Health-care businesses are the source of some of the biggest demand for the small business loan program in the coronavirus relief package from the federal government, a regional bank CEO told CNBC on Wednesday.
“The second-highest request for these PPP loans in our case is health-care businesses. So doctors, radiology labs, things like that. That may not make sense on the surface, but just think about we’ve had to empty our hospitals, put off elective procedures,” Chris Maher, chairman and CEO of New Jersey-based OceanFirst Financial, said on “Power Lunch.”
“There’s a whole supply chain in health care. The folks we need the most right now, they need cash flows so they can keep putting people out in the field,” Maher said.
As part of the response to the pandemic, many states and hospitals have suspended elective procedures to conserve personnel and equipment for patients with COVID-19. Those other surgeries and procedures are often a key source of revenue for hospitals and medical clinics.
Congress and the Trump administration agreed to a $2.2 trillion relief bill to help support the economy during the pandemic, including a payroll protection program for small businesses worth up to $350 billion.
Many banks and small businesses have complained that the program, which was launched last Friday, has been inefficient to use and may be drained before all businesses can tap into it. Treasury Secretary Steven Mnuchin has said he will ask for additional money from Congress if the $350 billion is used.
Maher said that his bank has been able to distribute $3.7 million as part of the program.