As we know, Friday, April 3, 2020 was the first day for small businesses to be able to apply for the Paycheck Protection Plan (PPP) with some big banks rocking and rolling and some others slow to get out of the blocks.
Slow Start
As of the morning of April 3, Bank of America was the only big bank to start accepting applications. In fact, the bank has reportedly already received nearly 60,000 PPP loan applications worth $6 billion since 9 a.m. ET Friday morning. That morning, the other of the big four banks — JPMorgan Chase, Citigroup and Wells Fargo — had not yet managed to begin accepting applications on Friday morning.
JPMorgan Chase’s website initially told customers that “we are not accepting applications for this program at this time. Check back for updates” but started accepting applications by midday Friday. Wells Fargo also told customers online to “check back often” and that “As soon as we can start accepting applications, we will add the link to the online application.”
There is only $349 billion available in the whole program and from what GHJ understands from the SBA, the PPP process is on a first come, first served basis.
On Saturday morning, JPMorgan Chase was still having issues processing the thousands of PPP applications it received through the online portal that went live Friday, according to an executive familiar with the process.
The Issue
Experts suggest the problem is not tied to these banks’ systems, necessarily — it stems from the lack of clear guidance from the government about the program’s requirements and the lack of a streamlined way to transfer information from the bank’s customers to the Small Business Administration (SBA) on day one.
Right now, on the front end, the bank’s online portals are taking thousands of applications, but the applications are getting stuck because the backend requires bank representatives to call each applicant for more information.
Wells Fargo accepted $10 billion in applications over the weekend and had to change its acceptance process only to borrowers with fewer than 50 employees or 501(c)3 applicants. They may or may not reload and have more to offer, but are referring customers to other lenders.
That is because the front-end online application has been streamlined to the most basic questions, which do not give the bank enough information to complete the SBA form. As a result, a bank rep has to call each applicant.
We have also had news trickling in from applicants that loans have been approved, loan docs are heading out the door and funds should be deposited shortly.
If you have any questions, please reach out to GHJ’s COVID-19 Response Team to assist with PPP loans or any other aspect of the CARES Act or COVID-19-related questions.
