Banks trying to submit applications for thousands of small businesses seeking coronavirus relief loans have hit a bottleneck for a second day at the Small Business Administration
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NEW YORK —
Banks trying to submit applications for thousands of small businesses seeking coronavirus relief loans have hit a bottleneck for a second day at the Small Business Administration.
Banking industry groups said Tuesday the SBA’s loan processing system is still unable to handle the volume of loan applications from business owners trying to get aid under the Paychceck Protection Program, part of the government’s $2 trillion coronavirus aid program. The SBA has said the slowdown is due to its attempts to limit the amount of loans any bank can submit at one time. But some banks say they’re not able to get any applications into the system.
“Today is just another slow, frustrating slog for getting PPP loans through,” said Paul Merski, a vice president at the Independent Community Bankers of America.
Businesses are seeking loans from a $310 billion second round of funding aimed at helping them retain workers or rehire those who they laid off in response to the virus outbreak. Restaurants, retailers, gyms and other businesses were forced to shut down to try to contain the virus’s spread, and other companies have seen a steep drop in revenue as customers stayed home or cut back their spending.
The $349 billion first round of funding was exhausted in less than two weeks after the SBA approved 1.7 million in loans. That initial round was also slowed by computer issues at the SBA. In this round, banks have reported that they were being allowed to submit only 350 applications an hour, if that many. Meanwhile, they have thousands on hand.
“Banks continued to try and submit applications around the clock but were often told they had reached their hourly limits after just minutes,” Nick Simpson, a spokesman for the Consumer Bankers Association, said Tuesday.
The SBA did not immediately respond for a request for comment Tuesday. On Monday, SBA head Jovita Carranza tweeted that the agency had approved 100,000 loans.