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Consumer Bankers Association CEO details small business trends

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Richard Hunt, Consumer Bankers Association President & CEO, joins Yahoo Finance to discuss small business week.

Video Transcript

ADAM SHAPIRO: Seana, it is National Small Business Week. And talk about the role that banks are playing as they help small businesses, which employ the majority of people in this country, stay in business Let's bring into the stream Richard Hunt. He is the Consumer Bankers Association president and CEO.

It's always good to have you here. A great deal to talk about what's going on. But I want to dive into something that a lot of small business owners may, will smile perhaps when they hear this because CBA has helped simplify the forgiveness process on loans less than $150,000 for businesses, small businesses, which are trying to stay in business. Is there more room? Are there other businesses that could get that forgiveness?

RICHARD HUNT: Well, Adam, I got a little project for you tonight. Please, before you go home, go by your local small business person. Give them a fist pump or a big old hug for making it through the last 18 months.

I thought this was the best of America, the United States government creating a program, the Paycheck Protection Program, working with banks in helping out small businesses save about 90 million jobs. Normally this program would have taken anywhere from 12 to 18 months to implement but we did it in a matter of days working around the clock, many of the bankers at their small kitchen table or in their makeshift bedroom offices to help the small business get productive. And you're right, we are very proud here and with the International Franchisors Association to work on that one-page simplification. We're here to announce that over 90% of all those loans under $150,000 made in 2020 have been forgiven.

Originally it was a 12-page document. Adam, can you imagine filling out a 12-page document for a $10,000 loan? So we were able to work with Congress to get it down to that one page. Just tremendous effort across the board. So, yes, there are still programs available for small businesses to take advantage of with America's leading retail banks. The Conventional Loan Program that we have seen an uptick in is one that most small businesses are now using.

SEANA SMITH: Richard, just give us a sense of when you're speaking with these small business owners, I guess, where do they stand today? Because we've seen the surge in the number of cases when it comes to the Delta variant, many people or some people, I should say, pulling back on spending as a result. Are many of these small business owners, are they facing tougher times right now or at least over the last couple of weeks?

RICHARD HUNT: Yeah, Seana, we were very optimistic say around May, June, and early July. And it was a sucker punch, the Delta variant. Just when we thought we were getting to the other side of the COVID the Delta variant raised its ugly head. And yes, it did hurt small businesses as consumers confidence went down.

But now we're now seeing trends over the last week where hopefully the Delta variant in many states, not all states, or maybe behind them. And maybe we can now turn the curve once again as long as we continue doing all the safety precautions we need in this country,

ADAM SHAPIRO: Richard, as I walked the streets here in Manhattan it brings a smile to my face because the empty storefronts I'm actually seeing the coming soon signs and going to open on October 1st. There's more of that than I thought there might be at this point. What role are the banks, whether they be the large banks or mid-sized banks playing in making funds available outside of PPP? To the new entrepreneurs who want to get a small business launched, are they holding on to that money or are they helping finance new deals?

RICHARD HUNT: Oh, certainly we're trying to deploy as much resources as we can to make sure small businesses, even those who are just starting out, can continue to open their doors and serve their customers, whether that is in dining or carryout or the local hardware store. So we have our conventional small business loans. Obviously we've been doing these loans for over 200 years and will be continued doing in a reasonable and responsible way so the small business person can make sure they can afford their payments.

SEANA SMITH: And, Richard, for those businesses that have successfully navigated the past year and a half what can other business owners learn from them? I guess, how the companies that you have seen be successful on this front what have they done?

RICHARD HUNT: They had to adjust. Instead of only relying on say indoor dining they had to do carryout. You had to adjust over the last 18 months just like small businesses do each and every day. You have to throw out the playbook. The playbook may be different this November, this December than it was last year as well. So that's what we do every single day at CBA with our small business people, we sit down and try to readjust once again.

And look, I will tell you this, every region of the country is different. There's not a playbook for all 50 states. What works in Oregon may not work in Maine or may not work in Arkansas or Louisiana. So the key word is being adaptable through the current trends.

ADAM SHAPIRO: Hey, Richard, we only have about a minute left. And I have to ask you, are bankers raising a concern about the pending legislation regarding taxation in Congress? And how that might impact small businesses, as well as the bank's ability as they do their due diligence to lend to a potential business owner?

RICHARD HUNT: Yeah sure, Adam, as you well know is a person who's a master of the tax code like you, you know, many small businesses do Subchapter S. So they are falling as individuals. It's usually not a good trend in the country to raise taxes because when you're looking at raising taxes at just large businesses sooner or later the ramifications reach all the way down to small business owners. So I don't see anybody in Main Street America saying we need increased taxes because we know what has happened in the past. It stifles innovation and it stifles growth

ADAM SHAPIRO: Richard, I got to tell you the real master of my taxes is Tony Michaeli in Cleveland, Ohio. He's been my accountant for over two decades. So I appreciate the compliment, not deserved at my end.

But it's always good to talk to you. Richard Hunt is the Consumer Bankers Association president and CEO. Good to have you here talking about small business.