For the second time in as many years, a federal program is providing a lifeline for many businesses, including in the tri-state area, struggling amid the COVID-19 pandemic.

Federal lawmakers last month approved another stimulus package aimed at propping up the ailing American economy. The second round of the Paycheck Protection Program was opened to applicants in mid-January, and leaders in the local financial industry are seeing high levels of demand for the assistance.

While the financial support trickles down from federal sources, financial institutions such as banks and credit unions are tasked with processing applications and dispersing funds.

Tut Fuller, president and CEO at Dubuque Bank & Trust, said businesses wasted little time applying for assistance. He explained that the parent company of DB&T, Heartland Financial USA, established an online portal through which companies could apply for funds.

“Within the first 12 hours of the portal being opened, (Heartland) received 1,000 applications,” Fuller said.

The second round of PPP funding allows applications from companies that did not receive funding last year as well as companies that already received a “first draw” loan and spent the full amount on authorized uses. Those seeking a second-round of PPP dollars — known as the second-draw — must have no more than 300 employees and be able to demonstrate a 25% reduction in gross receipts between comparable quarters in 2019 and 2020, according to the SBA website.

The SBA requires companies receiving funds to maintain employee and compensation levels.

Loren Rice, an associate professor of accounting and business at Clarke University, believes the program is largely accomplishing its goal of strengthening the economy. He said the unemployment rate could have gone up 50% if not for the second round of funding.

And by keeping people employed, rather than relying only on issuing government checks directly to individuals, the program is giving Americans a sense of dignity and purpose, he said.

“I think it is definitely keeping people in jobs that would have disappeared otherwise,” he said. “People in general prefer to work rather than just having a check show up. Work is about more than just the paycheck.”

As the second round of the PPP gets into full swing, many in the financial industry are quick to note that the sense of chaos that defined the initial round is no longer in place.

In 2020, many companies were competing to “be the first in line” because they feared funds for the program would run out quickly, recalled Wayne Breckon, first vice president and regional credit officer at MidWestOne Bank in Dubuque.

Financial institutions realized this sense of urgency and worked around-the-clock to help clients submit applications.

“What the bankers did was basically say, ‘Our clients need us, and we will do whatever it takes to get these applications in and make sure they are complete, so they don’t get kicked off to the side,’” Breckon said. “It was a big effort industry-wide. There were people working 60, 70, 80 hours per week for several weeks on end.”

This time there is a greater sense of calm and familiarity surrounding the program.

Fuller, of DB&T, recalled that many companies believed the program was “too good to be true” the first time. There is not as much skepticism now.

“There is a higher level of trust in the government and a higher level of understanding of the program,” he said. “And people are willing and ready to go out and seek assistance.”

Financial institutions have refined their processes.

Dubuque Bank & Trust and MidWestOne have rolled out new technologies and tools to help customers navigate the PPP process in 2021.

John Kimball, senior vice president and manager of SBA lending for MidWestOne, thinks the implementation of new technology will be among the lasting legacies of the PPP.

“For some banks, this was the first time dipping their toes into financial technology,” Kimball said. “Through this, we have really seen the power of technology to help bankers deliver in a personal manner. I think this experience is going to create a sea change in the industry.”

For the time being, economists hope the second round of PPP will keep businesses open and people employed.

Rice, of Clarke University, cautioned that the economy is still a long way from returning to a sense of normalcy.

“Once vaccinations get in people’s arms, then a lot of the limitations that exist should go away,” said Rice, noting that it will be months before most Americans are vaccinated.