With a third round of the Small Business Administration (SBA) Paycheck Protection Program (PPP) funding officially on its way, many lenders are wondering, “How can we participate and support our business customers?” The window of opportunity is small and the loan structures unconventional, but there’s no question that small businesses are in dire need of support.

For lenders facing these questions, one credit union in the Pacific Northwest may have an answer.

To participate, or not to participate

The call to buy holiday gifts from small, family-owned businesses this year is no coincidence, as Main Streets across the country have dealt with Covid-19 and small business owners have gone great lengths to keep their doors open safely. From managing overhead and inventory to ongoing shutdowns and employee security, the pandemic has posed significant financial challenges for the businesses that shape our communities—our neighbors, friends, and families.

PPP funding has kept hundreds of thousands of businesses afloat, but with limited funds and many community FIs lacking the infrastructure to process loan applications quickly enough, it hasn’t always been an easy process—causing many community banks and credit unions to shy away from the task.

But for those financial institutions who have dived in, PPP has provided a unique opportunity to serve their communities, attract new businesses, and serve their missions at the highest level.

Switching gears to support communities

OnPoint Community Credit Union took the opportunity to step up for small businesses in Oregon and the South Washington area when the PPP was initially introduced. Seeing the value in a time of crisis, OnPoint signed up to be an SBA lender and participate in the PPP program to better support members in their moment of need. During the first round of PPP funding, they took a manual, "all-hands-on-deck” approach, but quickly learned that changing SBA guidelines and manual processes significantly limited their application and processing capacity. While thousands of Oregon businesses needed PPP support, there was simply not enough time in the day for OnPoint’s team to process the influx of applications from their membership. To reach the highest volume of businesses possible and deliver a better member experience during a crucial time, they knew they had to make a change—and fast.

To do this, OnPoint partnered with Q2 to deploy an end-to-end PPP solution, a fully digital system that simplifies PPP application management and fulfillment, and automates SBA eligibility and submission.

A hero in a harrowing time

In time for the second round of funding, OnPoint was up and running with a new system in just four days. By the following Monday, they rapidly delivered funds to members who didn’t receive relief during the first window and began originating new applications for other members in need. OnPoint was able to fund 2,300 loans in the second round of PPP, including a big push for minority-owned businesses. This landed them in the top 10 Oregon PPP lenders and seventh for credit unions nationally. They were even recognized by the Oregon Governor’s Office for their extraordinary efforts to support local businesses and communities.

Chief Credit Officer Steve Leugers told Q2, “To go from not being an SBA lender to being ranked seventh in the nation for PPP origination was an incredible success, but what matters most is that we were able to deliver a much better experience for our members.”

A symbol of success

The impact that OnPoint has had by participating in PPP has been significant for the extended Oregon community. The story of Huber’s Café, the oldest restaurant in Portland and a beloved holiday tradition, shows what a difference the swift administration of PPP funds can make.

After a tumultuous several months of business, the owners weren’t sure if they could continue weathering the storm and considered forgoing their lease and shutting their doors. The PPP funding they received from OnPoint changed their trajectory just in time, allowing them to stay in business and serve as a great example of what OnPoint has set out to do by jumping into the PPP opportunity with both feet.

“My local OnPoint branch connected me to the right person, and once I got everything together, funding was very quick,” said David Louie, co-owner of Huber’s Café who has run the business with his brother since 1974. “It would be nice to keep the restaurant going.”

Food for thought

When reflecting on what’s next for OnPoint, Brad Volchok, commercial lending manager, said, “Relative to our size, our commercial portfolio is a part of our overall offerings, and the PPP program has increased overall awareness to our members and the communities we serve that we are serious about supporting businesses.”

In a closing consideration for other community FIs, Steve Leugers added, “This is probably the most important time that you can be there to serve your communities as a lending institution. It’s truly a defining moment for conveying the value of credit unions. We want to support our members and show our communities that we’re the lender that’s here in the most difficult time. So many partners have said that they don’t want to do the next round, but for us it’s not a choice. This is saving local businesses. If you want to be defined as a community institution, you have to step up.”

Throughout this process, OnPoint’s members entrusted them to handle their PPP funds and have gotten to know them as more than just their daily financial institution. OnPoint plans to leverage these relationships to expand their commercial footprint and reach beyond their traditional offerings. Because of their grit in working through the challenges of becoming an SBA lender and administering PPP loans, they’re doing what they do best on an even larger scale—putting their members first.

With a third round of PPP funding on its way, lenders should consider whether a digital PPP solution can help them begin or amplify their participation. OnPoint said it best, “We’ve been able to help the people and businesses that really need it the most. That’s the credit union philosophy – people helping people.”

For more information on Q2’s PPP solution, visit https://learn.Q2.com/ppp.


Written by Q2