Game challenge – Start The Challenge http://startthechallenge.org/ Sat, 07 May 2022 13:01:30 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://startthechallenge.org/wp-content/uploads/2021/08/cropped-icon-32x32.png Game challenge – Start The Challenge http://startthechallenge.org/ 32 32 For many Minnesota businesses, PPP loans were a saving grace https://startthechallenge.org/for-many-minnesota-businesses-ppp-loans-were-a-saving-grace/ Sat, 07 May 2022 13:01:30 +0000 https://startthechallenge.org/for-many-minnesota-businesses-ppp-loans-were-a-saving-grace/ After years of brewing his own beer at home, Don Anderson, with the support of a childhood friend, wife and daughter, took a leap of faith in 2019 and opened Fat Pants Brewing Co. at Eden Prairie on Thanksgiving week. Sales in December, the brewery’s first full month of business, exceeded all expectations, leaving Anderson […]]]>

After years of brewing his own beer at home, Don Anderson, with the support of a childhood friend, wife and daughter, took a leap of faith in 2019 and opened Fat Pants Brewing Co. at Eden Prairie on Thanksgiving week.

Sales in December, the brewery’s first full month of business, exceeded all expectations, leaving Anderson optimistic about the new venture.

His story from there is a familiar one: The coronavirus pandemic spread across the United States, forcing mandatory restrictions and people sheltering at home. The Paycheck Protection Program saved the company.

Fat Pants received two loans of approximately $200,000, covering 25% of his payroll. They were both forgiven.

Minnesota hit a milestone, along with the United States as a whole, with more than 90% of PPP loans forgiven. Overall, businesses based in the state received 228,000 loans worth $16.6 billion.

Fat Pants had its first profitable month in February and an even better March. Now he’s dealing with small business decisions rather than pandemic issues. The brewery has expanded to add more space for live music, large gatherings, and community events like bingo.

Although the Andersons built in a six-month cash cushion in their business plan, they couldn’t have stretched those savings over a pandemic that lasted more than two years.

The PPP loans, arranged through the Old National Bank, “gave us the chance to breathe a little easier,” Anderson said. “For the people who depend on it [place] for a job, they didn’t have to panic.”

Government assistance was not enough for many businesses – from retailers to museums – which did not survive the two years.

At least six children’s museums have closed in the United States, said Louise Dickmeyer, executive director of the Children’s Museum of Southern Minnesota in Mankato. Without two PPP loans, less than $150,000 combined, the Mankato Museum might have made the list.

When stay-at-home orders hit in March 2020, the museum immediately laid off all employees to cut expenses. But with PPP funds, Dickmeyer was able to hire a small number of people to complete construction of a new exhibit, and later even more as it prepared to reopen in October 2020 at 25% capacity.

In 2020, the museum had a total income of $49,000. For 2021, revenues had tripled, but were still well below prior figures. By comparison, in 2019 the museum had revenue of $223,000, Dickmeyer said.

“PPP loans were critical to our ability to stay solvent and stay in business,” she said. The loans, both arranged by Bremer Bank, were “absolutely critical for us”, she said.

After the first quarter of this year, the museum’s revenues are stable enough to fully cover expenses, Dickmeyer said. The museum is operating with nearly half the staff it had before COVID-19, but plans to create jobs over the next three years to support an expansion.

“Things have gotten better,” she said. “We plan to get back to where we were or even surpass that. The future is bright.”

The PPP loan program, enacted by the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, ended on May 31, 2021. Existing borrowers are eligible to have their loans forgiven if they meet certain criteria ensuring that the funding was used for payroll and other business expenses.

Nationally, more than 11 million loans have been approved for a total of $799.8 billion. Forgiveness was requested for more than 90% of the total loan value of all PPP loans, and 90% of the total PPP loan value was forgiven, in whole or in part, according to the Small Business Administration.

Paying off two PPP loans while trying to keep her business would have been too much for Angel Rogers, the owner of Angel’s Learning Center in Brooklyn Park, a daycare for children ages 6 weeks to 10 years old, to handle.

Enrollment plummeted as parents kept their children at home for months. Rogers used two PPP loans made through the Minneapolis-based Metropolitan Economic Development Association (MEDA) to pay its staff, bills and rent.

After weathering COVID-19, Angel’s Learning Center is back fully staffed with just under 20 employees, and enrollment is back to normal levels, Rogers said.

“I saw what my payments would have been; it would have been difficult,” she said. “I would have been good until I had to start paying back.”

For some Minnesota business owners, PPP loans have not only helped pay employees, but they have also driven businesses to growth.

Mohamed Omer had a growing Mediterranean food truck operation that faltered once downtown employers sent office workers home to work in the spring of 2020. He used the loans to hire employees for develop his hot chicken take-out restaurant.

Omer replaced his food truck dishes with chicken in varying degrees of spiciness and parked his food trucks in residential areas and in front of apartment buildings. He opened a restaurant, Nashville Coop, in St. Paul in September 2020.

Omer is also a MEDA client and has received two PPP loans through the nonprofit. The loans covered 15% of his payroll, he said. Without it, Omer wouldn’t have been able to afford efficient staff who could run his food truck-turned-restaurant business, he said.

“It was difficult to find employees,” Omer said. “To get them back, I had to pay more money. I had to pay incentives.”

Since 2020, Omer has expanded to three food trucks, placed a Nashville Coop inside US Bank Stadium and Target Center, and recently opened a second full restaurant in Rochester, with plans to open a third. in Dinkytown near the University of Minnesota campus.

Nashville Coop employs nearly 40 people between its restaurants and food trucks, Omer said.

“Without MEDA’s support, it’s hard to come to this,” Omer said.

In total, MEDA processed 446 PPP loans, and less than 4% were not cancelled.

While helping as many clients navigate the PPP process as possible, MEDA had to secure a PPP loan itself to keep the nonprofit organization going, said chief executive Alfredo Martel.

“A small business owner was not prepared to have to respond to a global pandemic to save his business,” Martel said. “Our customers weren’t prepared for the world to change.”

Initially, the PPP system was designed to last just eight weeks, said Brian McDonald, district manager for the Small Business Administration that includes Minnesota. The support request was off the charts.

“It showed that at first no one knew how long [the COVID-19 effect] was going to last,” he said.

Some of the largest banks operating in the Twin Cities, including US Bank, Bremer and Wells Fargo, processed the loans.

Bremer Bank has processed over 12,000 loans nationwide worth over $2 billion under the two PPP rounds. The salaries of around 218,000 jobs were covered by the money, the bank said.

Wells Fargo nationwide has underwritten loans for 282,000 businesses worth $14 billion and covering the payroll of 1.7 million jobs. In Minnesota, the bank worked with 7,000 small businesses with an average loan size of $42,500 to cover payroll for 38,500 employees, the bank said. Ninety-five percent of those companies have applied for forgiveness, and the SBA has approved more than 98 percent of them.

US Bank was responsible for 174,000 loans nationwide for more than $10.7 billion in approved funding, helping payroll more than a million jobs, a spokesperson said.

The PPP program has dramatically increased the number of banks servicing SBA loans — from 1,500 before the pandemic to more than 5,000, McDonald said.

Nick Jellum, president of Stillwater-based Jellum Law, knows firsthand the influx of new SBA lenders. Jellum Law, a banking and commercial law firm, has specialized in representing SBA lenders for the past two decades, and in 2020 demand for its services has grown to help hundreds of lenders across the country. , including Minnesota-based community and national banks, navigate PPP.

For some lenders and borrowers, many in communities with fewer banks, the PPP was their first involvement in an SBA program, Jellum said.

“Greater lender awareness of the SBA and its various programs is a benefit not only to the lending community, but certainly to the small business community,” he said.

While the mechanics of financing and running a brewery and restaurant were new to Anderson, he knows PPP saved young Fat Pants — and his dream.

“I didn’t want it to fail,” he said.

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Montecito Bank Reports Asset Growth and Loan Decline in First Quarter https://startthechallenge.org/montecito-bank-reports-asset-growth-and-loan-decline-in-first-quarter/ Tue, 03 May 2022 22:08:17 +0000 https://startthechallenge.org/montecito-bank-reports-asset-growth-and-loan-decline-in-first-quarter/ By Brooke Holland Tuesday, May 3, 2022 Montecito Bank & Trust’s assets grew more than 14% in the year ended March 31, with “strong” growth in deposits, the bank said in its May 2 first-quarter earnings release. The Santa Barbara-based bank, the largest financial institution based in the tri-county area, said its total assets increased […]]]>

By
Brooke Holland

Tuesday, May 3, 2022

Montecito Bank & Trust’s assets grew more than 14% in the year ended March 31, with “strong” growth in deposits, the bank said in its May 2 first-quarter earnings release.

The Santa Barbara-based bank, the largest financial institution based in the tri-county area, said its total assets increased by $302.45 million, closing at $2.39 billion, at the end of the first quarter 2022.

Deposit growth of $303.85 million, or more than 16% year-over-year, pushed total deposits at the end of the quarter to $2.19 billion, according to the release on results.

Loans fell $186.07 million, or 13.56%, year-over-year due to the cancellation of Federal Payroll Protection Program loans, quarter-end loans totaling $1.19 billion. Loan growth was $66.5 million, excluding PPP loans canceled in the first quarter, according to the bank.

First quarter net income increased nearly 26% to $4.81 million from the first quarter of 2021.

Janet Garufis, President and CEO of Montecito Bank & Trust, said in a press release that the bank continues to scale down its PPP rebate program, assisting customers with their inquiries daily, and anticipates the full resolution of this program by the end of the second. quarter 2022.

“While our first quarter results are strong, with loans and deposits continuing to grow, we remain cautious about the potential impacts of rising rates and inflation,” Garufis said.

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Incomes Rise in West Bank Community as PPP Loans End https://startthechallenge.org/incomes-rise-in-west-bank-community-as-ppp-loans-end/ Mon, 02 May 2022 17:49:02 +0000 https://startthechallenge.org/incomes-rise-in-west-bank-community-as-ppp-loans-end/ By Brooke Holland Monday, May 2, 2022 Goleta-based Community West Bancshares’ net profit rose more than 31% for the quarter ended March 31 to $4 million, or 45 cents per diluted share, the company said April 29. Community West Bank’s holding company reported net income of $3 million, or 35 cents per diluted share, for […]]]>

By
Brooke Holland

Monday, May 2, 2022

Goleta-based Community West Bancshares’ net profit rose more than 31% for the quarter ended March 31 to $4 million, or 45 cents per diluted share, the company said April 29.

Community West Bank’s holding company reported net income of $3 million, or 35 cents per diluted share, for the same period last year.

The company attributed the increase in profits in the first quarter of 2022 to a tax-exempt payment of $549,000 on a bank-owned life insurance policy and the collection and recovery of legal fees from $992,000 following a legal settlement, the company said in its results. Release.

First-quarter 2022 results reflect lower interest and fees on Small Business Administration Paycheck Protection Program loans from the prior quarter and the prior year, due to a slowdown in the economy. cancellation of PPP loans as program draws to a close, according to press release.

Non-interest bearing demand deposits reached $226.1 million, compared to $196.6 million a year earlier.

Community West “produced strong first quarter earnings, highlighted by revenue growth in top line and net income, consistent year-over-year growth in deposits and improved operational efficiency,” President and CEO Martin Plourd said in a statement. “Return on average assets, return on average equity and our efficiency ratio have all improved as we continue to deepen our presence in California’s central coast.”

The net interest margin was 3.86% in the first quarter, compared to 4.19% in the first quarter of the previous year. Net interest margin “improved on a linked quarterly basis, primarily due to higher yields on interest-bearing assets,” Plourd said.

Community West’s board of directors also declared a quarterly cash dividend of 7.5 cents per common share, payable May 31 to common shareholders of record May 13.

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Maine CDFI offers interest-free small business loans https://startthechallenge.org/maine-cdfi-offers-interest-free-small-business-loans/ Fri, 29 Apr 2022 07:00:00 +0000 https://startthechallenge.org/maine-cdfi-offers-interest-free-small-business-loans/ Q&A: John Egan of Genesis Fund explains why he became an evangelist of zero interest loans and mortgages. Maine has a burgeoning refugee and immigrant population with a keen entrepreneurial spirit that attracts the attention of a Lewiston, Maine, CDFI called Genesis Fund. Many are from Somali regions or neighboring countries due to chronic conditions […]]]>

Q&A: John Egan of Genesis Fund explains why he became an evangelist of zero interest loans and mortgages.

Maine has a burgeoning refugee and immigrant population with a keen entrepreneurial spirit that attracts the attention of a Lewiston, Maine, CDFI called Genesis Fund. Many are from Somali regions or neighboring countries due to chronic conditions forcing myriads of people into camps or on the move for more than 30 years.

According to United Nations Refugee Agency, more than 650,000 Somalis have been displaced due to climate issues in the first eight months of 2020 alone. Lewiston itself had a downtown poverty rate of 46% in 2000 after rural flight problems, but in 2001 it began to turn the tide with the resettlement of 1,000 Somali refugees from across the United States. United. He quickly became one of fastest growing communities in Maine.

John Egan, head of loans at Genesis Fund, first saw the potential for developing a new loan product when he worked with Djiboutian businessman and former accountant Yassin Moussa on the purchase of a multifamily dwelling while working at his former employer, Coastal Enterprises Inc. (CEI). He found that members of the immigrant Muslim community sought to borrow money for a fee, rather than accrue interest. When he moved to Genesis Fund a year and a half ago, he also introduced fee-based loans there.

Egan told us about the benefits of fee-based lending and what it will take to get the big banks and other financial institutions on board.

How do interest-free loans work?
It is based on a commission, calculated to take into account the costs of the loan from the lender, the CDFI. Fees are clearly explained and illustrated transparently to the borrower. Most of the population that will use this product are immigrants to the United States, but not exclusively.

This community has very strong entrepreneurial skills, but lacks access to credit markets, as community banks and credit unions charge interest. A CDFI can serve the community so that immigrant populations can enrich themselves and prosper.

In your discussions with other institutions, how do they view fee-based loans?
It’s as much a part of my job with this product as the loan itself. I talk to community banks, loan departments, even bank presidents. The banks agree that they would like to find out, but have not yet done so. Part of the challenge is managing a 0% structured loan.

Their loan management software and systems are not set up to handle a fee instead of an interest rate. So I say to the president of the bank, ‘It’s a software problem. You should be able to fix this problem. We are trying to get local banks to set up a small parallel loan portfolio.

And our little CDFI figured out how to modify our lending software, so why can’t they? I’m not going to take no for an answer.

Well, from an operations perspective, financial institutions have proprietary systems, but use additional integrations or third-party apps all the time, right?
Yes. I understand that these systems are difficult to modify and that there are all sorts of (regulatory) reports from the loan management systems. My suggestion is rather than try to fit the loan to software that won’t accept it, create a separate pool until you have enough volume to justify upgrading the software. We find that most banks and credit unions are interested; they want to serve a growing population within their community.

I’m trying to get them to offer a home loan so these entrepreneurs can buy a house – controlling where you live. It’s a classic American value, and that’s why most of these immigrants are here. So let’s make it happen.

How did city leaders view this?
Initially, with a lot of skepticism, even questioning the legality. I burst out laughing when someone asked me the question 8-10 years ago. Municipalities now understand, they are understanding and supportive.

Is it really that different from a risk perspective?
Financially, it’s pretty much the same, if not exactly the same for the lender. Income, risk, security guarantees – they are all the same. It’s just a fee instead of interest, and if they pay off the loan sooner, they pay less in fees. It works the same way.

Thus, banks do not incur losses on loan income and deposit structures on their own balance sheets.
That’s right. CEI has been providing fee based loans for over 10 years and they have no loss, Genesis Fund has only done so for about a year and a half. We only have a handful of loans, but so far they’ve done well, so there’s no added risk – underwriting is the same.

So what are the end goals when it comes to collaboration?
We collaborate with CEI on all kinds of things. We also work with banks on subordinated loans for an investment – say the renovation of a six-unit apartment – the bank makes, say, 60% of the loan, Genesis Fund 30%, the borrower invests 10% – the bank can see how it works, and they don’t take a lot of risk because they would be in a leadership position above the CDFI.

Want to show a proof of concept?
That’s right. And this is a very common role that CDFIs have played with local institutions, proof of concept.

We also provide technical support, included in the fees. We work with borrowers pre-loan and post-closing. I hope to go to the mosque where the community of Yassin gathers to explain how it can work for his community. Everyone wants it to be a success. Preparing borrowers to understand is therefore as important as the loan.

I won’t give up until we have a bank that offers a commission loan or a home mortgage, because that’s what has to happen.

This story is part of our series, CDFI Futures, which explores the community development finance industry through the lens of equity, public policy and inclusive community development. The series is generously supported by Partners for the Common Good. Sign up for PCG’s CapNexus newsletter at capnexus.org.

Hadassah Patterson has been writing for media outlets for more than a decade, contributing seven years to local news online and with 15 years of business writing experience. She currently covers politics, business, social justice, culture, food and wellness.

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Foreign loans swell to $15 billion in July-March https://startthechallenge.org/foreign-loans-swell-to-15-billion-in-july-march/ Fri, 22 Apr 2022 03:27:58 +0000 https://startthechallenge.org/foreign-loans-swell-to-15-billion-in-july-march/ ISLAMABAD: Pakistan’s former Tehreek-e-Insaf (PTI) government contracted $15 billion in gross foreign borrowing during its last nine months in office, bringing total gross foreign borrowing to over $57 billion during its tenure. reign. The Ministry of Economic Affairs released the external debt bulletin on Thursday for the July-March period of the current fiscal year. The […]]]>

ISLAMABAD:

Pakistan’s former Tehreek-e-Insaf (PTI) government contracted $15 billion in gross foreign borrowing during its last nine months in office, bringing total gross foreign borrowing to over $57 billion during its tenure. reign.

The Ministry of Economic Affairs released the external debt bulletin on Thursday for the July-March period of the current fiscal year.

The figures were released the day Pakistan’s outgoing Finance Minister Shaukat Tarin and his successor blamed each other for the worrying debt situation.

Total loans received by former Prime Minister Imran Khan’s last government from July to March of the current fiscal year amounted to $15 billion, according to data from the Ministry of Economic Affairs and Bank of India. State of Pakistan (SBP).

These include the disbursement of $13.5 billion by international creditors and nearly $1.4 billion by overseas Pakistanis.

The Ministry of Economic Affairs said it recorded gross foreign lending of $12.6 billion in July-March of the 2021-22 financial year.

SBP data showed it had also received nearly $1.4 billion in very expensive foreign loans under Naya Pakistan Certificates – a new debt instrument introduced by the previous PTI government to take on more loans. strangers.

As a result, cumulative gross foreign loans secured in the first nine months of the current fiscal year jumped to a record $15 billion, official statistics showed.

About 90% of new gross external lending was aimed at filling the budget gap and supporting foreign exchange reserves, which remain at an extremely low level of $10.8 billion.

The former prime minister remained highly critical of the country being buried under the burden of debt by the PPP and PML-N governments. But his government broke all previous records when it came to taking out new borrowing and adding net debt.

Khan’s government took on gross borrowings of $57 billion during the 43-month rule, including loans taken on the central bank’s balance sheet like United Arab Emirates (UAE) $2 billion and an exchange additional Chinese currency of $1.5 billion.

Lily Interest free loans of Rs7.6b disbursed

Previously, the gross foreign borrowing figure was reported at $53 billion due to the exclusion of the UAE and additional Chinese currency borrowing from the calculations.

Of $57 billion, the previous government repaid $26 billion in repayments and added $31 billion to the external public debt that falls under the Department of Finance.

The PML-N government had taken out about $33 billion in gross foreign loans in its first four years in office

In June 2018, external public debt stood at $75.3 billion, and by December 2021 it has already reached $102.3 billion – an addition of $27 billion under Imran Khan’s leadership.

The net addition during the Khan period could reach $30 billion once March data becomes available.

Statistics from the Ministry of Economic Affairs showed that in the fiscal year 2018-2019, the PTI government contracted gross foreign borrowings amounting to $11 billion.

Another $2 billion loan was taken from the UAE on the central bank’s books. That year, the International Monetary Fund (IMF) classified China’s safe as external public debt.

The former government took $10.6 billion in 2019-2020, excluding IMF borrowing.

In fiscal year 2020-21, the PTI government took in gross foreign loans of $14 billion. The Ministry of Economic Affairs reported $12.6 billion in foreign loans in nine months. Separately, the PTI government took $3 billion from the IMF and $2.4 billion under the Naya Pakistan certificates which are accounted for in the SBP accounts.

Due to the increasing reliance on loans to increase foreign exchange reserves and finance the budget deficit, the cost of debt service has risen considerably.

After the new government told the cabinet about the deteriorating debt situation, former finance minister Shaukat Tarin and Miftah Ismail blamed each other for the debt situation.

“Miftah Ismail, please don’t mislead people,” Tarin remarked.

The total debt incurred by the PTI government was 17.8 trillion rupees. Of which 8.9 trillion rupees were interest payments, 4.4 trillion rupees from rupee devaluation, 400 billion rupees as buffer stock and only 3.9 trillion rupees were net borrowings, Tarin tweeted.

He added that the debt-to-GDP (gross domestic product) ratio was 71.5% of GDP at the end of the PML-N government, which Tarin said was reduced to 66% during the PTI’s tenure.

However, Tarin miscalculated the debt-to-GDP ratio by using two different base years of the economy, inviting reaction from his predecessor.

The total debt increased by the PTI in March 2022 exceeded 20 trillion rupees.

“Why are you giving December 2021 numbers,” Ismail replied through his series of tweets. “Isn’t that cheating? Surely we expect better from you,” Ismail said.

The newly appointed Finance Minister said that the budget deficits incurred by PTI in the first three years amounted to Rs 10.22 trillion.

“When you calculate debt to GDP, why (Tarin) do you use different bases on our year and yours,” Ismail questioned while pointing out the inconsistencies in the argument built by his predecessor.

Published in The Express Tribune, April 22n/a2022.

To like Business on Facebook, to follow @TribuneBiz on Twitter to stay informed and join the conversation.

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$10.5 billion in Paycheck Protection Program loans have been issued to 84,000 Long Island businesses and nonprofits https://startthechallenge.org/10-5-billion-in-paycheck-protection-program-loans-have-been-issued-to-84000-long-island-businesses-and-nonprofits/ Thu, 21 Apr 2022 18:12:27 +0000 https://startthechallenge.org/10-5-billion-in-paycheck-protection-program-loans-have-been-issued-to-84000-long-island-businesses-and-nonprofits/ MMore than 84,000 Long Island businesses and nonprofits have received a total of $10.5 billion in loans through the federal government’s flagship pandemic initiative, the Paycheck Protection Program, according to a Newsday analysis of the new data. The PPP was launched to provide employers with the funds needed to keep workers on the job or […]]]>

MMore than 84,000 Long Island businesses and nonprofits have received a total of $10.5 billion in loans through the federal government’s flagship pandemic initiative, the Paycheck Protection Program, according to a Newsday analysis of the new data.

The PPP was launched to provide employers with the funds needed to keep workers on the job or to rehire them as the US economy was shut down in March 2020 to slow the spread of the coronavirus. Small businesses and their advocates have criticized banks and other private lenders for initially helping large corporations and publicly traded companies secure multimillion-dollar loans.

The situation improved in 2021, the second year of the PPP, as lenders increased the number of small loans to 77% of the total on the island, a sign that more aid was directed towards family businesses, according to the analysis.

“The numbers shifted to the little guy.”

-Eric Alexander, founder of the LI Main Street Alliance

“There was a harsh inequity that happened in the early weeks of the PPP when the loans went to the rich and didn’t reach the people who needed them most,” said Eric Alexander, founder of the LI Main. Street Alliance, which represents 45 city centers. which are being revitalized. The alliance, working with chambers of commerce, has helped educate small business owners about the relief program.

“Congress and the [U.S. Small Business Administration] made changes to fix the PPP and everyone doubled down on helping small businesses,” Alexander said. “The numbers shifted to the little guy. There was progress, not perfection” by the time the program ended in May 2021, he said.

recommended readingMore than 84,000 LI and non-profit businesses have obtained PPP loans. See those near you.

Bigger impact in 2021

The PPP had a greater impact in its second year in 32 low- and moderate-income communities, including Brentwood, Copiague, Hicksville, Glen Cove and Riverhead. Borrowers in these communities received about 12,800 loans in 2021, nearly a quarter of all loans made in the region that year, compared to about 9,550, or just 15% of the total in 2020, according to the analysis of data obtained under the Freedom of Information Act.

A Glen Cove-based nonprofit, SCO Family of Services, received a $10 million loan, the program’s maximum.

“If we hadn’t gotten this bailout, we likely would have cut programs and services — and that means cutting staff at a time when our customers needed us more than ever,” said Keith Little, president and chief from the leadership of SCO, which cares for children, homeless people, people with substance abuse problems and people with developmental disabilities. The agency operates group homes and day programs.

“We were in panic mode when we applied for the PPP loan last year,” he said. “We were understaffed… We had to keep people and reward them for their willingness to work where infection rates were high.

The nonprofit organization, founded in 1895, has more than 3,000 workers on Long Island and New York.

While SCO’s loan was among the largest in Nassau and Suffolk, more of the region’s smaller businesses also received help in the second year of the PPP: 77% of loans granted in 2021 were below $50,000, down from 66% in 2020.

The amount of the loan was determined by the number of employees; a $50,000 loan indicates a business with less than a dozen employees. According to the analysis, one in five loans granted over the two-year period was less than $10,000.

The loans were repayable — that is, they could be turned into grants — if the money was used primarily for payroll and certain other conditions were met. If borrowers do not qualify for forgiveness, the loans, bearing an interest rate of 1%, must be repaid in two to five years.

According to the analysis, three-quarters of PPP loans made on Long Island were eligible for forgiveness as of April 4.

The PPP reached a more diverse group of borrowers after Congress and Presidents Donald Trump and Joe Biden set aside federal loan guarantees and exclusive application processing days for smaller and minority-owned businesses, among others. More sole proprietors and independent contractors without employees have also become eligible for the aid.

Second loan for some

While 84,000 establishments received PPP loans, more than 120,500 loans were issued in Nassau and Suffolk as 36,500 borrowers qualified to receive a second loan.

Cord Contracting Co. in Woodbury, specializing in interior construction, received the most: the maximum of $10 million for his first loan, plus a second loan of $2 million. The company had 272 employees when she applied, records show.

Another contractor, Island Acoustics LLC in Bohemia, was No. 2 with two loans, totaling $10.4 million.

Ten other large employers each obtained loans of $10 million. They understand the development Disabilities Institute, New York Health Care, Newsday Media Group, Sam Ash Music, Summit Security Services and Whitsons Food Service.

However, some businesses and nonprofits did not benefit from the PPP because it closed before their loan application could be processed, they lacked payroll records and other documents, or they threw in the towel. when the first bank refused them.

“A lot of smart people either didn’t know about this program or applied too late,” said Stephen Schwartz, a senior consultant at financial advisory firm Asset Enhancement Solutions LLC in Uniondale, who has helped borrowers navigate the process. . “A lot of people gave up when the financial institution didn’t give them a reason to reject their loan application.”

“All you had to do was Google ‘PPP’ to find a lender to help you.”

-Neil Seiden, President of Asset Enhancement Solutions LLC at Uniondale

Still, the increased participation of online-only banks such as Kabbage in the PPP last year has helped companies that didn’t have a multi-year relationship with a lender or had a checkered credit report, according to Neil Seiden, President of Asset Enhancement. He said the company helped secure 1,500 PPP loans worth $150 million for customers in 35 states.

Online banks “made things much easier in 2021 because all you had to do was Google ‘PPP’ to find a lender to help you out,” Seiden said. , so a lot of [online lenders] seeing that there was a huge amount of money to be made… The banks started taking everything; the amount of the loan did not matter,” he said.

Even with more lenders participating last year, the process of getting a PPP loan still took weeks, and in some cases, months.

“PPP loans have helped me maintain my staff…I would have struggled if I hadn’t received support from the government.”

-Alan Bernstein, owner of Hand & Stone Massage and Facial Spa at Hewlett

Alan Bernstein, owner of Hand & Stone Massage and Facial Spa at Hewlett, said he tried five times to submit a PPP application online to his bank, JPMorganChase, without success. Citibank refused it.

Finally, Bernstein was approved by Northeast Bank in Lewiston, Maine for a $103,565 loan in February 2021 and received a second loan three months later for the same amount. Both loans were canceled, he said.

“PPP loans helped me maintain my staff, giving them extra pay while they worked during the pandemic,” said Bernstein, who employs about 25 people at the business he opened in October 2015. after years of working in information technology for large banks. He had hoped the spa would make its first profit in 2020.

“I would have a hard time if I hadn’t received support from the government,” Bernstein said. “Instead, I’m back to where I was before the virus and looking for ways to grow my business.”

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Truist (TFC) Q1 earnings beaten on provision delivery, higher loans https://startthechallenge.org/truist-tfc-q1-earnings-beaten-on-provision-delivery-higher-loans/ Tue, 19 Apr 2022 13:17:00 +0000 https://startthechallenge.org/truist-tfc-q1-earnings-beaten-on-provision-delivery-higher-loans/ Financial truistTFC’s first-quarter 2022 adjusted earnings of $1.23 per share significantly beat Zacks’ consensus estimate of $1.12. Net income increased by 4.2% over the prior year quarter. Results were helped by modest average loan growth and provision benefits. However, falling revenues, rising expenses and relatively low rates were the main headwinds. Reported results for the […]]]>

Financial truistTFC’s first-quarter 2022 adjusted earnings of $1.23 per share significantly beat Zacks’ consensus estimate of $1.12. Net income increased by 4.2% over the prior year quarter.

Results were helped by modest average loan growth and provision benefits. However, falling revenues, rising expenses and relatively low rates were the main headwinds.

Reported results for the quarter exclude restructuring and charges related to the BB&T-SunTrust Banks merger, additional merger-related operating expenses, a gain on the buyout of a non-controlling interest relating to the acquisition of certain merchant service relationships and losses on sales of securities. After taking these items into account, net income available to common shareholders (GAAP basis) was $1.33 billion or 99 cents per share, compared to $1.33 billion or 98 cents per share in the quarter. ‘last year.

Revenues down, expenses up

Total revenue was $5.33 billion, down 2.9% year-over-year. The top line missed the Zacks consensus estimate of $5.52 billion.

The tax equivalent NII decreased 3.1% from the prior year quarter to $3.21 billion. The decline was due to lower purchase accounting accretion, lower fees on Payroll Protection Program (PPP) loans and lower lending. These were partly offset by growth in the securities portfolio and lower funding costs.

Net interest margin contracted 25 basis points (bps) year-over-year to 2.76%.

Non-interest revenue fell 2.1% to $2.14 billion. Excluding certain non-recurring items, non-interest income decreased by 1.1%.

Non-interest expense was $3.67 billion, up 1.8% from the prior year quarter. Adjusted expenses remained relatively stable at $3.12 billion.

The adjusted efficiency ratio was 58.3%, compared to 56.9% in the first quarter of 2021. A rise in the efficiency ratio indicates a deterioration in profitability.

As of March 31, 2022, total average deposits were $415.2 billion, up 1% sequentially. Average total loans and leases of $292.5 billion increased slightly.

Credit quality is improving

As of March 31, 2022, total non-performing assets (NPA) were $1.14 billion, down 12.6% year-over-year. As a percentage of total assets, NPAs were 0.21%, down 4 basis points.

Provision for losses on loans and leases was 1.44% of total loans and leases held for investment, which decreased by 50 basis points. Net write-offs were 0.25% of average loans and leases, down 8 basis points from the prior year quarter.

Provision for credit losses was a profit of $95 million compared to a provision of $48 in the year-ago quarter. The releases of reserves, due to the improvement in the economic outlook, led to increases in the provision.

Robust profitability and capital ratios

At the end of the quarter under review, the return on average assets was 1.07%, compared to 1.17% in the prior year quarter. The average common equity return was 9%, up from 8.7% in the first quarter of 2021.

As of March 31, 2022, the Tier 1 risk-based capital ratio was 11%, compared to 12% in the prior year quarter. The Common Equity Tier 1 ratio was 9.4% as of March 31, 2022, compared to 10.1% as of March 31, 2021.

Our opinion

Truist Financial’s efforts to capitalize on the investment banking and insurance businesses bode well and will contribute to fee income growth going forward. An increase in loan demand, higher rate expectations and robust economic growth will support financials. However, increased spending and ambiguity over geopolitical and economic risks remain major concerns.

Truist Financial Corporation Price, Consensus, and EPS Surprise

Truist Financial Corporation price-consensus-eps-surprise-chart | Quote from Truist Financial Corporation

Truist Financial currently carries a Zacks rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of other major banks

Falling Markets Revenue, Reserving and Lower IB Fees Affected JP MorganJPM’s first-quarter 2022 earnings of $2.63 per share, which missed Zacks’ consensus estimate of $2.73. Results for the reported quarter included net build up of credit reserves and losses in credit and other adjustments.

During the first quarter, JPM announced a net build of credit reserves of $902 million, given “higher probabilities of downside risks”.

Wells FargoWFC’s first-quarter 2022 earnings per share of 88 cents beat Zacks’ consensus estimate of 81 cents. However, net income was down 14% year-on-year. The reported quarter results included the impact of a $1.1 billion lower provision for credit losses.

Results benefited from a higher NII, provisions, marginally lower costs and strong average loan growth. Additionally, WFC’s credit quality remained strong during the quarter. However, disappointing non-interest income and weak mortgage activity were the main headwinds.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Loans, trading to support BofA’s (BAC) Q1 earnings, IB to hurt https://startthechallenge.org/loans-trading-to-support-bofas-bac-q1-earnings-ib-to-hurt/ Wed, 13 Apr 2022 11:25:11 +0000 https://startthechallenge.org/loans-trading-to-support-bofas-bac-q1-earnings-ib-to-hurt/ After witnessing the gradual normalization of trading activity over the past few quarters, trading revenue is expected to have surprisingly rebounded for Bank of America BAC in the first quarter of 2022. So trading revenue could provide some support for its results, which are expected to be announced on April 18, before the opening bell. […]]]>

After witnessing the gradual normalization of trading activity over the past few quarters, trading revenue is expected to have surprisingly rebounded for Bank of America BAC in the first quarter of 2022. So trading revenue could provide some support for its results, which are expected to be announced on April 18, before the opening bell.

The first quarter began with expectations for trading volumes falling to levels seen during the pre-pandemic era after a stellar performance over the past two years. Yet the ongoing conflict between Russia and Ukraine and the prospect of multiple and larger rate hikes by the Federal Reserve to control runaway inflation have led to an increase in client activity and trading volume. during the quarter.

These developments have led to an increased level of volatility in both equity and bond markets. Thus, BAC is likely to have seen a solid improvement in trading revenue this time around.

Zacks’ consensus estimate for equity trading revenue of $1.63 billion suggests a 20.2% increase from the figure reported in the prior quarter. The consensus estimate for fixed income trading revenue of $2.53 billion indicates a jump of 60.5%. The consensus estimate for total trading revenue is set at $4.15 billion, implying a 41.5% increase.

Other major factors

Loan Application and Net Interest Income (NII): Credit activities continued to improve in the first quarter. According to the latest data from the Fed, demand for commercial and industrial loans, home loans and consumer loans has accelerated. In addition, BofA’s net interest yield and the NII were likely positively impacted by the Fed’s 25 basis point interest rate hike in mid-March.

The Zacks consensus estimate for BAC’s average interest income assets is pegged at $2.78 trillion, suggesting a 1.1% increase from the prior quarter’s reported figure.

Still, the first quarter is generally slow for loan originations, which together with the flattening of the yield curve (the difference between short- and long-term interest rates) likely hampered net interests of BofA. Also, fewer days in the trimester likely hurt NII.

The Zacks consensus estimate for NII on an FTE basis of $11.7 billion suggests a 1.8% increase on a sequential basis.

Management expects two headwinds – two days less interest accrual and fewer PPP fees – to hurt NII by $250 million in the first quarter. Nonetheless, NII will be “up about a few hundred million” sequentially.

Investment Banking (IB) Fees: After an astonishing performance for nearly two years, deal making came to a screeching halt in March. The ongoing conflict between Russia and Ukraine (causing instability in stock markets around the world) and ambiguity over the inflation-linked economic slowdown weighed on business confidence. Thus, the volume of transactions and the total value experienced a decline during the first quarter. Therefore, BofA’s advisory fees are likely to have been adversely affected.

Given the aforementioned concerns, equity market performance has been disappointing and as a result, subsequent IPOs and equity issuances have dried up. On the other hand, bond issues were probably correct. BAC underwriting fees (representing nearly 40% of total IB fees) are expected to have been hit in the March quarter.

Zacks’ consensus estimate for IB revenue of $1.83 billion indicates a 22% decline from the prior quarter level.

Expenses: Although the bank continues to digitize its operations, upgrade technology and expand into new markets by opening branches resulting in increased related costs, its past efforts to improve operational efficiency have likely resulted in manageable spending levels in the reportable quarter.

BAC expects high personnel costs of approximately $400 million and increased costs from seasonally higher sales and trading revenue.

Asset quality: Throughout 2021, BofA continued to release reserves it had taken to cover losses from the effects of the coronavirus pandemic. This has enormously supported the company’s profits. Now that the majority of the releases were made in the past year, the reserve releases are not expected to be much support for the company’s earnings in the quarter to report.

The Zacks consensus estimate for non-performing loans of $4.57 billion implies a sequential marginal increase.

What the Zacks Model Reveals

Our proven model does not predict an earnings beat for BofA this time around. That’s because he doesn’t have the right combination of two key ingredients – a positive ESP on wins and Zacks rank #3 (Hold) or better – to increase the chances of a beat beat.

You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

ESP Earnings: The earnings PSE for BofA is -0.39%.

Zack’s Ranking: BAC currently wears a Zacks Rank #3.

Bank of America Corporation course and surprise EPS

Bank of America Corporation course and surprise EPS

Bank of America Corporation price-eps-surprise | Quote from Bank of America Corporation

The Zacks consensus estimate for first-quarter earnings is pegged at 77 cents, which has seen a 1.3% downward revision in the past 30 days. Furthermore, the estimated figure suggests a 10.5% drop from the number reported a year ago.

The consensus sales estimate of $23.22 billion indicates an increase of 1.7%.

Banks worth a look

Here are a few bank stocks you might want to consider, as our model shows they have the right mix of elements to outperform this time around:

State Street STT is expected to release its first quarter 2022 results on April 14. The company, currently ranked 3 in Zacks, has an ESP on earnings of +0.80%. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

STT’s quarterly earnings estimates rose 2.8% over the past month.

Bancshares Trading CBSH is expected to report its first quarter 2022 results on April 19. The company currently holds a Zacks rank #2 (buy) and an ESP earnings of +2.33%.

CBSH’s earnings estimates for the quarter to report moved north 3.5% in the 30 days.

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Zacks Investment Research

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Second Circuit Separation Resolved: No PPP Loans for Bankrupt Debtors | Kelley Drye & Warren LLP https://startthechallenge.org/second-circuit-separation-resolved-no-ppp-loans-for-bankrupt-debtors-kelley-drye-warren-llp/ Tue, 12 Apr 2022 16:11:38 +0000 https://startthechallenge.org/second-circuit-separation-resolved-no-ppp-loans-for-bankrupt-debtors-kelley-drye-warren-llp/ In March, the United States Court of Appeals for the Second Circuit joined a growing majority of courts with Springfield Hospital, Inc. v. United States SBA Administratorbelieving that, however lenient its terms, a CARES Act Paycheck Protection Program (“PPP”) the loan is not protected by Section 525(a) of the Bankruptcy Code, which prohibits governmental units […]]]>

In March, the United States Court of Appeals for the Second Circuit joined a growing majority of courts with Springfield Hospital, Inc. v. United States SBA Administratorbelieving that, however lenient its terms, a CARES Act Paycheck Protection Program (“PPP”) the loan is not protected by Section 525(a) of the Bankruptcy Code, which prohibits governmental units from refusing, revoking, suspending or refusing to renew a license, permit, charter, franchise, or other similar grant to a debtor solely because of his quality of debtor within the meaning of the Bankruptcy Code. Specifically, the Second Circuit held that the PPP was not an “other like subsidy” protected under Section 525(a).

At the start of the COVID-19 pandemic, the majority of non-essential procedures and office visits at Springfield Hospital were canceled, postponed, or rescheduled due to stay-at-home orders that had an immediate impact and serious on cash flow. As a result, Springfield filed for Chapter 11 in June 2019 in the District of Vermont. To meet short-term operating obligations, Springfield applied for several state and federal emergency grants, including PPP loans that were denied because the hospital was a Chapter 11 debtor at the time of the application.

Claiming that the SBA’s administration of the PPP discriminated against Springfield and violated Section 525(a) of the Bankruptcy Code, Springfield filed a lawsuit in bankruptcy court seeking, among other things, an order restraining the SBA from denying the hospital’s PPP loan application on the basis that the applicant is a debtor in bankruptcy. The bankruptcy court ruled in Springfield’s favor, granting a temporary restraining order and then an order restraining the SBA from denying Springfield’s PPP loan application. Specifically, the bankruptcy court ruled that the Second Circuit line of business excluding credit extensions from protection under Section 525(a) had been struck down by Congress or subsequent Second Circuit rulings; and regardless, the PPP is an “other like grant” under section 525(a) in law. The bankruptcy court certified its decision for a direct appeal to the Second Circuit due to a division of powers resulting from a contrary ruling by the Western District of New York.

The Second Circuit, focused on the plain language of Section 525(a), overturned the bankruptcy court. After analyzing the definition of “grant”, the Second Circuit acknowledged that the PPP is a grant, but concluded that the words “other” and “like” in Section 525(a) narrow the scope of protected grants to those that are comparable to the other terms listed in the law – licenses, permits, charters and franchises. The Second Circuit further clarified that its previous precedent, which excluded a New York student loan guarantee program from Section 525(a) protections, had indeed been rescinded, but only for student loans, pursuant to an amendment to Section 525(a). In other words, Congress must expressly include certain types of loans within the scope of Section 525(a). The Second Circuit also disagreed with the bankruptcy court’s reliance on later Second Circuit jurisprudence that eligibility for a public housing lease was protected under Section 525(a). , because lending and leasing are “significantly different”. Finally, the court concluded that a PPP loan is a loan program despite its forgiveness mechanism because, among other things, PPP loans are evidenced by promissory notes, earn interest and can be deferred like traditional loans.

The Second Circuit said Section 525(a) is unambiguous and cannot be read broadly to protect every type of government subsidy. Even though the PPP ended on May 31, 2021, debtors should expect similar challenges to qualify for future government grant and loan programs without specific action from Congress.

[View source.]

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How do you identify your loans? https://startthechallenge.org/how-do-you-identify-your-loans/ Sat, 09 Apr 2022 19:31:16 +0000 https://startthechallenge.org/how-do-you-identify-your-loans/ I know a guy in Billerica who, like most people, got tired of making the monthly mortgage payments on his house for decades. But last week he emailed me some really good news, which might make his life easier. “My home loan decided to identify as a student loan,” he said. “Do you know what […]]]>

I know a guy in Billerica who, like most people, got tired of making the monthly mortgage payments on his house for decades.

But last week he emailed me some really good news, which might make his life easier.

“My home loan decided to identify as a student loan,” he said. “Do you know what that means? I won’t have to pay it again – ever!

This is wonderful news, and I predict that “transitioning” all debt into student loans will be the next big thing in the equity racket.

I mean, if a guy can suddenly “identify” as a woman, then why can’t an overdue invoice identify itself in a category where it never has to be paid?

Personally, after studying my recent rather large credit card statements, I’m starting to “prepare” my Visa bill to become a student loan – so I can claim “forbearance” and not experience any “accumulation” of student loan payments. interests.

Hey, what’s good for a Queer Studies major should also be good for a taxpayer with two jobs, right? Certainly, the equal protection clause of the 14th Amendment extends to debtors.

All bad payers are equal under bankruptcy law.

If these losers who owe over a trillion dollars in unpaid student loans don’t have to pay back the money they owe, why can’t an electrician tired of making payments on his F-150 just ” transfer” the payment on his pickup into a… student loan?

What he would then never have to repay.

Property taxes, lines of credit, condo fees, alimony, child support, library fines, anything – why can’t normal people request “bill reassignment surgery” and live big on arm, like an illegal alien or a Democrat?

In case you missed it, maybe because you worked 70 hours a week to pay your bills, last week Dementia Joe Biden again extended the so-called moratorium on federal student loan debt.

For those of you keeping score at home, this is the sixth time since March 2020 that deadbeats have taken advantage of this ongoing scam – twice under Trump and now four times under Brandon.

Such an agreement – no one is required to repay the principal of their loan and no interest accrues. The only ones who don’t benefit from Uncle Sam’s largesse are those roughly 300 million Americans who either didn’t go to college or paid their own way.

Incidentally, no one forced the academics concerned to assume these obligations. They could have joined the army, learned a trade or found a real job. Or just paid what they owed.

But no, they wanted to study… sustainability, third world slamming or wind power for dummies.

One thing we know for sure is that none of these college kids learned Latin, because otherwise they might have learned the meaning of that ancient phrase – Caveat emptor.

Buyer beware.

Taxpayer tab for student loan scam estimated at $100 billion so far. This latest document, which runs through August, will cost an additional $15-20 billion.

But it’s necessary for what the AOC calls “families de travail,” which in English stands for “non-working non-families.”

God knows they need that extra $400 a month they pocket on average – it at least pays for some of the tattoos, bling, weed and fortified wine they’ve been bingeing over for the last two years.

This latest welfare scam comes at a time when the unemployment rate for bachelor’s degree holders is 2%. Many of these deadbeats took advantage of all the other new handouts that proliferated during the panic — like eviction bans, PPPs, PUAs, bonus food stamps, extra child benefits, “unemployment” checks. » more generous, etc.

The fact is, for tens of millions of people in the slacker community, panic has been their finest hour.

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