The Trump administration said Friday that billions of dollars in loans have already been processed under a new program aimed at helping small businesses during the coronavirus pandemic, but not all banks have started accepting applications.
Small Business Administration (SBA) chief Jovita Carranza tweeted on Friday afternoon that more than 13,600 loan applications had been processed on the first day of the program, valued at over $4.3 billion.
Treasury Secretary Steven Mnuchin tweeted a previous update earlier in the afternoon, saying many of the loans were being processed by community banks.
The $349 billion Paycheck Protection Program, created under the $2 trillion coronavirus relief package President Trump signed last week, allows businesses with 500 or fewer employees to apply for loans to cover eight weeks of payroll and other expenses. The loans will be forgiven if businesses that receive them retain or hire back their employees.
The Treasury Department and SBA raced to get guidance out to applicants and banks prior to Friday, issuing interim rules on the program and the final application form Thursday evening.
Businesses and banks have been expressing interest in the program, but there have been concerns about whether its launch will be successful.
Bank of America on Friday morning became the first of the large U.S. banks to be ready to accept online applications, according to CNBC.
But Sen. Marco Rubio (R-Fla.), chair of the Senate Small Business and Entrepreneurship Committee, expressed frustration about reports that banks were restricting applications.
“I’m reading that some of the big banks, not all, but some, are creating all these crazy restrictions about you don’t just have to have a small business account with them, you might also have to have a credit card,” he said in a video message posted on Twitter. “So, let me just say this as nicely as I possibly can: Please don’t be a bunch of jerks, OK. When you needed the country to help you, they did. Now, the country needs you to help them, and we’re paying you to do it.”
Bank of America CEO Brian Moynihan said in a phone interview with CNBC Friday that the bank is focused initially on its “borrowing clients” and then will process applications for other customers. He said that Mnuchin and the banking industry want businesses to go to the banks they have previously borrowed from so that the applications can be processed faster.
In a memo to employees mid-day Friday, Dean Athanasia, head of consumer business at Bank of America, said that “is it is only Day 1 and I assure you that we will continue to enhance our Paycheck Protection Program to accommodate more and more of our small business clients.”
“In this first initial launch, we have focused on our full relationship clients first – those with a business DDA and lending relationship,” Anthanasia said. “We are also highly focused on responding to the needs of our core small business customers who do not currently have any borrowing relationship: we will expand our process soon and in the meantime, are addressing these through an escalation process.”
Athanasia said that the bank has already received more than $6 billion in applications from customers it already has a business relationship with, and has helped over 58,000 customers. A Bank of America spokesperson said Friday afternoon that the bank has now assisted more than 60,000 clients.
The American Bankers Association (ABA), which advocates for small, regional and large banks, noted that it will take some time for the program to function fully.
However, banks “stand ready to work in partnership with the federal government,” ABA CEO Rob Nicholas said in a statement late Thursday.
The credit union industry was also ready to help small businesses but still had some unanswered questions about the program, according to the Credit Union National Association (CUNA).
“Credit unions will now begin the complex task of successfully implementing a $350 billion rescue program from the ground up, and we’ll be working tirelessly to do so,” CUNA CEO Jim Nussle said in a statement.
Updated: 6:15 p.m.