Customers Bank (NYSE:CUBI) has processed loan applications
totaling more than $200 million to help save American businesses
and is expanding its capacity to process loans under the federal
Paycheck Protection Program (PPP).
When the national disaster was announced on March 13, Customers
Bank pledged to put $200 million to work restoring the American
economy. In just the past four days, the bank met that goal.
PPP is chief among the tools used by the Bank’s SBA Government
Guaranteed Lending and Small Business teams to get capital flowing
in the economy. In just one week, the bank has accepted 500
applications, processing 300 of them so far for submittal to the
Small Business Administration. These PPP loans make up the lion’s
share of disaster lending to date.
“We are proud to be playing a role in the recovery of the
American economy,” said Jay Sidhu, Executive Chairman of Customers
Bank. “Our team members have been working around the clock to get
these loan applications processed. We know small business needs
help and we will deliver for them using OakNorth’s solution to
support them from application throughout the entire forgiveness
journey.”
PPP is the hallmark of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act adopted by Congress and signed into law by
President Trump on Friday, March 27 with the express purpose of
helping Americans and the organizations that employ them weather
the COVID-19 pandemic.
In the ensuing weeks, demand for the loans has been overwhelming
creating capacity issues for many banks. Customers Bank Chief
Operating Officer Sam Sidhu worked to apply technology to open
bottlenecks. “We are pleased to be partnering with British fintech
OakNorth to apply advanced software strategies and algorithms to
create a smooth online application process that uses big data to
help us speed underwriting while reducing risk,” said Sam Sidhu.
“OakNorth was able to get the solution up and running within 72
hours from our first conversation, so we will have an integrated
online application system deployed by Monday.”
Customers Bank is one of the top regional banks for SBA
government guaranteed lending and is leveraging that expertise to
serve clients across the USA, reported President & CEO Richard
A. Ehst. “We want businesses throughout the nation to know we are
available to help them navigate the complexities of the SBA loan
process.”
The PPP provides financial assistance in the form of a “loan” of
up to $10 million, but large portions of the “loans” will be
forgiven if payroll is maintained during the crisis or restored by
June 30, 2020.
Eligible businesses can apply for an amount up to 250% of
average monthly payroll, subject to some limitations.
The loan funding can be used to meet payroll, buy health
benefits, pay rent and utilities, or pay the interest on a mortgage
or qualifying debt.
“PPP is very attractive, and every American business should use
these loans to keep their team members working and with health
benefits,” said Jay Sidhu.
PPP is broadly inclusive. Applicants can be C-corps, S-corps,
Limited Liability Company, Partnerships, Limited Liability
Partnerships, Sole Proprietorships, or Independent Contractors.
Non-profit organizations are eligible.
The most important eligibility criterion is that the applicant
has fewer than 500 total employees. Special consideration for the
hard-hit accommodations and food service industries.
According to SBA guidance, no collateral or personal guarantees
required. The forgiven loan amount will not be considered as income
and will not be taxed.
To earn forgiveness, a borrower must be able to document that
funds were used appropriately. According to guidance from the SBA
and US Treasury, funds used to meet payroll and buy benefits are
likely to be entirely forgiven, but forgiveness on funds used for
rent, utility or debt is likely to be capped at 25% of the total
loan.
There are no loan payments for six months. The unforgiven loan
amount is amortized over the remaining 18 months at 1.0% interest.
The borrower does not pay a loan origination fee.
“Our software solution coupled with our topflight and highly
experienced small business lenders will make the difference,”
commented Ehst. “We want to complete at least 500 more PPP loans
and get Americans back to work.”
Customers Bank and OakNorth announced a technology partnership
earlier this week: more.
For more information, see:
https://www.customersbank.com/disaster./
About Customers Bank
Customers Bank, a subsidiary of Customers Bancorp, Inc. is a
bank holding company, is a full-service bank with assets of
approximately $11.5 billion at December 31, 2019. A member of the
Federal Reserve System with deposits insured by the Federal Deposit
Insurance Corporation, Customers Bank is an equal opportunity
lender that provides a range of banking and lending services to
small and medium-sized businesses, professionals, individuals and
families. Services and products are available wherever permitted by
law through mobile-first apps, online portals, and a network of
offices and branches. Customers Bancorp, Inc.’s voting common
shares are listed on the New York Stock Exchange under the symbol
CUBI. Additional information can be found on the company’s website,
www.customersbank.com.
About OakNorth
OakNorth is the next-generation credit analysis and monitoring
Platform which enables banks around the world to more effectively
address the financing needs of the Missing Middle – the growth
business who are the backbones of communities and economies
globally but who have been in banking’s blind spot for decades.
The Platform leverages machine learning, decades of credit
expertise and massive data sets (including unconventional and
previously unavailable data) to model a forward-looking view of a
borrower’s financial situation, that’s informed by industry
benchmarks, macroeconomic drivers, and scenario analysis specific
to that business. It currently has over $17bn of assets under
service.
What this means for OakNorth’s commercial banking clients:
- The way borrowing should be – loans that are customised
for the borrower’s individual needs and completed in days or weeks
vs months, leading to accelerated revenue and business growth
- More attractive economics & scaled growth –
origination and credit teams who can transact several times more
deals per year
- Insight and foresight without the noise – larger data
sets and deeper analysis enable more informed credit decisions and
proactive portfolio monitoring delivers better credit outcomes
Since its inception, OakNorth has secured over $1bn from leading
investors, including: Clermont Group, Coltrane, EDBI of Singapore,
GIC, Indiabulls, NIBC, Toscafund, and SoftBank.
Rishi Khosla and Joel Perlman founded OakNorth in 2015 to
address the challenges they faced in securing debt finance from
high street banks for their previous business, Copal Amba (which
scaled to c.3,000 employees and was acquired by Moody’s Corporation
in 2014).
Visit oaknorth.com for more information.
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version on businesswire.com: https://www.businesswire.com/news/home/20200410005160/en/
Jay Sidhu, Executive Chairman 610-935-8693 Sam Sidhu,
Vice Chairman & Chief Operating Officer 610 780 6021
Customers Bancorp (NYSE:CUBI)
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