When the world as most of us know it shut down in mid March, businesses faced an abyss.
No customers, no income, no plan. No hope.
In a huge, sweeping, and fast bipartisan move, the Congress and Senate passed the Coronavirus Aid, Relief, and Economic Security Act — those words were cobbled together to yield the act’s feel-good acronym, CARES — and the president signed it into law on March 27.
Part of the act created the Payroll Protection Program; the PPP gave small businesses, including both for-profit and non-profit ones, low-interest loans to allow them to keep their employees on staff.
Those businesses had to work through banks to get those loans; the program was designed to be easy to use, but easy as Congress defines it and easy in real life aren’t necessarily the same thing.
As it turned out, at least at first it was hard for small business owners to get through to banks that were willing to work with them. Servers crashed, emails and phone calls went unanswered, tempers frayed, hope fizzled.
There was one small bank, though, that came through repeatedly for its customers, and even for businesses that had not been its customers. On the list of the banks that have given out the most PPP loans, the top three slots are filled by huge national institutions. The fourth place on that list shows Cross River Bank.
Cross River has its headquarters in Fort Lee, its only branch is in Teaneck, and the company that does research and development for the advanced banking technology that is its lifeblood is in Jerusalem.
So how and why does Cross River do what it does?
Phillip Goldfeder is the bank’s senior vice president for public affairs; he came to that job after working first for the New York City government and then a stint as a New York state assembly member, representing its 23rd district. (That’s parts of southern Queens.)
What he brought to the job was an understanding of the value of community, and it is community that is at the heart of what Cross River does, Mr. Goldfeder said.
Look at its history. “It was founded in 2008, which anybody who knows anything about the economy knows was when we were in the greatest recession since the 1930s. Why would you open a bank then?
“We did because there was a community in need, and a lack of access to financial services, and our founder saw that.” The founder is Gilles Gades, who now is the bank’s president and CEO. Cross River has done very well since then, using its own technology, which is constantly being fine tuned and rethought and refined in Israel, to work with high-tech start-ups as well as with a range of non-profits and small businesses. So when he wanted to start a bank, based on the value of community and the understanding of the importance of technology, northern New Jersey was a logical place to look. When a bank charter became available, Cross River’s leaders took it. “There are few places that really embrace the concept of community as people do here,” Mr. Goldfeder said; in return, “post-recession, we were able to offer trust, reliability, and stability to a community that needed the help and appreciated that sort of service.”
Since then, the bank has become an integral part of the community.
So when PPP began, “it was logical for us to lean into it,” Mr. Goldfeder said. Although many larger banks chose not to offer the loans, “saying that they were not interested, or it is too difficult, Cross River leaned into it and embraced the challenges, to provide the help that businesses needed.
“The question right off the bat for us, when the PPP started, was can we help,” he continued. “And the simple answer was yes. We recognized early on that many of the big banks were only going to serve certain customers, who they already had relationships with. That Main Streets all over New Jersey, all over the country, really needed this funding.
“Cross River knew that there was a great need for this funding, and we knew how to get it done.”
Cross River defines community broadly and inclusively, but — and! — Jewish values are at its core. This is not a paradox. Take the bank’s name. “It’s about bridging the gap,” Mr. Goldfeder said. What does that mean? “It depends on who you ask. Most people think that it’s about the Hudson, and it’s because our offices in Fort Lee overlook the George Washington Bridge. But it’s also the story of Avram, who chose to cross a spiritual river, to take the path less taken, to go against the trend — to become our father Abraham.
“Jewish stories are woven into what we do at every level,” Mr. Goldfeder continued. “It’s the humility and that sort of spirituality that drives our CEO and drives the entire bank. It’s less of a mission to provide bank services than it is a mission to serve.
“The first PPP loans we made were to local organizations — yeshivas, day schools. Out of the first batch of loans, nonprofits were the vast majority. We realize that nonprofits will play a significant role in keeping our community stable, and it is our responsibility to help keep it stable.”
That sounds very impressive. Doing well by doing good. But is it possible? How does it work? “We have a simple model,” Mr. Goldfeder said. “A lot of businesses are successful, and because they are successful they try to find ways of giving back. For Cross River, it is the opposite. We believe in giving back, and we believe that when we give back we will be successful. If we are doing good work, we are going to be successful.”
Cross River has worked with the Sinai Schools, the Paramus-based organization that provides individually tailored educations to students with special needs, placing its students in classrooms in day schools, making them part of that school’s community according to each student’s own circumstances and needs. Cross River is not Sinai’s main banker, but it gives students internships and work experience. “We have mentored their students, and the kind of good will that it creates generally will lead to the bank being a success, because people want to partner or do business with a bank that has such a good name in the community,” Mr. Goldfeder said. And “a lot of this is God’s will,” he added. “Cross River was not created by accident. We fully believe that everything happens for a reason, and that when we find ways to help the community, we will be successful as a bank and as a business.’
Still, he stressed, “We do not work only with Jews. We are here to serve anyone and everyone.” And he defines community as “people who come together for the betterment of the whole.
“Our numbers are very big. We made 107,000 loans. Only three banks in the country did more than we did — and our loans were among the smallest. We were not trying to make big, flashy loans. Small businesses are the backbone of the community, and they are not just about making a profit. They are also about helping the community.
“Every small business has a purpose that helps the greater good. That is the core of what we do.
“Charity begins at home, with helping small businesses. We fundamentally believe that we have a responsibility to the community that has supported us and we have been blessed with the technological capabilities that allow us to serve the greater good.” And the loans are not restricted to Bergen County; nonprofits and for-profit businesses from around the United States have gotten PPP loans through Cross River Bank. “We are able to focus not just on New Jersey, but to make loans literally to every state in the country,” Mr. Goldfeder said.
Given that Cross River has been making PPP loans, it might be useful to explain what they are; after all, they are something new, created just for the coronavirus crisis and the imploding economy. Corinna Creedon is a CPA who has spent more than 15 years consulting on a range of financial issues; she’s now a managing director and the practice leader for BKD’s advisory services consulting group at the firm’s New York office. (BKD is a large CPA and advisory firm that has offices around the country.) Ms. Creedon knows a great deal about how nonprofits and small businesses operate; she knows a lot as well about what PPP loans are, how they work, and how businesses have responded to them.
“The CARES act was intended to create and support consumer confidence in a time of tremendous distress,” Ms. Creedon said. “The way to create consumer confidence is to ensure that people are secure, that they will receive their paychecks. That is what the act is designed to do. To ensure that people can get their paychecks and know that their jobs will be waiting for them.”
The CARES Act first was passed in late March and a new version, with new money, was passed in June; between that time, there were annotations and clarifications. It was complicated, because it was fast and new and cobbled together during very hard times, but its goal is “designed to identify the most vulnerable, the small businesses that have under 500 employees — both for-profit and non-profit — because these businesses are the most hypersensitive to changes in the economy.” Keeping these businesses’ employees on the payroll helps not only them and their employers, but also the economy in general, because when they have money to spend they will spend it.
“One of the fantastic features of the PPP loans is that there is no traditional underwriting process,” Ms. Creedon said. “When you apply for a loan, you don’t need to supply credit scores or any type of collateral. You don’t need to have any cosigner or guarantor on the loan.
“Also, it is made available to borrowers on a very quick basis.” Although it often was difficult for businesses owners to apply for the loans, once the application was complete, “most of our clients have received approval for their loans within three weeks. Once it was approved, the bank was obligated to fund it within 10 business days.”
At first, the loans were meant to cover eight weeks, and 60 percent of it had to go for salaries. The other 40 percent could cover some specific expenses, mainly rent or mortgage interest and utilities. Later, that period was extended to 24 weeks, and the percentages were flipped — it became acceptable to devote 40 percent to payroll.
Maybe best of all — if businesses can prove that their loans were spent properly, they will convert to grants. If not, the interest rates will be low; 1 percent for nonprofits, 2 percent for everyone else.
The government allocated $670 billion for the PPP, Ms. Creedon said; there is still about $130 billion unclaimed, and on Tuesday the Senate passed a PPP extension that would make those funds available until August 8.
Not surprisingly, many businesses tried to get a PPP loan, and the process at first was chaotic. “The application was very easy — only two pages, and you only had to fill in three numbers and initial 10 boxes,” Ms. Creedon said. “What was difficult was getting access to the banks, because at first a number of them, particularly the large national ones, weren’t interested in engaging with the program, and the small banks didn’t have the technology or infrastructure to handle all of the millions and millions of applications. The banks were slow to respond, because of the tsunami of applications.”
Cross River was not slow to respond.
“Cross River is the real deal,” Sam Fishman said. Mr. Fishman is the Sinai School’s managing director. “Cross River is one of Sinai’s community partners; that designation goes to institutions within our community that have embraced Sinai’s mission and cause and have helped us in important ways.” In 2019, Sinai gave Cross River its community partnership award, “in recognition not only of its financial generosity but also for how welcoming they have been and continue to be to our high school students, who serve as interns in our occupational preparedness program.”
He remembers walking into Cross River’s Fort Lee office — a luxury we can only dream of just now — “and as you get off the elevator and go into their space you realize that not only are you stepping into a bustling financial institution, you also are in a place with a true culture of warmth and compassion and helpfulness that emanates from the top. And I really mean it.
“They have always treated our interns as if they were part of the fabric of the place. They strive to give our kids a meaningful experience. The first time I met with Gilles in his office, and I talked to him about Sinai a little bit, he had one question — what can we do for Sinai. He visited, and he really embraced the experience.”
Mr. Fishman is proud of Cross River as a local institution, as a Jewish institution, as a model of how it is possible to do very well not only while but through doing good things. “I was floored when I read that Cross River came in fourth in the country in the number of PPP loans they originated, but it probably shouldn’t have been surprising, given the people I have met and spent time with,” he said.
“This is a small local institution, and look at what they have done for the country. My feeling is tremendous pride that we have an affiliation with them. And as a Jew, I feel that what they have accomplished is a tremendous kiddush haShem,” a sanctification of God’s name, “and a shining example of tikkun olam.” Of repairing the world. “Of making the world a better place in this very difficult time.”
Mr. Fishman talked about the help that Sinai got from the Jewish Federation of Northern New Jersey and from the Jewish Federations of North America. “The federation really has stepped up, both locally and nationally, to help Jewish organizations cope,” he said. One of the services the system offers is a series of webinars. “If ever I felt that I was part of am Yisrael” — the people of Israel, the Jewish people — “I feel it now,” he said. It’s the Zoom webinars. “There are Jews of every stripe, all coming together; we all live in little boxes now, and it was a webinar with thousands of little boxes with leaders of Jewish organizations all over the country.
“One webinar was about trying to get PPPs and running into brick walls, and there was a featured speaker, and it was a representative of Cross River, who not only explained the program, and what Jewish organizations could do, but also said that if you run into a wall with your bank, if your bank won’t help you, just reach out to us. We will help you.”
Sharsheret is a Teaneck-based organization that works with women and their families as they cope with breast, ovarian, and other kinds of cancer. Its executive director, Elana Silver, and its marketing and communications coordinator, Jordana Altman, worked with Cross River to get a PPP.
“It was a very confusing time,” Ms. Silver said. “No one understood it at first, and there was not a lot of guidance. You could have been working with a major bank, but no one would get back to you. Cross River was not our main bank, but we had an account there.”
So she called. (You didn’t have to have an account there at all, Mr. Goldfeder said.) “They were responsive immediately,” she continued. “They made it all so much easier.”
“Not only were they they the only place that responded to us, if we had a question on Friday, they would email back on Saturday night, right after Shabbes, to say we are working on it,” Ms. Altman said.
“Not only did they work on it in a technical way, but also in a very personal way,” Ms. Silber said. “They reassured us. They gave us information. They didn’t give us false promises. They did not say that they could do more than they really could do. They just said that they would do the best that they could.
“They reassured us. We felt that someone was taking care of us. They couldn’t promise us a loan but they never left us without a response.”
And it worked. Sharsheret got its PPP. “Our call volume jumped by 135 percent that first week of the shutdown,” Ms. Silber said. “Our work was even more in demand when corona hit, because we serve a vulnerable population. They’re immunocompromised. Some of them had to change their chemotherapy treatments or postpone their surgeries. Some had to go into the hospital for surgeries.
“We could not have shut down then, but with the PPP we don’t have to think about that. The loan made such a big difference to us. It was a game-changer.
“And we got that loan through Cross River Bank.”