Saturday, 06 June, 2020

Bankers to work through the weekend processing PPP loan applications

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Ginger Lawrence | 04 April, 2020, 07:20

The banks will need time to review and implement the guidance and it isn't clear whether enough lenders will sign on to the program to fill the need, Huston said.

Some customers are finding they are expected to write a big cheque as soon as the grace period ends, rather than having missed payments tacked onto the end of the loan. Every big restaurant and hotel chain is going to be going after this money. "Business owners are sort of scrambling to make sure they can get a spot in line".

"There are bound to be problems", Senate Majority Leader Mitch McConnell told McClatchy this week.

However the PPP, which will be handled by the Small Business Administration (SBA), is not the only option. We want to hear about your experience. On Tuesday, the U.S. Treasury said it plans to be able to fund the loans by today, but lenders are anxious they won't have enough capital to fund the demand and are asking how they'll be able to replenish capital - and how quickly.

The $349 billion in loans Treasury Secretary Steven Mnuchin is hoping to move quickly through that program is 12 times the $28.1 billion in loans the SBA approved in all of fiscal 2019.

On Wednesday, Washington bank groups including the powerful Independent Community Bankers of America scrambled to raise their concerns with the administration and warned banks would not be able to participate until they were fixed, according to the sources and public letters.

"I suspect banks have already developed lists of clients that they know are going to be interested in this and they've probably started prepping applications", Benton said.

Virginia Sen. Mark Warner, a top Democrat on the Senate Banking Committee, tweeted that he had heard directly from lenders saying there were delays in the system. It will provide capital to businesses without collateral requirements, personal guarantees or SBA fees with a 100 percent guarantee from the SBA.

"Small business lending, in general, is not really a money-making enterprise".

The second largest USA bank by assets became the first major bank to accept applications for the massive small-business rescue program approved by Congress last week.

NY mayor begs for more U.S
More than 366,000 New Yorkers across the state filed for unemployment by the week ending on March 28, according to the U.S. And he said overburdened hospitals in hard-hit downstate areas have begun transferring patients north to the Albany area.

Community banks have processed hundreds of small-business loans meant to address the economic calamity caused by the coronavirus pandemic, even as some of the biggest banks in the country say they're not ready to process applications. "So, let me just say this as nicely as I possibly can: please don't be a bunch of jerks, OK".

It's up to banks to these distribute funds, not the federal government.

"It's a simple, common application and you don't have to go to your bank to get it", says BRAC President and CEO Adam Knapp, who has reallocated more than half his staff to fielding calls and providing assistance related to the program.

Small businesses, which employ about half of U.S. private sector employees, have been hit hard during the outbreak of the new coronavirus, which has caused cities to shut down non-essential businesses.

"In many cases, the bank where they are a customer tells them they're not doing it, forcing them to try elsewhere and they're running into that issue - that they're not an existing customer".

Mnuchin announced at the briefing that the SBA would bump up to 1% the interest rate lenders may charge small businesses under the relief program after lenders complained that the previous rate of 0.5% was below their own cost of funds. "They're also calling us directly, nearly all with some version of the same issue".

The challenge to this point has been the lack of solid guidance from the SBA to banks in administering the loans.

"How insane is this?" said Robyn Schultz, who operates Quality Electric, a commercial light industrial electrical company based in Birmingham, Alabama, that her husband's family has run for more than 50 years. It created funding for the Paycheck Protection Program to relieve small businesses across the country.

Beyer urged banks to lend anyway.

Congress made the program as wide as possible. "We have to get this right", he said.