Small businesses are desperate to access loans. But there’s a problem: most banks aren’t ready to lend.
The situation continues to deteriorate for Small business owners and their employees, as the program stated to assist during this unprecedented time, seemingly isn’t assisting millions of small business owners.
On Friday, the Small Business Administration’s Paycheck Protection Program loan applications were expected to be open and ready for small businesses around the country to get emergency, forgivable loans—intended to help them retain employees amid the COVID-19 crisis.
But as of Friday morning, only one big bank managed to start accepting applications: Bank of America.
The bank launched its portal for the small business loans on Friday, going live at about 9:00am ET, but the bank’s rollout offended many customers, as the bank seemingly singles out and certain small business owner, and is only assisting customers with online accounts who are active borrowers as of last month.
This is not a government requirement and some insist this is discrimination.
— George Anderson (@twitchis4) April 3, 2020
Requirements that the CARE Act itself did not state. The act lists requirements as:
“‘‘(G) BORROWER REQUIREMENTS.— ‘‘(i) CERTIFICATION.—An eligible recipient applying for a covered loan shall make a good faith certification— ‘‘(I) that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient; ‘‘(II) acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments; ‘‘(III) that the eligible recipient does not have an application pending for a loan under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan; and ‘‘(IV) during the period beginning on February 15, 2020 and ending on December 31, 2020, that the eligible recipient has not received amounts under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan. ”
By disregarding the legislation and creating their own rules..? How is that a “great job” ? pic.twitter.com/RstirK4UA7
— Kevin Walker (@KevinLWalker) April 3, 2020
The other of the big four banks—JPMorgan Chase, Citigroup, and Wells Fargo—hadn’t managed to begin accepting applications yet as of Friday morning, with a note on JPMorgan Chase’s website telling customers that “We aren’t accepting applications for this program at this time. Check back for updates,” at the time of the writing of this article. Wells Fargo also told customers online to “check back often,” and that “As soon as we can start accepting applications, we’ll add the link to the online application.”
Wells Fargo and Chase also have decided to disregard the actual legislation, and only service individuals that physically banked with them prior to February 15, 2020.