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Jerry Hadam stands inside his Saddletree Gallery in Ketchum. Hadam received a Paycheck Protection Program loan to cover payroll for himself and a part-time employee.

The Trump administration an-nounced Sunday that the second round of the Paycheck Protection Program, launched April 27, had distributed 2.2 million loans totaling $175.7 billion. According to CNN, the average loan amount was $79,000, indicating that smaller businesses are being better accommodated now than during round one.

That meant good news for Jerry Hadam, the owner/operator of Saddletree frame shop and art gallery in Ketchum. He closed the doors of his so-called “nonessential” business for five weeks due to the coronavirus. He reopened Friday, the first day that it was legal to do so.

Hadam, 58, had applied for unemployment and after many calls found out that he might not be eligible as a sole proprietor. He said a loan officer at First Interstate Bank called him last week to recommend a PPP application.

“Things weren’t dire yet, but it was all very disturbing,” said Hadam, a single parent of two daughters. “This is new territory for a very self-reliant person to navigate.”

His loan application was completed Thursday. On Monday, Hadam had money in the bank to cover his usual monthly payroll to himself and a part-time employee.

“It put a couple months modest wages into the bank,” he said.

When funding for the first round of PPP loans was exhausted in mid-April, 1.66 million loans totaling $342.3 billion had been disbursed, with an average loan size of $206,000.

To give smaller banks a fighting chance, on Wednesday the Small Business Administration allowed only institutions with assets under $1 billion to apply for PPP loans between 4 p.m. and midnight.

“Given that we are part of that smaller bank group, it freed up a lot of bandwidth,” said Idaho First Bank CEO Greg Lovell on Tuesday.

Round two is going smoother than Lovell expected, he told the Express. His bank employees were no longer pulling “all-nighters,” Lovell said, but that there still remains a lot of work to do.

“Last week we thought we would never top 300 wired funds in one day,” he said. “But on Monday we had 1,000”

On Tuesday, Hadam was back framing artwork. He said the loan, which he expects to be forgiven, provided some relief. It will pay for some needed things for his kids and buy new tires for his car. But he said he’s more grateful for the people who can once again walk through the doors of his business.

“My clients are golden,” he said.

Multiple news sources report that PPP loans funded by the federal CARES Act have been serviced more successfully across the nation by smaller banks. An article in Barron’s on Tuesday reported that 89 percent of commercial and industrial loans since April 1 have come from smaller U.S.-chartered commercial banks.

Citing new data from the Federal Re-serve, the article describes smaller banks as those with less assets than the top 25 banks in the country.

“For perspective, smaller banks held only a third of all U.S. commercial and industrial loans before the coronavirus outbreak,” Barron’s reported.

Two banks with branches in the Wood River Valley are among the top five largest in assets—Bank of America with $2.38 trillion and Wells Fargo with $1.89 trillion. By comparison, First Interstate Bank, where Hadam went, has reported assets of $14.5 million.

The SBA reported Tuesday that 12,411 PPP loans were made in Idaho, totaling $719,804,044.

Trent Wright, president and CEO of the Idaho Bankers Association, said Friday that he did not have a tally of which banks are processing the highest amount of successful PPP loans in Blaine County.

Nationwide, U.S. banks reaped $10 billion in fees from processing PPP loans during the first round, according to an NPR report. Banks were incentivized to make the two-year loans with 1 percent interest by using a sliding fee scale. Loans worth less than $350,000 brought in 5 percent in fees while loans worth more than $350,000 brought 3 percent. Loans from $2 million to $10 million brought in 1 percent in fees.

Lovell said it’s the same expense to do a loan of any size. He also said that there would be a lot more loan processing work and expenses moving forward, which would be covered by the fees. As the pandemic continues to rattle the economy, many of those costs are still unknown.

“Every banker I know is putting additional loan fee income into loan loss reserves,” Lovell said. Those reserves would be used by banks to cover people who can’t repay bank loans during an uncertain future.

Anecdotally, thousands of valley residents or their employers have applied for PPP loan assistance since the COVID-19 pandemic shut down businesses and kept people indoors. Based on social media posts, some have been luckier than others.

Amy Harris, 58, is a certified public accountant and co-owner of Despo’s Mexican Food in Ketchum. She successfully applied for PPP loan from Idaho First Bank during the first round.

“The loan will help Despo’s navigate these unprecedented times,” said Harris, who then went to work assisting about 20 of her accounting clients and friends apply for loans at several banks. She helped builders, grocery store workers, hairdressers, paint contractors, massage therapists, nonprofits, a private school and an acupuncturist.

“I hardly slept for the last month since this all went down,” she said. “But it was the only thing to do. Every single loan was approved. It was a time to dig deeper and be the kindest you could be. It has been a sad and heartbreaking time for so many. I’m grateful for all the banks.”

Harris said she thinks the SBA loans are helping people who need it the most.

“I feel like our taxpayer money is being used in a good way for the little guy,” she said. “In the 2008 bailout you saw a lot of big businesses and banks bailed out. This time small businesses got the stimulus as well, and the part-time people and self-employed people too. It’s going to be instrumental in helping our small community pull out of this.”

Many local nonprofit organizations also applied for PPP loans. Those that were successful include the Sun Valley Ski Education Foundation and Swiftsure Ranch Therapeutic Equestrian Center.

“It’s a been a lifesaver,” said Paul Bennett, executive director of the Swiftsure Ranch. He said the loan, secured through Mason Frederickson at D.L. Evans Bank, will support for Swiftsure’s staff of 11 people for two months. Together, they work with volunteers to serve 400 people each year with a budget of just under $1 million.

“We are incredibly grateful,” Bennett said. “The coronavirus forced us to shutter the place and stop performing our mission. Since we had postponed our major fundraiser, this will allow us to continue.”

Bennett said he and his staff are “working feverishly” to secure grants to sustain the organization for the rest of the year, as well as to develop coronavirus safety protocols.

“Because of what we do, we need to be in close contact with some of our participants,” he said. “But we may be able to open by May first.”

Email the writer: tevans@mtexpress.com

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