Small businesses that rushed in vain to tap $349 billion in emergency U.S. loans to survive the coronavirus crisis are facing a harsh reality: Some of the nation’s top banks lagged behind relatively tiny rivals in handling applications.
As banking giants tried to automate the process, hundreds of employees at Texas lender Cullen/Frost Bankers Inc. volunteered to fill out forms manually, working late into the night in homes to set up $3 billion in loans. That contrasts with Wells Fargo & Co., which arranged only about $120 million by the time the program was depleted this week, according to people briefed on its progress.
Such figures, just starting to trickle out of U.S. lenders, are bound to fuel more anger over the chaotic Paycheck Protection Program administered by the Small Business Administration. They show the nation’s top bank, JPMorgan Chase & Co., arranged more loans than any other, as one would expect. But it was only several billion dollars ahead of some firms a fraction of its size.
The surprising success rates of regional and community lenders suggest businesses across the country got money based on which bank they happened to pick, rather than just how early they got in line. Many entrepreneurs were desperate to get assistance from the first-come, first-served program and were devastated this week to learn they won’t get help unless Congress allocates more funding.
“It’s a real emotional process,” said Reese Howell, chief executive officer of Celtic Bank in Utah. “They are wondering how they pay their employees and how they will stay in business.”
Wells Fargo said in a statement Friday it moved as quickly as possible to get loans for clients while trying to comply with the program’s requirements. It promised it’s ready to help the moment Congress allocates more funding.
Socially distanced bikers and walkers, against a backdrop of the Queen Mary, make their way along pedestrian and beach bike path on the first day that Long Beach reopened the path on Monday May 11, 2020. The city of Long Beach eased a few of its public health restrictions, allowing under certain guidelines the reopening of pedestrian and beach bike paths, tennis centers and courts. Beach bathrooms are also reopening, but the parking lots and beaches still remain closed.
(Genaro Molina/Los Angeles Times)
Traffic remains light on the southbound 110 Freeway headed toward downtown Los Angeles on April 28.
(Robert Gauthier / Los Angeles Times)