• Article Image Alt Text
    Employees at First United Bank in Fredericksburg, including Taylor Ward, left, assistant vice president and community loan officer, and Brad Hardin, community bank president, have been working hard the past few weeks to process loans that are focused on helping small businesses apply for loans through the Small Business Administration. Loans are designed to help businesses pay employees and receive funds for rent, utilities and more. — Submitted photo
  • Article Image Alt Text
    The staff at Security State Bank & Trust has issued over 108 loans totaling over $11 million. Pictured front row, from left, Susan Behrends, Cindy Harrison, Donna Morin, Heather Langehennig and Bill Cowden. Back row, Dan Kemp, Katie Ranny, Cindy Williams, Gary Stehling, Dale Geistweidt and Katherine Lenz. — Submitted photo

Funding funnel

Community banks work overtime to offer small businesses a lifeline

Almost every business in Gillespie County is considered a small business, employing 500 people or less.

With the current state of the economy and the COVID-19 pandemic, many businesses are having to lay off or furlough workers and find ways to function as funds run dry.

The Small Business Administration released several resources and loan programs within the past few weeks to aid in this relief.

The Fredericksburg Chamber of Commerce recently released a survey to its nearly 900 members, asking which loan program they participated in.

Out of 194 responses on Monday, 110 businesses applied for or had received the Paycheck Protection Program loan and 64 indicated participation in the Small Business Administration Economic Injury Disaster Loan program, nine had applied for the Employee Retention Tax Credit, eight had applied for the SBA Bridge Loan and five had reported establishing a new line of credit or expanding an existing line.


The loans

According to the Associated Press, the Small Business Administration said Thursday, April 16, that it had reached its $349 billion lending limit, after approving around 1.7 million loans.

The SBA said that the number of loans is more than 30 times what the SBA processes in one year.

Loans are based on a company’s payroll, offering owners forgiveness if they retain workers or rehire those who have been laid off.

Loans can be forgiven if the guidelines are followed for how the funds are being used.

While they wait, owners who are shut down or who have lost revenue continue to be uneasy about the impact of the virus.

“This program is important as it focuses on small businesses, specifically keeping their employees paid and paying other expenses such as rent, utilities and interest expenses,” said Brad Hardin, First United Bank community bank president. 

Locally, there are about five vendors in Gillespie County working to administer SBA loans and programs.

“We knew our customers and the community at large would need our assistance,” Dan Kemp, senior vice president of Security State Bank & Trust said. “There wasn’t much discussion about if we were, instead we discussed how we were going to handle the volume. It was the right thing to do.”

Kemp also said the SBA will guarantee a percentage of the loan to the bank so the bank can make the loan.

Loan applications take a few minutes to complete and banks have 10 calendar days to fund the loans after they have been approved.


First United Bank

First United Bank was one of the first banks in the U.S. to begin supporting small businesses, a news release stated.

Through the online application, the Central Texas region has received over $130 million in loan requests, serving over 1,180 small businesses.

In Fredericksburg, the bank has been responsible for approving 140 loans, totaling nearly $10 million, Hardin said.

In total, First United has OK’d $600 million in loan requests, supporting 5,500 business owners throughout their markets in Oklahoma and Texas.

Those applying are asked to set up an account at the bank or use an existing account at First United.

“First United wanted to put our purpose and values into practice and to have significant impact on the communities we serve,” Hardin said. “The shutdown of the economy has been devastating to the business community and we felt obligated to use all of our resources possible to help as many businesses as we can and their employees through this difficult time.”

Because of the major increase in loan applications, Hardin and his team have been working diligently to get applications completed and funds allocated.

“There were a lot of long hours for many people in the bank and many phone calls and emails,” Hardin said.

In addition to small business loans, First United has also implemented ways to support existing customers.

The bank is offering a 90-day loan deferral program, supporting mortgage payment workouts/deferrals, providing free telephone financial well-being coaching, increased ATM limits and operating full-service drive-thrus.

“I am incredibly proud of our high-performing employees,” First United Bank CEO Greg Massey said. “They are working days, nights and weekends to empower small businesses and consumer customers. Through their dedication, our communities will thrive on the other side of this pandemic.”


Security State Bank & Trust

Like First United, the team at Security State Bank & Trust has been actively working to help small businesses get the funds they need.

The Fredericksburg branch has helped 108 businesses get more than $11.8 million. In 16 locations in the Hill Country, Security State Bank & Trust has helped 487 businesses, totaling over $50 million.

Bank staff has worked late nights and weekends, tending to customers’ needs.

“We have fielded countless calls, trying to answer questions with limited information provided to us,” Kemp said.

Locally, the bank employs nearly 100 people with another 200 across the other branches.

“Our team knew the significance of the situation and without exception, they rose to the occasion to accomplish this feat,” Kemp said.

In a normal month, Kemp said that the bank approves and funds around 300 loans, so 487 in two weeks was a challenge.

The bank will continue to offer traditional SBA loans and will accept applications for PPP loans.


Local impact

With almost every business in the county defined as a small business, owners have had to scramble to keep their doors open.

Sophie Lochte, of Sophie’s Choice Bakery, who employs 10 people, decided to apply for the Paycheck Protection Program. 

Lochte would also see a major decrease in orders as events have been canceled for the remainder of April and most of May. During this time, Lochte normally makes cakes and other desserts for 20-30 weddings, plus birthday celebrations and graduations.

“We decided to go with the Paycheck Protection Program so we could get our employees money during our down time,” Lochte said.

Lochte utilized her existing relationship with First United Bank to apply for the loan and get questions answered.

“First United Bank was very helpful in implementing the process,” Lochte said. “It took about two weeks to fund and our employees have been quite grateful.”

While Lochte sees this as a great short-term solution, she says only time will tell how and when large gatherings will be allowed.

“We don’t really know what the future of large gatherings will be. We will just have to wait and see,” she said.

“Hopefully this will help businesses keep their teams intact so they are ready to go and operate efficiently when that time comes,” Hardin said. “For many, they are not just employees but are considered like family.”



While these loans should help businesses in the short-term, long-term effects of the virus on the economy are not yet known.

“These are unprecedented times and it will take the whole community coming together,” Kemp said.

Last week, the City of Fredericksburg reported that several businesses will not reopen. Hardin said no one is able to accurately predict how the economy will be impacted.

“Unfortunately, some businesses will not be able to survive this unprecedented event. However, small business owners by definition are resilient and resourceful, so I am confident most will find a way to persevere and prosper,” he said. 

Nationally, funds have run out, and Congress has yet to issue additional funds as of press time.

“Congress is considering another round of funding that could be approved this week, including as much as another $300 billion for the Paycheck Protection Program,” Fredericksburg Chamber of Commerce President and CEO Penny McBride said.

“We knew the funds would run out but we wanted to make sure applicants received their share,” Kemp said.

McBride said the Chamber is monitoring this carefully so that they can quickly notify members and provide support information.

“The Chamber encourages eligible businesses that have not yet applied to gather the needed documentation and begin the process to be ready when Congress acts,” McBride said.

Locally, Hardin said that the bank faced a lot of uncertainty as to how the process worked, requirements for the loan and the timeline.

“Some of the biggest challenges involved a lack of detailed information to help customers complete applications for the bank to process them,” Hardin said. “New processes and systems had to be set up in a matter of days to deal with the huge volume of applications.”

“The program was put together quickly and information was slowly given to banks,” Kemp said.


Helpful resources

Local banks, the Chamber and other organizations are working diligently to provide the latest and best information for the community.

Hardin recommends businesses look to their accountant or tax advisor for guidance as the process can be challenging to navigate.

“I have been extremely impressed with local accounting professionals and their hard work to learn about the programs so they can advise clients,” Hardin said.

The Small Business Administration has more resources available at sba.gov.

Fredericksburg Standard

P.O. Box 1639
Fredericksburg, TX 78624-4228