4 Ways for Community Banks to Continue Serving PPP Borrowers

Posted by Jeff Grobaski | Sep 28, 2021 2:32:46 PM

When businesses desperate for funds from the Paycheck Protection Program were caught in application bottlenecks from big banks or had applications declined without knowing why community banks and credit unions stepped up. These financial institutions championed borrowers, often spending long hours working directly with applicants, ensuring that requests were approved.


According to the FDIC, community financial institutions rose to the challenge. Reporting from the agency shows that community banks made 28% of PPP loans, a figure disproportionately higher than the typical 15% share of total industry loans.


Now that much of the pandemic turmoil has subsided, the question becomes: How can banks make the most of these new relationships?

Talk to Borrowers About Future Business Plans

Though many borrowers were in panic mode when applying for a PPP loan, they have since devolved into a state of wait and see. As such, now that many industries have recovered—and even grown—in 2021, it’s time to talk to borrowers about their future needs. 


Scheduling these conversations is especially important now, as loan growth is slow and net interest margins are down, giving loan officers the opportunity to talk to borrowers about additional loans -- including other SBA loan options of which they may not be aware. As trusted advisors for PPP borrowers, loan officers should recommend loan programs like business lines of credit or equipment loans. 


Fortunately, the pandemic proved that remote meetings offer flexible scheduling. Loan officers can opt for the in-person meeting, or schedule a time to meet with borrowers virtually if that is more convenient. 

Make Borrowers Aware of Other Products and Services

The conversation with PPP borrowers should extend into deposit services so as to embed customers more deeply in financial institution offerings. This includes everything from credit or debit cards to cash management services.


Also, community financial institutions should segment the portfolios of new borrowers obtained through PPP financing and target them with email campaigns, or an educational series, about additional products. To precisely target these campaigns, the marketing department should compare borrowers of similar size or industry.


After all, borrowers may not explore additional products or services on their own, particularly if they don’t think they need them. It’s up to the institution to make these borrowers aware — while considering that the pandemic may limit the likelihood of a trip to a branch to speak with a universal banker. Digital channels, such as email or a chat feature within the online banking portal, provide opportunities to reach these borrowers.

Prioritize a Streamlined Loan Process 

Many bankers report the PPP process as chaotic, and rightly so. The program was quickly implemented, sometimes with conflicting guidance, by the SBA. But borrowers were desperate for the PPP money, so they weathered the application storm.


Moving forward, however, borrowers expect digital lending options. They now know that much of their business can be conducted remotely, including banking. Community financial institutions must be prepared with options like online applications and remote closings -- with an online notary -- to show these borrowers that they have best-in-class services available.

Build on the Foundation of Trust with PPP Borrowers

Community financial institutions became champions for borrowers and now have the opportunity to expand these relationships. Show these borrowers the very best of what your institution offers in terms of products, services, and the personal touch they won’t get from big banks.


There is but a small window of time before these borrowers look elsewhere for banking relationships. Epic River offers end-to-end SBA loan processing and remote online notary options for community banks and credit unions. Contact us today to learn more.

Written by Jeff Grobaski

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