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US Thousands of applicants, zero loans: Trump's small businesses lending program is a failure to launch

02:25  05 april  2020
02:25  05 april  2020 Source:   nbcnews.com

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One day after the launch of a 0 billion loan program designed to rescue millions of small businesses , technical glitches continued to The lending program , which forms part of the trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, is a much-needed lifeline for the 30

The program requires small businesses to spend 75 percent of their loan on keeping workers Small - business owners say they are in limbo and can’t make critical decisions until the program is Other applicants will have to wait until the SBA provides finalized loan documents before their loans

One day after the launch of a $350 billion loan program designed to rescue millions of small businesses pummeled by the coronavirus pandemic, technical glitches continued to cripple the ability of the nation's top lenders to begin processing the loans, throwing into doubt when any of the applicants will start receiving any money.

a man wearing a suit and tie: Image: Treasury Secretary Steve Mnuchin speaks at the coronavirus task force briefing at the White House on April 2, 2020. © Alex Brandon Image: Treasury Secretary Steve Mnuchin speaks at the coronavirus task force briefing at the White House on April 2, 2020.

The lending program, which forms part of the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, is a much-needed lifeline for the 30 million small businesses across the country. It offers loans of up to $2 million to companies who employ fewer than 500 people. Those loans are forgiven for eight weeks, as long as the businesses meet certain conditions, such as using the majority of the loan to continue paying worker salaries. Payments are deferred for six months after that.

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Small business owners reported frustration trying to get answers from their banks and submit the required documents. “Yesterday was a lot of confusion He has said that his team has worked until 4 a.m. on some days, and headed back to the office within three hours, to launch the brand new loan

Thousands of banks expected to participate in the Trump administration’ s coronavirus stimulus loan program for small businesses are getting cold feet at the eleventh hour, representatives from those banks told a handful of media outlets on Thursday. If they pull out, the entire future of the program is

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However, two of the nation's biggest banks say they have only just been able to start processing loans.

"We are all waiting on the Small Business Administration," a Chase senior executive told NBC News.

Bank of America and JPMorgan Chase received tens of thousands of applicants within hours of the program's launch on Friday, senior executives at both companies told NBC News. Bank of America reported receiving over $22 billion in requested funds. Wells Fargo, which appeared to have a late start, on Saturday opened a portal where customers could register and get an email back "with next steps within in a few days." Citi's website said "applications will be available shortly."

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A small business lending program designed to halt an avalanche of layoffs got off to a rocky start on Friday as banks rushed to figure out how to process millions of expected applicants based on guidelines the Trump "Starting the program is a big part of the battle," said Paul Merski, group vice

The launch of the small business bailout fund has been rocky since it opened on Friday morning. Tens of thousands of businesses have swamped As of Friday evening, lenders originated more than 17,000 loans valued at about .4 billion under the program , Jovita Carranza, the administrator

To begin the lending process, small businesses must submit their application via an online portal on their bank's website. A banker then conducts a phone call with the applicant.

However, there's no way in the hastily fashioned system for the banks' computers and those of the Small Business Administration, which administers the Paycheck Protection Program loans, to talk to one another. Bankers have resorted to entering applicant information by hand into E-Tran, the proprietary system used by the SBA to guarantee loans and generate loan numbers.

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With banks reporting tens of thousands of applications just in the first day, the system is already overwhelmed. The SBA usually processes about 60,000 loans in an entire year.

Despite this, President Donald Trump said in a news briefing Saturday that, "in 24 hours, the SBA processed over 28,000 loans."

"Remember, we had the greatest economy," Trump said. "Now we have to open our country."

Senior banking executives at Bank of America and Chase told NBC News they were still waiting on loan numbers to come back from the SBA, and so far had not processed any more than a trickle from the flood of applicants.

Bankers said they were working systems to automate and speed up the process but had no idea when these customers would start to see money in their accounts.

An email from the Small Business Administration to lenders Saturday morning apologized for "ongoing technical issues," which included slowness and the inability of "many" lenders to create new logins or reset passwords.

The SBA did not immediately respond to an NBC News request for comment.

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Some community banks, locally owned retail banks with less than $1 billion in assets, reported being able to make loans. Connect One Bank of New Jersey told CNBC Friday that they had processed a loan and deposited it into a customer's account.

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"@BankofAmerica & community banks are rocking!" Trump tweeted late Saturday morning, adding that he would take additional steps if necessary to shore up the program.

"I will immediately ask Congress for more money to support small businesses under the #PPPloan if the allocated money runs out. So far, way ahead of schedule. @BankofAmerica & community banks are rocking!"

Since the program is first come, first served, small businesses who applied at lenders who were having trouble with the hastily fashioned relief program run the risk of missing out.

Small businesses, which employ almost half the private workforce, don't have the cash runways of big companies such as Amazon or Starbucks to help them weather a crisis of this magnitude. In a recent study, half the small businesses surveyed had two weeks or less of cash liquidity.

"After the financial crisis, we lost 1.8 million small business owners," Karen Harned, executive director of the National Federation of Independent Business, told NBC News. "After the reaction I'm hearing, I'm worried about what that number might be after this is over."

Pelosi, Schumer double down on calls for 'interim' coronavirus relief bill .
House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer doubled down on their calls for an “interim emergency” coronavirus relief package on Monday, renewing their efforts to get more than $500 billion in additional funding for Americans, businesses and hospitals amid the pandemic. © Provided by FOX News ‘Journal Editorial Report’ host Paul Gigot and Wall Street Journal columnist Dan Henninger weigh in. In a joint statement on Monday, Pelosi, D-Calif., and Schumer, D-N.Y., outlined their “urgent priorities” for this interim package, which would cover small businesses, families and working Americans.

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