As we race toward the end of July and get closer to the extended, August 8 Paycheck Protection Program origination deadline, many are looking toward forgiveness and—more importantly—the new normal that lies ahead.
Doing so successfully will require a sound understanding of how business customers are feeling coming out of this industry-defining moment and how lenders can best serve their needs moving forward.
To get at that data, we invited Barlow Research Associates’ Digital Banking Director Youa Yang to our Weekly Q&A Session on Tuesday, July 21, to share recently collected Voice of Customer data on the Paycheck Protection Program.
For 40 years, Barlow has been dedicated to providing in-depth B2B market research for the financial services sector. While the data below is indeed powerful for lenders who participated in PPP, it’s just a small sliver of what the research organization is able to provide to financial institutions.
With that said, here are 10 quick takeaways from our “Voice of the PPP Customer” Webinar that you won’t want to miss:
- The overwhelming majority of SMBs obtained a PPP loan from their primary lender. With 73 percent of small businesses ($100K-<$10MM in annual sales) and 74 percent of medium businesses ($10MM-<$500MM in annual sales) sticking with their primary lender, it’s clear who customers are turning to in times of crisis.
- Businesses were typically more satisfied with the PPP experience they got from small- and medium-sized lenders. While approximately 77 percent of businesses were very satisfied with how smaller institutions handled PPP, that number drops by about 20 points for large banks.
- Only about 25 percent of businesses reported missteps in their PPP loan process. Those businesses put equal blame on their financial institution as well as the PPP for their difficulties with the program.
- On average, businesses have exhausted 80 percent of their PPP loans. While it’s been hard to gauge when the Forgiveness rush will start, this is a pretty good indication that it is on the near horizon.
- Small businesses are the most eager for forgiveness, with bigger businesses in less of a rush to get their applications into their lenders. While 46 percent of small businesses say they are currently in the process of seeking forgiveness or ready to apply for forgiveness as soon as an application is available—only about 29 percent of middle market businesses are in the same boat.
- A lack of information and available process is holding customers back. But customers tell Barlow Research Associates that they’re hungry for information on PPP forgiveness from their financial institution.
- Businesses are turning to trusted financial partners for help on PPP Forgiveness. When asked who they’d rely on to help them secure PPP Forgiveness, the financial institution that originated the PPP loan far outpaces accountants, internal employees, the SBA, and more.
- The Paycheck Protection Program won’t be enough to save many businesses. In fact, more than 40 percent of businesses say they'll need assistance beyond PPP with many hoping to get information about future government assistance from their financial institutions.
- A full third of small businesses said their interactions with banks would be impacted by COVID-19. Coping with this reality, according to these respondents, will require fewer branch visits, more remote interaction, and an increased usage of digital.
- Nearly half of businesses that used a non-primary PPP lender said they’ll be moving some or all of their deposits to the new lender. Further, the forgiveness phase is a signature moment that could build or decrease bank loyalty.
Watch the webinar replay at the top of this story for more in-depth insights and analysis from Youa, and visit the Barlow Research Associates’ website to learn more about how they can help your institution better understand your markets in this new normal.
For more helpful content on PPP and beyond from Numerated, join our Weekly Q&A Sessions and Platform Demos on Tuesdays and Fridays, respectively. Save your seat today.