When South Carolina businesses needed help, they turned to their bankers 


Jay Klugo initially underestimated the hit his Augusta restaurant could take from the COVID-19 pandemic.

Klugo, owner of Sole downtown and two other restaurants in South Carolina, blew through the company’s savings during the first month, trying to keep employees on until the impact subsided.

“When it first happened, I did not think it was going to be as intense as it has become,” he said.

“After a certain point, we realized it’s honestly going to last a lot longer.”

The first round of the Payroll Protection Program began April 4.

Already accustomed to applying for bank loans, Klugo said he had most documents already together when he approached area lenders.

Banks are approving the vast majority of the 1-percent-interest, forgivable PPP loans provided by the Small Business Administration through the CARES Act, the massive coronavirus relief package.

Klugo said local lenders immediately stepped up to help him.

“The more local banks that I used were all amazing and fantastic,” he said. “We got our stuff to them in the first couple of days. It wasn’t a fast process, but we were patient and they confirmed that everything went through.”

Now with a reopened patio and spaced-out tables, Sole is in its second week of the two-month PPP loan.

With proper planning, Klugo said the company can survive the pandemic, although it will never be the same. He needs sales to increase from the more than 85 percent they are down to being around 50 percent down.

“To be honest, as long as nothing tragic happens or it doesn’t begin again majorly and we’re able to keep people spaced out and let people make decisions about their health – because of the loan we’ll actually make it through this, and in a good way.”

What’s helping the business carry on is a new approach using marketing, customer service and extreme attention to distancing and sanitation, he said. Staff wipe down everything after each table leaves, he said.

“Cleanliness is at a super high level where when somebody walks through they’re impressed,” he said.

Most staff members were ready to return to work, he said. “95% of the people that work with us wanted to come back the moment we came back open,” he said.

One of those smaller area banks that jumped in action and attracted new customers was Security Federal, said bank president Phil Wahl.

“When their bank did not respond and didn’t give them an update, we come in and immediately get their package approved,” Wahl said.

Security Federal’s branches in the Aiken-Augusta area have closed 521 loan applications totaling $56 million as of Thursday, he said.

PPP has made banking like nothing Wahl said he’d ever seen.

“Never in my life have I had to look at someone’s payroll to say whether they get a loan,” he said. ”‘Forgiven’ was not in our vocabulary.”

Security Federal staffers worked 16- and 18-hour days to process hundreds of applications in the first round of funding.

“The first ones that came to us were the ones that were hit hardest – the hotels and restaurants,” he said. “Then it was everybody from the mom and pop shops, the sole proprietors to somebody who has just under 500 employees.”

Security Federal pushed through several hundred backlogged applications when Phase 2 began April 27, but now demand for the loans has dropped, he said.

Funds remain in Phase 2 and Wahl said now only from 15 to 20 businesses are applying each day, perhaps for fear of being audited, a new requirement for loans of certain amounts.

“We’ve really seen a distinct slowdown,” he said.

Loan recipients can begin seeking loan forgiveness in eight weeks, he said. Seventy-five percent of the funds must be used for payroll-related purposes.

Follow the rules and the loan is forgiven at eight weeks. Don’t follow them and it remains a two-year loan at 1 percent interest.

Cameron Nixon, east Georgia regional president for Cadence Bank said Cadence has processed every application it has received and businesses are either funded, or indicated they will soon receive the loan.

The larger bank — branches run from Texas into Florida and Tennessee — has processed more than 3,800 applications totaling just under $1.1 billion, he said.