This is the second of our “Remain Calm” livestream series, hosted by our very own Daniella Squicquero.
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This session, I’m joined by my friend, the knowledgeable and wonderfully genuine Mark Cutler, Assistant Vice President and Branch Leader of Truist Bank (formerly BB&T) in Beaufort, SC. We talk insights and updates on the financial market, and you’ll get the inside scoop from an industry pro on some hot button issues: SBA, the Paycheck Protection Program (PPP), and more.
During this time of uncertainty, I hope you’ll find value in the words and insights of several awesome pros in various industries. Thanks for watching! If you prefer to read the text, you can find it in full below.
Cheers,
Daniella
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INTRO
Daniella Squicquero:
[Quick overview of last session.].
DS:
Today we have a special guest, Mr. Mark Cutler. He is the Assistant Vice President and Branch Leader of the BB&T — now Truist — here in Beaufort and this area. Is that right, Mark? Did I get that correct?
Mark Cutler:
You got it. Perfect.
DS:
See that? All right. I can still wing it. I still got it. Even if I’m in my living room all day, every day. Anyway — Mark is here today and he’s really going to give us an overview and an idea of what’s happening from his side of the industry, and the financial market and what he’s been seeing.
Over the course of the last several days and weeks, he’s been getting updates as far as all these SBA things and the Paycheck Protection Program (PPP) and things like that. So we will go over all of that today, and we will also take questions. If you have any questions, put them in the comments and towards the end we’ll go ahead and address any of those that come through.
SBA AND PPP
So guys, thank you for being here. Mark, let’s just start with what you’ve been seeing. Let’s start with the SBA. I know that’s a lot of what’s on people’s minds, that Small Business Association and what they’re doing as far as relief or assistance or what have you. And then of course, the efforts to streamline that, because there’s a lot of misinformation. So just tell us what you’re thinking on that, what you’re seeing.
MC:
Sure. And I appreciate the opportunity to be on and talk to your guests today. It’s quite an honor, so I appreciate that. So I’ll tell you about these SBA loans. There’s two particular products that seem to be very, very popular these days. One is the Disaster Relief Program, which will help small business clients continue to operate with utilities and so forth, keeping their day to day operations running. That is a loan actually directly through SBA.
And then the ever so popular PPP, which is an acronym for Payroll Protection Program, is the one that everyone is seeking for now. [That’s] for many reasons obviously, but the main reason is to be able to continue to pay their salaries for their employees who trusted their lives with, and to work for a company.
MC:
And who would have ever thought, you know, a month ago or two months ago, we would be where we are today.
DS:
That’s a tough position for all of us.
MC:
Yes. I mean, I get to see it firsthand, dealing with the financial sector. But back to your question on the payroll protection, it’s a really big program right now. It was a mad dash. It was supposed to be implemented last Friday, and as of Saturday morning, Truist and many other banks were still receiving direction from SBA on how to underwrite these loans, how to process these loans. There were a lot of details that came out early, early Saturday. So literally there’s been, you know, 24/7 work from the SBA, and then the participating financial institutions to implement this program… really at a snap of a finger. Between Saturday and today, we have received over 80,000, right at 80,000 loan requests.
MC:
I won’t say loan. Really, it’s a grant, because it can be forgiven if you use it correctly. We’ve received approximately 80,000 request just as the Truist system in the last three or four days. So as you can tell and you probably know, I have been extremely, extremely busy starting the initial underwriting processes of my segment of those loans. It will be a long two weeks. Hopefully, if I can give any suggestions to any of the small business just from my personal experience over the last really 24 to 48 hours with these loans: If you are in need of this particular loan, you must apply directly through your bank. If it’s a participating bank. Now every bank has given various guidelines on what is required to be eligible for that particular… we’ll call it for the sake of our conversation, a grant, because hopefully it will be forgiven.
MC:
Every bank has a little different qualifications, and if you are involved with a business relationship with that bank. What most banks are qualifying as business relationship is either a loan or a deposit account; a business checking account or savings account at that institution. If they are not a participating bank, there’s not a list that I’ve found out there that would [include] banks that do not require a deposit relationship with them. If that list were to ever come out, I don’t know how they would ever sleep because everyone [would] rush to get to that bank. What I would say is: Follow the guidelines through most of your financial institutions, banks. There’ll still be some documents that will be required to be uploaded. It is not something that you would normally sit down with an individual to discuss.
MC:
There’s a lot of legal aspects that come along with that, a lot of liability for the bank associates to be able to advise someone how to correctly fill out a form that would hold true to the sense of a big legal issue. So you want to complete that, upload the documentation.
ADVICE FOR THOSE APPLYING
If I could give any advice that I’ve received over the last couple of days: Make sure that you upload what is requested of you. Don’t rush to get through the process to get your name in the system. That’s only going to delay you and everyone else. We will not process a loan request for that grant if you have not uploaded the documents. We will put it in a holding status, [and] communicate with you. But just think, if you’re receiving 80,000 requests… as of right now, I would say probably a good 40% of them are not fully incomplete.
MC:
That’s time that we could really be working on getting money into the hands of the people who really need it. And to be quite honest, I’ve talked to countless businesses and business owners who are really considering shutting doors because this is not a permanent fix, and we hope that things will get back to normal very, very soon. We’ve seen some indication just from a governmental standpoint, they’re beginning to think things are moving in the right direction with the pandemic that we’re facing. That’s having a little positive move in the markets. We’re seeing some optimism coming back, so that if we can continue to do what we’re doing from a financial perspective and get the money into the hands of the people that really, really need, imagine how many lives that would actually impact — how many lives that would change immediately.
MC:
There’s a lot of positive that’s coming out of this, you know. There’ll be a lot of people that we’ll be able to help, but we’ve got a lot of work to do in a short period of time to get there. So take the time and invest to upload and you know, make sure you’re filling out your documents correctly. It’s better to take a little extra time upfront than to take a lot of extra time on the back end. We’ve got to circle back around and get to that loan that was put on hold. It might be three or four days before we get to it.
DS:
Right. And that’s three or four days. Makes a big difference right now.
MC:
Absolutely. And [Truist’s] goal, from the time that you submit it, our goal is to be able to receive that application, have the initial underwriting process, have a contingent operating process, and then fund that loan. We’re shooting for about three to four days to be able to do that. That’s pretty quick.
DS:
That’s very quick.
MC:
That’s our goal. We have worked literally… my eyes are, I can barely keep them open now because I’m so tired. We really have been working a lot of lot of hours trying to help a lot of people.
DS:
Yeah. Well good work for you guys. And thank you for doing that, and staying up on all of this information. [Commentary re: questions].
WHAT IF YOU DON’T BANK WITH A PARTICIPATING INSTITUTION?
What are you doing as far as helping customers right now? You mentioned having a banking relationship versus not having a banking relationship. If somebody comes to you and they say, well, you know, “I’m not a Truist/BB&T client or customer, but I’ve been thinking about switching” or, “my bank really isn’t helping me on this.” How does that conversation look? If somebody wants to come to you and say, “I’d like to start this new relationship.” They’re not already an established customer of yours. What does that look like if they’re trying to take advantage of these programs as well?
MC:
They’re very, that’s a very good question. Um, and unfortunately I don’t have a lot of good answers for you on that. You have to have an account prior to this whole issue coming up. So we’ve had some instances out there. You can read in the news about banks recently that have been disqualified from this particular program. I won’t get into the specifics of that because that’s not the nature of this conversation, but you can do your own research on that. We have received a lot of kickback from that — I mean kickback [as in] clients wanting to come to me because they’ve either been informed about me or they’re just inquiring. However they came to me, they came to me wanting to open up new relationships to take advantage of the Payroll Protection Program. Well, unfortunately you have to have account prior to February 15th in order to qualify for that. This is not because, because we have…
DS:
Let me stop you real quick. You just said February 15th — prior to February 15th.
MC:
Prior to February 15th.
DS:
Okay. That’s important for, for viewers to know. Okay.
MC:
Right. Good question. So if you didn’t have an account prior to February 20th, we will still welcome the account, but it won’t be, you would not be eligible for the PPP.
DS:
Okay. And for those who just turned in: remind us what that stands for?
MC:
Payroll Protection Program. That’s the SBA product that’s forgivable. If you use the expenses for a percentage of the expenses for payroll, just to keep your employees paid through this pandemic.
DS:
Right. Can you give us a quick rundown of what those percentages are?
WHERE TO GET MORE INFORMATION
MC:
I would have to direct you back to SBA.gov. There’s a list of all types of requirements and so forth. I’m not trying to promote what we’re doing, but I know where to go on our site. If you go to Truist.com, you’ll see a Covid 19 response up at the top right corner. This is just to direct you quickly so you don’t have to search for it. So at the top right of the site, you’ll see where it says “Covid 19 Response.” If you click on that, it’s going to give what you’ll have to have to qualify, what types of businesses qualify. If I started going through that, I might miss some things, but I would rather the viewers take advantage of all the information as opposed to me missing some of the things.
DS:
So they can at least start their search there and, and sort of understand what’s going on.
FINANCIAL MARKETS + REAL ESTATE
So let’s pull a little bit more big picture right now because we’ve been talking a lot about banking and this particular program and this particular issue. Let’s talk a little bit about the financial market in general. What have you been seeing? It has been very interesting. It has been up, down and all over town as far as I can tell. And, there are all these questions. Of course from my end, with what I do for a living, I’m getting questions about, “how does this affect the mortgage rate?”
When, when the Fed rate went basically to zero, they were like, “I’ve gotta lock in my mortgage.” That’s not exactly how that works. But that’s a conversation. You and I, and the people in our industries, we know there’s a lot of crossover and they’re all financially-based things.
We are the ones who need to be prepared to educate our clients and customers and consumers, because you’re not just going to know all of that offhand. We think it’s normal because of what we do for a living. But we are the resource. That’s why we exist. Right? That’s why we have value. So from your perspective, what are you seeing in the financial market? What are you seeing right now and then what’s your forecast, maybe three months, six months, a year out? What are you seeing?
MC:
So, you said it perfectly, I don’t know how much more I could say. It’s up, down and everywhere right now. It’s hard to target where the market is. I will speak directly maybe from a real estate perspective. I can kind of tell you what I see from there, and I can tell you from the financial sector, what I see. A lot of that really is contingent on consumer confidence and where are we going to get through these next couple of weeks with this pandemic. But from a real estate perspective: Refinances.
THE REFI BOOM
If you are in the refinance market, I’ve got some connections throughout that that particular segment of particularly lending. We’ve got some good partnerships there, and I’ve spoken with many of them over the last couple of weeks. All of them are saying the same thing. Refinances right now are priced very, very high. And that is mainly due to the volume of clients right now wanting to refinance, assuming that the rates were just cut, like you mentioned before, to record lows. So everybody’s rushing to get a refinance. Well, what that’s doing is it’s driving the [supply,] it’s almost overwhelming for mortgage brokers and banks to, to manage. And particularly at a time like this.
DS:
Well, it’s Econ 101 right? I mean, that’s supply and demand.
MC:
Supply and demand. That’s right. So what it’s doing is, it’s driving the rates up right now on the refinance market to slow down some of that interest. So that we really can focus on the things that are really hot right now, which are purchases. So if you’re looking at refinancing, you can go check with your bank or your financial institution. We are seeing a downward trend, however, in the refinance pricing, however it’s still priced above the market at this time because there’s still so much demand out there for that particular product.
A TIME TO BUY
From a purchase standpoint, the rates are great right now. So those who are looking at buying a home, it’s a great, great opportunity to get out there and purchase, you know, call Daniella. She’d be able to help you. You can at least get some ideas to help you work through that. But it’s a great time to purchase — historically low rates right now.
DS:
They are, and they have been for awhile. Fortunately, they’ve not really spiked in all of this, because for so many people, their focus right now was on that refi segment. A lot of people have pulled out of that purchase and sale market, at least for the short term, because of all the uncertainty. Right? And so there’s gonna be a lot of pent-up demand. Even for those people who were kind of mid-transaction and decided to pull out. And unfortunately, I’ve seen some of those in my own business. There’s just a lot of uncertainty, but I think people are starting to… I don’t want to say relax a little bit. Of course, the name of this whole thing is “Remain Calm” for a reason. Keep your head on straight. But if you have the financial wherewithal to be able to proceed in this market, it’s a good time. It really is. And that is not me selling you anything. It is a good time.
MC:
It’s a great time. It’s a really, really good time. From a real estate perspective, it’s really, really good time from a market, from a financial investing perspective. You know, I’m not, I’m not a licensed advisor. I can’t advise you on anything on the markets, but I can tell you if you are true to the whole theory of buy low and sell high, I don’t know how much lower it can get. If you appreciate that perspective, then you know, that take that for what it is.
OTHER FINANCIAL ASSISTANCE
But from the real estate perspective, there may [also] be some people who are listening who have been impacted from a financial perspective, and they’re not able to pay the bills, and unable to pay the mortgage and so forth. Contact your bank.
MC:
Banks are offering a lot of support right now for those car loans, you know, everything. Anybody who’s lending right now. We found out, I think this morning, that insurance companies now are starting to give back money because people are driving less. Well, companies are looking because number one, you don’t want to be the only one left out and two, it’s just the right thing to do. So, contact your financial institution to find out what options are available. I know that we’re offering forbearances and deferrals on certain products, and so are others. So don’t feel like you’re alone in this. You have support out there. I can tell you that if there’s any CEOs or corporate owners who have any type of integrity, they would really want to be there for their clients, and do whatever they can for as long as they possibly can to assist those who have given back to them for so long. And who helped them become who they are as well. It’s just the right thing to do.
DS:
Exactly. So before we get to our Q&A session, this final question that I ask everybody that comes on: What is one thing from your perspective, your profession that you would recommend our viewers be doing right now? Or if they’re not, go ahead and start. It could even be in the negative. What’s something they’re probably doing that they shouldn’t be doing? So I’ll give you the floor.
TIPS: STAY CALM + REVIEW YOUR FINANCIAL PICTURE
MC:
For those who are social distancing, maybe defy social distancing and go get a massage and relax a little bit. Stay calm. But if you don’t want to, if you want to stay socially distant, I would say… Really the whole theme of your message is, stay calm. You really at this time. That really transpires through so many different components of our life. Stay calm, you know, this too will pass. Obviously it will have an impact on all, and has had a tremendous impact on all of our lives, and all of our family’s lives.
DS:
Nobody is unscathed.
MC:
Everybody’s being touched by this, and I can tell you: From the executives down to the whatever position you want to go to, on what is considered [low on the] totem pole. Everyone in between has been impacted by this, no doubt about it. So stay calm. It will pass. Will there be impacts? There’s already a lot of impacts. If any of you or your viewers are anything like me, we have already been through some difficult times in our life and this is just another opportunity for us to overcome, you know, based on the knowledge that we have, and have grown from the experiences that we’ve had in the past. So number one, I would say stay calm. Two, I would say start assessing your financial strategy. Where do you want to go once this thing starts passing? I think in times like this, it’s a great opportunity to start planning and strategizing on how you want to be after this is all over. Where do you envision yourself to be after this is all over ? Start now. Really think about it.
DS:
No time like the present!
MC:
We have more time on our hands than we’ve ever had on our hands, right? Because we’re home. Start thinking about where you want to be when this is over in the next year, the five year mark. Where do you want to be, and start planning. And then number three, maybe evaluate your debt structure. Because companies right now are looking to help see where your debt structure’s at.
DS:
It seems like a great opportunity for that, too. You know, for people who are leveraged, now’s the time to really look at that. Right?
MC:
Yeah, that’s perfect time to do it. So there’s a lot we all can learn from this, and those are just some of the things. There’s a lot we all can learn from this. I just feel like this is gonna make us all better in the end. So I appreciate the opportunity for me to come home and talk to your guests about what I’m seeing from a financial perspective.
ARE SOLE PROPRIETORS ELIGIBLE?
DS:
Fantastic. Well before we go, we’ve got one question [that hasn’t been addressed]. From Christian: “Will sole proprietors be able to apply for PPP if they don’t have any employees?” I think I know the answer, but you go ahead.
MC:
Okay. Sole proprietors: If you are receiving pay, [yes to] sole proprietors according to the guidelines. And again, if you go to TRUIST.com, to Covid 19, you’ll scroll down and it talks specifically about the sole proprietors, but sole proprietors are entitled to apply for this. You still have to document, you have to justify the income through 2019. Hope that answers the question. Daniella, was there any insight you want to give on that?
DS:
Yeah, to my knowledge… a lot of us in real estate, we are either sole proprietors or even more commonly just independent contractors, right? So there are ways for those who are structured the way that most realtors are to also be eligible for this, because of course it’s very much a profession. It’s not a payroll profession in a lot of cases; you are not an employee unless you’re employing yourself, or you’re employed with some team or a boutique firm or something like that. But there are ways. So I should say too, if anybody’s interested in some insights from my end of that, whether it’s real estate or just another independent contractor structure, reach out to me directly. Let me know because I do have some breakdowns out of our company, Charter One Realty, that maybe will help you guide yourself as well.
DS:
Thank you so much. Mark Cutler with Truist, formerly BB&T. Thank you for your time. Much appreciated. [Commentary on other formats of the video]. Stay safe and healthy.
New Speaker:
Thank you, Daniella. All right. You as well.