What the heck? It's not the amount of money they're loaning - it's who they're loaning it to. (Or, more grammatically correct: to whom they're loaning it.)The relaunch of the federal government's massive small business rescue faltered on Monday, with banks reporting they were unable to move forward with a backlog of hundreds of thousands of loan applications amid widespread technical hurdles.
Several bankers and other industry representatives said lenders were struggling to submit Paycheck Protection Program applications through the Small Business Administration's systems, which reopened Monday morning. The program had been shut down since April 16, when its initial $350 billion in funding was exhausted. Last week, Congress approved another $320 billion.
But many lenders expect even the replenished fund to last only days because the program has proven to be extremely popular. The government-backed loans carry a 1 percent interest rate and can be forgiven if businesses agree to maintain their payroll.
The rescue is under intense scrutiny after several large companies with access to financial markets were able to secure tens of millions of dollars from big banks in the first wave.
The SBA's "E-Tran" system was prone to crashes and overloading during that first round of the program, and the agency made a rare public admission Monday that it was slowing down again because of unprecedented demand. The SBA announced it was "pacing" applications as it tried to manage the deluge. The agency began to impose new restrictions on the volume of loans banks can submit, a change that it only conveyed to banks on Sunday — fueling confusion that has dogged the effort ever since its hurried April 3 launch.
Politico
Still doesn't make sense. Lenders in some areas will have more requests for loans than other areas. Capping each the same is absurd.As it faced a barrage of new loan applications, the SBA on Monday tried to throttle the amount of incoming loan volume coming from any one lender.
On Sunday, hours before the program was set to launch, the agency told lenders it would be pacing applications and would cap at $60 billion the amount that a single bank could submit.
Par for the Trump admmnistration where the people in positions of power are ill-qualified to hold them."Our member banks across the country are deeply frustrated at their inability to access @SBAGov's E-Tran system," American Bankers Association CEO Rob Nichols said on Twitter Monday afternoon. "We have raised these issues at the highest levels. Until they are resolved, #AmericasBanks will not be able help more struggling small businesses."
[...]
[The SBA] told lenders they could submit applications in bulk, first setting a 15,000 loan minimum on Sunday and then lowering it to 5,000 by Monday afternoon.
The agency decreased the threshold after Sen. Sherrod Brown (D-Ohio) told the Trump administration in a letter that the 15,000-loan minimum "appears to favor large lenders over smaller financial institutions.
Urged. Not required."Unprecedented demand is slowing E-Tran response times," the agency said. "Currently, there are double the number of users accessing the system compared to any day during the initial round of PPP. SBA is actively working to ensure system security and integrity while loan processing continues."
[...]
In addition, the SBA told some banking industry representatives that it planned to limit incoming applications to 350 loans per bank per hour, according to sources familiar with the matter, though some lenders were in the dark Monday morning. An agency spokesperson discouraged POLITICO from using the number but declined to clarify further.
Banks expect the demand for the loans to outpace funding and that the program will be exhausted again as soon as this week. In an attempt to stretch out funds and address concerns about money going to big firms, the Trump administration last week urged publicly traded companies to return loan funds they received.
...but hey, do what you want...you will anyway.
UPDATE:
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