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New COVID-19 relief loans now open. Restaurants, retail expected to lead demand.

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The team at Ratio in Elgin sets up an outdoor heater. Small-business owners will be seeking more funds from forgivable federal loans as COVID-19 continues to impact the state's economy. File/John A. Carlos II/Special to the Post and Courier

COLUMBIA — The Bank of South Carolina is compiling a list of small-business owners calling in asking about more funds from forgivable federal loans as COVID-19 continues to pummel large swaths of the Palmetto State's economy. 

With a list about 30 customers long so far, roughly half are repeat applicants, said CEO Fleetwood Hassell.

Others are business owners who missed out on the first two rounds of funding rolled out by the U.S. Small Business Administration as part of the $500 billion Paycheck Protection Program.

Of those hoping for a second loan in this next iteration of the program, the hospitality and retail industry are expected to be first in line, bank leaders say.

"Those (industries) have been absolutely crushed by this terrible thing," Hassell said. "We're glad it will be there for them. We’ll get the green light here soon."

The program is attempting to support small business by providing funding to cover 10 weeks' worth of payroll to prevent layoffs.

Restaurants will be eligible for up to 15 weeks' worth of payroll to try to get them through the winter season. Those who meet spending requirements can apply to turn those loans into grants.

Meanwhile, South Carolina's hospitality workforce is down by roughly 15 percent, Joey Von Nessen, a research economist at University of South Carolina’s Darla Moore School of Business, told The Post and Courier last month.

The same is true nationwide. Food service jobs were down 372,000 across the country in December, according to the latest federal jobs report.

After a rough start, plagued with unclear rules and uneven access to funds that funneled money to big business rather than those that needed it most, the Paycheck Protection Program has been revamped.  

The application portal reopened today to first-time borrowers at smaller community banks and credit unions. Repeat borrowers can apply beginning Jan. 13, the SBA announced Friday.

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The latest federal relief legislation provides $284 billion for the program, which will be combined with $140 billion left over from previous rounds.

According to the SBA, there will also be more reporting this time around, with hard numbers required up front rather than verified after the fact.

Applicants must show a 25 percent drop in revenue over an entire quarter last year and loans are capped at $2 million rather than the previous $10 million. And businesses can have no more than 300 employees to qualify. Publicly traded companies or those backed by private equity are barred.

"Some of the rules will change," Hassell said. "That’s why we’re standing by to make sure, on day one, we can get into the (application) portal."

Hassell predicts those working in industries that have weathered the pandemic — construction, car and boat dealerships, real estate — won't be back to apply for a second loan in this round.

"Last time, no one really knew what was going to happen," he said. "There were some who took loans and may not have needed them. Now that it's more understood, they may not need to go back to the well."

Hassell also doesn't expect a rush on banks like the one experienced during the first round of funding, which had his bankers working in shifts and staying up half the night processing loans.

To date, The Bank of South Carolina has made $37 million in PPP loans, averaging $50,000 to $75,000. Of those, 25 percent have applied for forgiveness so far, Hassell said.

At Optus Bank in Columbia, the demand expectation is high.

"We continue to get inquiries daily from existing and new potential customers," CEO Dom Mjartan said . "We are already increasing our resources so that we can help more businesses."

The small African American-owned bank has played an outsized role in distributing federal coronavirus aid to small businesses as it was built to serve those minority populations with less banking access. That focus has landed it two high-profile partnerships with PayPal and Bank of America upping deposits with the Midlands lender.

Optus has made 511 Paycheck Protection Program loans to date, totaling more than $40 million. The majority of the loans went to minority-owned businesses, with most of them in the $20,000 range.

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