No area of our economy has suffered more from the effects of the pandemic than small businesses of every variety. It’s been devastating on owners and employees, and the shock waves have circled back to cripple the entire national economic infrastructure.

Small business is the country’s largest employer, by far. When it’s sick, we’re all infected by a very nasty economic virus. Getting it healthy again is everybody’s business and, specifically, that of banking and government.

The PPP (Paycheck Protection Program) loan effort is a case in point. Sure, there were those who shouldn’t have gotten a loan, some who should’ve and didn’t, others who got too much, and then, as always, there were the usual suspects who seized the chance to perpetrate fraud. But, overall, it worked, thanks to the nation’s smaller banks that pitched in and got the money out in their communities. Remember, this was a “General Quarters, man all battle stations” effort that was ramped up in just a few days.

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An example of what made the program a lifeline for a lot of little enterprises is a community bank in Colorado, just $294 million in asset size, which booked 300 PPP loans, with a total dollar amount of more than $14 million. As the program wound down in April of last year, the bank’s loan department worked past midnight to make sure all applicants were served. As the CEO said to me, “The little guys hit this one out of the park.”

This was an outstanding effort, but the fact is that institutions under $10 billion in size made more loans than the TBTF’s (Too Big to Fail). This is because small business lending is an integral part of the community bank business model. On the other hand, with the behemoth banks, it’s just a business line.

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It’s an example of what should, and could, happen over the next 24 months. Yes, financing small business is banking’s business, but supervised financial institutions can’t do it alone. The PPP loans are guaranteed by the Small Business Administration, so there’s no asset risk for the lending bank; bad assets are the only thing that will break a bank. A robust, practical, small business loan guarantee program needs to be in place to rescue the country’s entrepreneurial enterprise infrastructure.

The Second National Bank of Downriver, Montana (both fictional), cares deeply about the survival of the Mom and Pop enterprises in its trade area, and, of course, about their deposits when they’re healthy. But caring, and caring enough to fund, say, an operating capital loan, doesn’t carry any weight with federal and state bank examiners. Their mission is to protect the FDIC deposit insurance fund. They don’t care what color a banker’s hat is, black or white, as long as the logo on it is not “Insolvent.”

Make too many Nice Guy loans that are tabbed “Special Mention” — or “Doubtful” by the suits from the Office of Examination — and you may not be a banker when next year this time rolls around.

Maybe the SBA doesn’t have to be involved, except as an example and guide. In the late 1960s, private mortgage insurance, replicating FHA (Federal Housing Administration) protocols, hit the streets. As long as the concept has used practical mortgage lending guidelines, it’s been successful and profitable. What about a private corporation — say, the SBAGF (Small Business America Guaranty Fund) —capitalized by the likes of Jeff Bezos, Elon Musk, Bill Gates and friends and families.

Small business might be very good business for big business.

Pat Dalrymple is a western Colorado native and has spent more than 50 years in mortgage lending and banking in the Roaring Fork Valley. He’ll be happy to answer your questions or hear your comments. His e-mail is pdalrymple59@gmail.com.