Small businesses should apply to multiple banks in order to boost their chances of receiving a loan through the Paycheck Protection Program, “Shark Tank” investor Mark Cuban told CNBC on Friday.
“If you’re a small business and you happen to bank at a big bank, it’s OK to go find a small community bank and apply there as well,” the billionaire entrepreneur said on “Squawk Box.” “There’s no rules against having multiple applications. You just can’t take multiple loans.”
He also said the only fair way to operate the Paycheck Protection Program, or PPP, is through a lottery.
Cuban previously been critical of the roll out of the PPP, warning that some banks were leaving small businesses “out in the cold.”
Banks of all sizes have said the government’s loan-entry portal has caused delays in dispersing loans through the program. Some banks have said they will prioritize PPP applications from existing customers.
The program, established in March as part of the government’s $2.2 trillion coronavirus aid package, has seen overwhelming demand and many small businesses have said they’ve been unable to receive funds. The initial $349 billion allocated for the program was used up, but Congress has since approved an extra $310 billion.
Cuban, who owns parts of many small businesses through “Shark Tank,” suggested on Friday that all applications go into a repository at the Treasury Department, which would randomly select a certain quantity of loans to approve. “They see what the total is, and however much money left they have, they go to the next 50,000 until the money is gone,” he added. “That’s the only way to be objective and fair.”
— Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” on which Mark Cuban is a co-host.