2,500. The average loan amount was $150,000. 

“We’ve helped a lot of small businesses here at the bank, and we also helped a lot of medium and larger size businesses too. It’s really been the full gamut,” Schowalter said. “I don’t know if we have ever had something like this happen as a global crisis that really affected every business sector simultaneously.”

According to the Small Business Administration’s website, 43,395 Paycheck Protection Program loan applications were approved for $8.3 billion in Wisconsin. Nationwide, 1.7 million applications were accepted for $342.3 billion through 4,975 financial institutions.

The loans have a maturity of two years at 1% interest. They will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent and utilities. At least 75% of the amount forgiven must have been used for payroll. 

Forgiveness is based on the employer maintaining or quickly rehiring employees. The amount of the loan  forgiven will be reduced if the number of full-time employees declines or if their salaries and wages decrease.

Reichert said the loan has sparked new life for his business, which has lost about $35,000, and plans to safely return to normal operations.  

“We want to keep our employees and the public safe. We’re setting it up so there will be no risk,” he said.

Reichert and Schowalter said the loan process is an evolving situation because there have been changes and clarifications to the Paycheck Protection Program nearly every day since it began on April 3.

“It’s been a really fluid process. Every day we would wake up and there would be some little thing that had changed overnight that we weren’t aware of before. Every business and applicant is different and some businesses were closed during this period of time under the governor’s order. As they worked through the program, little things changed relative to a certain sector,” Schowalter said. 

“All of us bankers had to pivot each and every day to make sure we were doing our best under the program’s parameters.”

Reichert agreed.

“People don’t have all of the information yet, and no one is quite sure how it will all pan out,” he said. “There are a lot of questions still, like do we pay an employee if they stay home?”

Schowalter said Port Washington State Bank was on track to fund all 319 loans by Wednesday, April 22. 

Schowalter hopes the remaining 46 businesses that applied through Port Washington State Bank can receive program loans.

“I’m certainly very hopeful that they will be approved,” he said. “I think there are a lot of businesses that could really utilize this funding and it will help them stabilize their business and get through this crisis.”




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