Banks have administered $669 billion in relief loans to small businesses and overseen the loan forgiveness of more than 1.1 million loans, prompting a wave of consumer satisfaction, a study from analyst J.D. Power has found.
Last year, banks were increasingly coming under scrutiny over how they facilitated Paycheck Protection Program (PPP) loans during the pandemic.
But according to J.D. Power’s 2021 U.S. Small Business Banking Satisfaction Study, released today, small businesses’ expressed appreciation for their bank’s handling of PPP applications, and loan forgiveness bolstered overall customer satisfaction to record highs this year.
“Small business owners are feeling good about their banks and more confident about the economy, but just more than half of small businesses are financially healthy,” said Paul McAdam, senior director of banking and payments intelligence at J.D. Power.
“Banks can build upon the customer goodwill generated through PPP by providing solutions and information to address the range of financial challenges facing small businesses, including access to timely credit, improving business creditworthiness, building savings to cover a cash shortfall and having adequate insurance coverage,” he added.
Overall customer satisfaction scores for small businesses that applied for PPP loans were up at 853, on a 1,000 point scale, marking a 32-point increase compared to customers that did not apply for a PPP loan.
Satisfaction climbed to 869 among small businesses that completed the process of PPP loan forgiveness.
The study also found, however, that despite improvements in the economy and in business outlook, only 52% of businesses were financially healthy.
As a result of the PPP initiative, in excess of 1.6 million businesses across the US received $349 billion in loans to pay their employees and cover business expenses during Covid-19.
Several class-action lawsuits were filed against issuer banks, including JP Morgan and Bank of America.