Wells Fargo, Citigroup and PNC said they were still reviewing the program’s rules, which were released by the Treasury Department and Small Business Administration just hours before the program’s launch. JPMorgan Chase, the country’s largest bank, didn’t begin accepting applications until 1 p.m., after initially saying it wouldn’t be ready at all Friday.
Bank of America was one of the few big banks that began taking applications Friday morning, earning the praise of President Trump. “Great job being done by @BankofAmerica and many community banks throughout the country. Small businesses appreciate your work!,” Trump said on Twitter.
But the Charlotte-based bank faced backlash from some customers for initially limiting its application pool to businesses with which it already had a lending relationship. “I have worked hard not to have a lot of debt, I feel like I am getting penalized,” said Don Allensworth, whose company, the NewGround Group, has fewer than five employees. “We’re on the border right now; there is no way to know what the next 90 days will hold, for my clients and for my income.”
The emergency lending fund, known as the Paycheck Protection Program, is a cornerstone of the $2.2 trillion economic rescue package Congress passed last week. The Trump administration rushed the program’s development, promising small businesses would receive loans the same day they made their applications, an unprecedentedly quick turnaround for a government-backed lending program. But the guidelines for the program were not finalized until late Thursday night.
The new loans “will bring immediate economic relief and financial certainty to millions of small businesses & their employees,” SBA administrator Jovita Carranza said on Twitter Friday afternoon.
Carranza and Treasury Secretary Steven Mnuchin reported nearly 13,000 applications had been processed, adding up to more than $2 billion in loans, by Friday afternoon. The SBA did not answers questions about how much money had been disbursed.
“The system is up and running,” Mnuchin said in a tweet, crediting community banks with pushing hundreds of loans. “Great work!!”
Paycheck Protection Program loans are designed to be particularly favorable to borrowers, with ultralow interest rates, no payments for the first six months and the opportunity to have the loan completely forgiven if employees can be kept on the payroll throughout the crisis. And the loans will apply to a broad swath of the U.S. business community, including sole proprietors and independent contractors.
Reports that the program was getting off to a rocky start frustrated some lawmakers.
“Please don’t be a bunch of jerks. When you needed the country to help you they did,” he said, referring the 2008 global financial crisis when banks took billions in taxpayer bailouts. “Now the country needs you to help…