Big Banks Blocked From Small Business Loan Applications For 8 Hours

Apr 29, 2020, 8:40 PM | Updated: 8:51 pm

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.

KSL 5 TV Live

Top Stories


Associated Press

CDC drops traveler health notices for individual countries

The CDC is doing away with notices about the COVID-19 risk of visiting specific countries.
4 days ago
CHICAGO, ILLINOIS - SEPTEMBER 09: A pharmacist prepares to administer  COVID-19 vaccine booster sho...
Jed Boal

University Health recommends getting omicron booster and flu shot now

The CDC approved the COVID-19 bivalent boosters that target the most recent omicron variants on September 1. Since then, tens of thousands of Utahns have rolled up their sleeves.
11 days ago
FILE: Pfizer-BioNTech COVID-19 (left) and Moderna COVID-19 (right) vaccines are seen at a vaccinati...
Jed Boal

Despite reaching 5,000 deaths, Utah’s COVID-19 numbers are down

The director of the World Health Organization said yesterday about COVID-19, “the end is in sight,” even if we are not there yet.
22 days ago
FILE PHOTO (Photo by Al Bello/Getty Images)...
Associated Press

WHO: COVID end ‘in sight,’ deaths at lowest since March 2020

The head of the World Health Organization says the number of coronavirus deaths last week was the lowest reported number in the pandemic since March 2020, marking what could be a turning point in the years-long global outbreak.
22 days ago
A school classroom with chairs and desks...
Brooke Williams

Project to provide air purifiers in Utah K-12 classrooms

Cleaner air improves student performance, decreases COVID transmission and school absenteeism. New project provides air purifiers for classrooms in Utah.
23 days ago
SHANGHAI, CHINA - JULY 08: People walk by a closed store at a neighborhood designated as a medium-r...
Laura He, CNN Business

Zero- COVID-19 at what price? Chinese researchers are treading on sensitive ground

Authorities in Shanghai have denied a report by a leading Chinese real estate research firm that claimed more than a third of shops in a major mall had been shuttered because of strict COVID-19 curbs.
25 days ago

Sponsored Articles

Hand turning a thermostat knob to increase savings by decreasing energy consumption. Composite imag...
Lighting Design

5 Lighting Tips to Save Energy and Money in Your Home

Advances in lighting technology make it easier to use smart features to cut costs. Read for tips to save energy by using different lighting strategies in your home.
Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Ask these questions before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Cloud storage technology with 3d rendering drawer with files in cloud...
PC Laptops

How backing up your computer can help you relieve stress

Don't wait for something bad to happen before backing up your computer. Learn how to protect your data before disaster strikes.
young woman with stickers on laptop computer...
Les Olson

7 ways print marketing materials can boost your business

Custom print marketing materials are a great way to leave an impression on clients or customers. Read for a few ideas to spread the word about your product or company.
young woman throwing clothes to organize a walk in closet...
Lighting Design

How to organize your walk-in closet | 7 easy tips to streamline your storage today

Read our tips to learn how to organize your walk-in closet for more storage space. These seven easy tips can help you get the most out of your space.
Big Banks Blocked From Small Business Loan Applications For 8 Hours