State’s largest small business lenders unable to take applications on Friday
Delaware banks are preparing for a surge in Paycheck Protection Act applications after not having systems in place on Friday, the first day of the program.
The Small Business Administration reported on Saturday that nearly 13,700 loans with a value of more than $4.3 billion were issued under the Paycheck Protection Program.
The program will offer $350 billion in loans aimed at companies paying their employees during the coronavirus crisis.
The emergency program was rolled out Friday. Lenders had expected glitches in attempting to handle what was expected to be feverish demand.
Three of the largest Delaware banks in the business loan market were apparently unable to take applications.
The program relies on lenders to handle the federally guaranteed loans. However, there were reports of lenders having trouble logging on to the SBA portal, Axios reported.
The banking industry reportedly struggled with SBA guidance in getting their systems up to speed.
M&T, the largest full-service bank in Delaware and a top SBA lender, reported will be able to handle requests from existing customers for Paycheck Protection Program loans beginning Monday.
Applications will be limited to customers with M&T checking accocunts. It suggested that others check out their lenders or contact the SBA.
Wilmington-based WSFS, which merged last year with Philadelphia’s Beneficial, first announced that it would not be ready to handle applications until later this week.
On Sunday, it announced that it will be able to take applications on Monday for existing customers.
Wells Fargo issued the following via Twitter on Saturday.
Our Online Banking Small Business customers can start the process for a Small Business Paycheck Protection Program (PPP) loan through our online tool. We’ll email you with next steps within a few days. To get started and for more info go here:
— Wells Fargo (@WellsFargo) April 4, 2020
In a controversial move, Bank of America put its existing customers at the front of the line. It is now handling applications from customers who don’t have a relationship with another bank, Fox Business reported.
B of A indicated that it has helped 122,000 small business clients apply and taken in more than $27 billion in applications. “We have expanded the process to address the needs of a larger group of Small Business clients,” the financial services giant stated in a social media post.
National Federation of Business President Brad Close issued the following after a turbulent first day for the program:
“We are hearing from far too many small businesses, today, that they are being shut out of the Paycheck Protection Program forgivable loan program. Small businesses make up half of our economy and employ nearly half of all workers, but this has the potential to be the last straw for many small businesses and their employees.
“We urge banks and government agencies to get this problem solved immediately, so they can stem the tide turning against small businesses and their employees.”
Over the weekend, the SBA stressed that faith-based organizations could apply for assistance after some confusion emerged over eligibility.