US Treasury to ask for another $200 bn for small businesses

Joanna Estrada
April 9, 2020

Some banks were accepting applications but not finalizing them because they lacked enough guidance from SBA and the Treasury about questions such as how payroll should be counted and how loans will be forgiven.

But the American Bankers Association praised the decision to increase funding for the program and said despite the early difficulties banks are working to process the loan applications as quickly as possible.

Bank of America, the first of the big banks to begin offering the loans last week, said Monday morning that it had received 212,000 applications seeking almost $36 billion.

No matter how you look at it, the almost $2.2 trillion bailout package passed by Congress and signed into law by President Trump late last month in a bid to stave off long-term economic disaster in the face of the coronavirus pandemic, adds up to a lot of money. County officials said they are now developing an application process and will post the application on its website when it becomes available. It offers loans of as much $10 million that convert to grants if firms use the funds to keep workers on their payroll and maintain salaries.

"There was overwhelming interest, and we are working person by person to get the information we need to input (by hand) the information into the SBA system", a spokesperson for JPMorgan Chase told FOX Business.

US Treasury Secretary Steven Mnuchin said Tuesday he is asking Congress to reinforce a new small business loan program that has been overwhelmed with applications. As of Monday, the SBA was still tweaking the program.

Training the bank's workforce and educating applicants on those rules. That amount hasn't been given to firms yet, but represents the value of loans SBA has registered and guaranteed for lenders to complete the process and disburse funds, according to a senior administration official.

Efficiently and successfully executing the program under "stay at home" orders and social distancing protocol.

"If you can't get the loan today or tomorrow, don't worry", he said. The department said all applications that have been submitted are now being reviewed in the order received.

McConnell said he will attempt to fast-track a vote on the additional funds for Thursday, as small businesses flood the three-day-old program seeking emergency relief.

McConnell also said it was clear the program needed more funding and called for rapid action from lawmakers.

The PPP loans, which allow a business owner to borrow up to 2.5 times their average monthly payroll expenses, "seem nearly too good to be true", he said, because of their generous terms.

In addition to the PPP, businesses may access Economic Injury Disaster Loans and the Louisiana Loan Portfolio Guaranty Program.

Many small businesses are also anxious that the amounts they are eligible to borrow will not be enough to help them survive the current crisis-by a large measure. A breakdown of each is here.

Other reports by Click Lancashire

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