Big Banks Blocked From Small Business Loan Applications For 8 Hours
SALT LAKE CITY, Utah – Small banks were given a short window of time Wednesday to submit loan applications for the Paycheck Protection Program without competing with large banks, according to the Small Business Association.
The SBA announced that for eight hours Wednesday, ending at 10 p.m. MDT, it would only accept loans from small institutions with less than $1 billion in assets.
“Those smaller banks don’t have as much resources to spend on technology,” said Howard Headlee, president of the Utah Bankers Association. “So they’ve got folks sitting at computers entering these in and that puts them at a disadvantage to the larger institutions.”
The break for small banks comes amid growing frustrations about computer glitches as companies compete for the $310 billion allocated for the program’s second round of funding.
Utah Congressman Ben McAdams echoed those complaints on Wednesday as he demanded more transparency and oversight of the loan program, saying the application process went from bad to worse.
“Over the past few days the phones in my office have been ringing off the hook and, quite frankly, I’m alarmed at the stories I’m hearing from small businesses who are trying to access these critical loans and keep getting put to the back of the line,” the Democratic representative said.
McAdams said small banks are being kicked out over and over again from the SBA’s computer system.
“They can’t help but wonder if this program is rigged to put them to the back of the line so well-connected, big banks and big customers get the loans at the expense of the little guy,” he went on to say.
McAdams sent a letter to the Treasury Department and the SBA on April 28, asking that they produce a list of the businesses receiving the loans.
The letter claimed banks were dealing with constantly changing guidelines on how to upload loan applications and uncertainty about when they are approved.
“To date, SBA and Treasury have failed to provide relevant information to Congress to ensure proper oversight of taxpayer funds and failed to provide transparency to American small businesses,” McAdams wrote.
McAdams ended his letter asking for an immediate response. In response, a regional communications director for President Donald Trump’s reelection campaign released a statement blaming Democrats for the lapse in funding.
“Ben McAdams can pretend he cares about small businesses, but the fact of the matter is he allowed Nancy Pelosi to delay critical Paycheck Protection Program funding that Utah small businesses needed for 12 days while thousands of Utahns filed for unemployment,” said Samantha Zager, a spokesperson for Trump Victory.
As of Tuesday night, the SBA said it had already approved nearly 476,000 loans that added up to more than $52 billion in loans. That’s in addition to the $349 billion in loans approved during the first batch of funding.
In Utah, banks processed more than 21,000 applications during the first round of funding—totaling more than $3.5 billion in loans, according to the Utah Bankers Association. For the second round of funding that opened up this week, banks in the Beehive State already had 18,000 applications ready to be submitted.
The Associated Press contributed to this article.
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