Justin H. DeShaw serves as chief lending officer of Centreville Bank. He spoke with Providence Business News about the bank’s role and experience in the latest iteration of the Paycheck Protection Program. He has a bachelor’s degree from Dickinson College and a master’s degree in business from Boston University.
PBN: How does the latest round of PPP funding compare to last year? What new challenges, if any, have the amended requirements or submission process created for lenders?
DESHAW: If a business is applying for the first time, the requirements are not much different. For businesses that previously received a PPP loan and are applying for the new round of funding, the bar to qualify is now higher and the amount of information an applicant is required to submit is more substantial. Lenders are also required to perform more analysis and scrutiny of the applications this round. The flow of applications has been far less than the first round, which has made it more manageable from a resource allocation standpoint.
The SBA [Small Business Administration] is also utilizing a new system to facilitate application submissions that hasn’t had the latency issues we saw during the first round. For the most part, our staff have avoided having to submit applications after hours or on weekends this time around.
PBN: Among the new requirements for second-time borrowers is proof of 25% revenue loss from 2019 to 2020, which some businesses have said means they can’t qualify. Have you seen this requirement excluding otherwise eligible applicants at Centreville? Does it seem too restrictive?
DESHAW: I was initially concerned that it would be a problem, particularly for many of the small businesses that aren’t in the habit of producing quarterly financial statements, but that hasn’t been the case. While our staff [has] had to provide a certain amount of education to some small businesses on what would constitute acceptable proof of the loss in revenue, it has not proven to be a significant issue thus far.
In fact, very few businesses that applied for a second-draw PPP loan failed the 25% revenue reduction threshold. In most cases, we were able to educate the customer on the requirements during an initial screening conversation, which helped save time and prevented us from preparing an application that would likely be denied.
PBN: What lessons learned from PPP last year has Centreville implemented to help the process run more smoothly and efficiently?
DESHAW: The biggest lesson we learned was that we needed to dedicate even more customer-facing staff to PPP. The constant changes in guidance from the SBA made it critical to communicate with applicants frequently, and while we dedicated ample resources to handling and processing the applications, we ended up having to draft colleagues from our retail staff to help with customer outreach. For this round, we placed as much emphasis on customer-facing tasks as we did to reviewing, approving and submitting applications.
PBN: How is the bank looking to capture some of the increase in deposits from PPP borrowers after the program ends – i.e., keeping them on as permanent customers with accounts or loans?
DESHAW: Our priority is to facilitate an important government program at a time of severe economic distress for as many small and medium-sized businesses as possible in Rhode Island, Connecticut and elsewhere. While we hope that all businesses will consider Centreville Bank as a primary financial services partner, our plan is to simply remain committed to the local business community and provide the personalized, responsive service our customers have come to expect.
PBN: What long-term impacts will the PPP process have on the way Centreville courts borrowers or processes loan applications generally?
DESHAW: Despite the stress and rapidly changing rules, PPP provided us the opportunity to implement new and improved ways to process smaller loans. As Centreville expands to serve the Rhode Island, eastern Connecticut (through Putnam Bank) and Bristol County, Mass., business markets, we need to remain efficient while retaining the personal contact and relationship-banking model that is our foundation. PPP allowed us to experiment with technology, staffing and communication, and we’ll continue to leverage those improvements to better serve our customers now and in the future.
Nancy Lavin is a staff writer for PBN. Contact her at Lavin@PBN.com.
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