Colorado community banks last week started submitting a flood of applications from business owners looking to get a piece of the estimated $284 billion earmarked for the new round of the Paycheck Protection Program loans.

Local banking officials said the second round of PPP, part of a $900 billion stimulus package Congress approved weeks ago, should go a lot smoother because of some key changes in the process.

“We hope these changes have eliminated the fire drill atmosphere of the first round, where everyone was afraid the big banks would get it all,” said Glen Jammaron, president and vice chairman of Alpine Bank. “There are less unknowns this time around.”

Alpine Bank delivered more than $300 million in PPP loans to some 4,000 customers in 2020.

“We were able to take care of all of our customers who needed a PPP loan,” Jammaron said.

The PPP loans are highly sought after, with a 1% interest rate on a five-year note. Some banks reported 80% or more of the first round of PPP loans were subsequently forgiven by the U.S. Small Business Administration.

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“This is likely the cheapest money we’ll ever see in our lifetimes, so it’s worth the extra effort to apply correctly,” said Bill Airy, owner of Lendio Denver.

Lendio is not a lender, but instead a “fintech lender” that shops loan applications to what Airy said is “the largest marketplace of small business lenders in the country.” It helped secure about $32 million in PPP loans to local customers.

InBank, a fast-growing Denver-based community bank, managed to secure almost $120 million for more than 550 customers, said CEO Ed Francis.

“We’ve fine-tuned our process so we can afford those who need funds the best opportunity to get them,” Francis said.

There are some key differences to secure a second-round PPP loan, the bankers said.

• Businesses must prove losses of at least 25% year-over-year sales revenue decline.
• The business must have fewer than 300 employees, as opposed to the 500 level in Round 1.
• The expense of applying for the loan, and the loan itself if forgiven, is now tax deductible and the loan forgiveness process is simplified.
• Not-for-profit associations such as chambers of commerce are eligible.
• There are provisions for “shuttered venue operators,” but they can’t secure those SBA grants and a PPP loan — it’s one or the other.

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Lawmakers appeared to prioritize small businesses in distressed communities with the provision that community banks were the only ones allowed to apply in the first two days this time around.

“The idea is that these banks got bullied out (by bigger banks), so it allocates the first two days to them,” Airy said. “Arguably it’s going to serve the most underserved small businesses in the most underserved communities. The idea is very good to put the priority on them, but we’ll wait and see if it has any actual affect to that end.”

“We know a lot more now than we did then,” said Alpine’s Jammaron.

Alpine, headquartered in Glenwood Springs, has 40 locations around Colorado. It served primarily Western Slope communities since its opening in 1973, but has expanded to the Front Range in recent years with locations in Boulder and three in Denver.

“We have a lot of long-term, core relationships in the communities where we’re located,” Jammaron said.

InBank’s Francis said the bank in 2020 used investment capital to “rebuild the tech structure of the company,” which helped it better process the PPP loans. InBank has nine locations in Colorado and New Mexico, and in December announced a $1.8 million capital investment from Brush Creek Partners.

The bankers suggested going to SBA website if they think their business is eligible, review the requirements, then collect the supporting paperwork that will be necessary.

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One other tip: for business owners who don’t qualify for a PPP loan, the SBA has funded Economic Injury Disaster loans. That’s a 3.75% fixed rate, 30-year loan – but easier to qualify for and apply for.

“If you’re going that route, go directly to the SBA to apply,” said Airy, warning those interested to avoid companies willing to take a fee to “help” business owners apply.

“Honestly, I did this one myself for my other business and it only took 10 minutes,” Airy said. “It’s incredibly simple, so don’t be duped.”