The Paycheck Protection Program, a new effort intended to help small businesses combat the economic fallout from the coronavirus, is working through technical snafus, confusion about available lenders, and questions about the costs its loans will cover — all of which have made the application process more challenging.

Since it launched on Friday, the program — which includes $349 billion in funding for forgivable loans to small businesses and nonprofits — has seen a deluge of interest: According to White House economic adviser Larry Kudlow, 178,000 loan applications were being processed as of Tuesday morning. And that figure doesn’t include the small businesses that are still searching for lenders to accept their applications after many larger banks, including Bank of America and Chase, limited their pool to existing customers.

Agency officials are working to increase access to the program and offer more clarity about the application criteria, according to Sen. Marco Rubio (R-FL), the chair of the Senate Small Business Committee.

“When you launch something this unprecedented and far-reaching just seven days after it becomes law there will inevitably be problems,” Rubio said in a statement this weekend. “The good news is that every problem we saw ... can be fixed.”

Access is perhaps one of the largest issues to come up: Although some businesses were able to apply swiftly on Friday, others were initially turned away by institutions like Bank of America because they didn’t have an existing credit line or loan with the bank. (Bank of America has since updated its policy to allow checking account holders to apply in the wake of significant public pushback, but new clients are still barred from applying.)

Just another small business owner screwed by @BankofAmerica 13 years of doing business with BOA ends today. Denied application bc of no line of credit with them. All the 30 other banks I've contacted are serving their customers first. Shame on you. #BoA #bankofamerica #PPP pic.twitter.com/I1WSqN1G6q — K.C. Bugg, Psy.D. (@Drkcbugg) April 3, 2020

As Rep. Don Beyer (D-VA) called out in a tweet, Bank of America was far from the only institution that offered customers a surprising message when they attempted to apply on Friday — with both Citi and Capital One indicating that their applications weren’t even open yet.

Yesterday @stevenmnuchin1 stood at the White House podium and assured American small business owners that the Paycheck Protection Program "will be up and running tomorrow."



Here's what small business owners are looking at right now when they try to get PPP loans from banks: pic.twitter.com/8SOKCA8y4Z — Rep. Don Beyer (@RepDonBeyer) April 3, 2020

In addition to access to the program, a larger question that’s emerged about PPP is whether Congress has allocated sufficient money to meet the immense need that small businesses and nonprofits have. There are 30 million small businesses in the US, and the funds that were dedicated to PPP in the recent stimulus package don’t seem like they’re nearly enough. As Kudlow’s statements on Tuesday indicated, fewer than 200,000 loans have been processed so far.

“Funding of $349 billion is frankly inadequate for the magnitude of need in the American small business community and is likely to run out quickly,” the Independent Community Bankers of America recently wrote in a letter to the Treasury Department. Lawmakers, including Senate Majority Leader Mitch McConnell, have said they plan to push for more funds as soon as this week. According to a White House pool report on Tuesday, Treasury Secretary Steven Mnuchin has requested an additional $250 billion.

Good news on #PPP. @senatemajldr is working with @SenSchumer & hopes to approve additional funding by voice vote during the Senate’s pro forma session this week on Thursday 9 April.



We will need at least another $200-$250 billion for #PPPloan — Marco Rubio (@marcorubio) April 7, 2020

Officials are working on broadening access to these loans

Soon, the Treasury Department is expected to make moves aimed at broadening access to PPP loans as well. Specifically, it’s set to roll out more applications to online lenders, including PayPal, to participate in the program, according to Rubio. Other banks and lenders could get approved in the coming weeks as well.

This effort is intended to ensure that more institutions are able to respond to the flood of inquiries — and that more people have institutions where they can apply. According to Bank of America, it’s already received applications from more than 177,000 small businesses in the past few days.

“The pure volume of applications that are being submitted to lenders is incredible,” says Don Stevens, a small-business expert at the financial advisory firm CohnReznick. “As you bring on potentially new online lenders, they are going to add resources to the system that help process this information and get the applicants’ information to the SBA for final approval.”

For context, the SBA typically processes about 800,000 loan applications a year, according to Forbes — so the number of businesses that are applying for support now is of a scale that’s far different than what the agency and banks are used to.

The approval of new lenders will be an important step to open up this program to more people, especially as several of the large banks curb the types of applications they’re willing to consider.

Bank of America has limited the businesses that could apply to the program to those with existing checking and credit accounts. Wells Fargo has already stopped accepting any applications because it’s hit the threshold of funds it would be able to lend via the program. Others like Chase, TD Bank, and Capital One, are limiting the applications they’re accepting to customers who’ve opened some type of account at that bank before.

This approach means that many small businesses could be shut out of the process by large, national lenders.

“If banks only serve their customers, then the very businesses that may need access to the PPP program most will be left out in the cold, no question,” Enhanced Capital Group CEO Michael Korengold told the Wall Street Journal. Minority-owned business are less likely to have existing accounts at these banks and could experience more obstacles in obtaining these loans as a result, the WSJ notes.

To identify which banks are taking applications, businesses can check out a tool on the SBA website as well as the agency’s list of active 7(a) lenders — though neither of these services currently indicates which banks are open to new clients. Experts also advise businesses to contact their local Small Business Development Center, Women’s Business Center, or SCORE, which all include experts who will provide free guidance via phone.

Stevens notes that regional community banks would potentially be more open to new clients, and urges businesses to contact some of these institutions as potential options. Not all banks are able to participate in this program at this time, however — the SBA’s tool indicates exactly who has been approved. An example of a regional bank that’s taking new clients is the Bank of Southern California. Fundera, an online loan broker, has a list of banks and their requirements on its website as well.

Questions remain about several other aspects of the program, including the timing of the approval process for both PPP and the Economic Injury Disaster Loans (EIDL), another loan program that includes a $10,000 forgivable grant.

Thus far, Stevens notes that his clients haven’t been able to receive a status update on where their EIDL grant applications stand beyond an acknowledgment that they’ve been submitted and received. The timing of the PPP loans is tied more directly to banks’ ability to approve them.

Lawmakers say they intend to approve more money for small businesses

Beyond some of the operational problems that have emerged, there’s a larger issue looming over the PPP program: There’s a major concern about whether the money that was allocated in the recent coronavirus stimulus package is enough to tide businesses over for the duration of the outbreak.

Increasingly, lawmakers are acknowledging that it’s not.

“Based on demand, it is clear that Congress will need to appropriate additional money for this program,” said Rubio in a statement. In an estimate he posted on Twitter, Rubio suggested that PPP would run out of funding by June 6.

Eighth issue is money. Based on the demand we saw on Day One it is clear we will need more money for #PPP by late May.



Our rough estimate is that if 2/3 of the lenders that will participate in #PPPloans aren’t up & running yet,the $349 billion will run out around 6 June. 12/13 — Marco Rubio (@marcorubio) April 4, 2020

As Vox’s Ella Nilsen has reported, both House and Senate leaders are now in support of a fourth stimulus package that could closely resemble the one lawmakers approved two weeks ago. Among the elements it may include are more money for direct payments as well as more funding for small businesses in order to help organizations cope with the massive, ongoing fallout from the coronavirus response.

Lawmakers could move as quickly as this week to approve more money for small businesses, specifically.

Given that President Trump has also acknowledged the need to provide more funding for small businesses, some congressional effort seems likely to succeed, with the only question being how much the next package allocates for those in need of PPP relief funds.

I will immediately ask Congress for more money to support small businesses under the #PPPloan if the allocated money runs out. So far, way ahead of schedule. @BankofAmerica & community banks are rocking! @SBAgov @USTreasury — Donald J. Trump (@realDonaldTrump) April 4, 2020

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