Small Business Loan Program Restarts, Runs Into Snags
NEW YORK (AP) — The second round of loan applications for the government’s small business relief program has been slowed by computer issues at the Small Business Administration.
Lenders complained Monday that they couldn’t get their applications into the SBA system known as ETran that processes and approves loans. The agency said it notified lenders Sunday that it was limiting the number of applications any lender could submit at once.
The SBA began accepting applications at 10:30 a.m. Eastern time for $310 billion in funding. The program’s initial $349 billion was exhausted in less than two weeks after more than 1.7 million loans were approved. That first round was also slowed by computer issues at the SBA,
Banks had thousands of applications ready to go Monday. Richard Hunt, president of the trade group Consumer Bankers Association, said the SBA’s announcement on application limits was too last-minute — bankers had already sent large batches of applications to the agency, not knowing that a new procedure was being planned.
“We learned at the 11th hour that SBA had changed its process. They could have told us well ahead of time,” Hunt said. He said the agency’s computers weren’t able to accept even the reduced number of applications per hour that it had planned.
The ETran system normally handles under 60,000 applications in a year and wasn’t built to handle the volume of applications it has been receiving this month.
The fresh round of funding was expected to go quickly because banks already had thousands of applications in hand and were accepting more as they waited for Congress to approve the additional money. If the new funds do get depleted, it’s feared that many companies will be shut out unless lawmakers are willing to approve a third round.
The loans offer forgiveness for the money owners spend on workers’ pay. Millions of workers lost their jobs as companies such as restaurants, retailers, gyms and entertainment venues were forced to close to curb the spread of the virus.
On Monday, bankers around the country were having trouble getting into the SBA’s system, said Paul Merski, a vice president at the Independent Community Bankers of America.
“Some have been trying all day since it opened,” Merski said. “It’s not different from what happened in the original launch.”
President Donald Trump was asked about the computer issues during a White House news conference.
“I heard there was a glitch. We’ll find out whether or not that’s so. Certainly it did work out very well for the original amount of money. This is the second amount,” Trump said. “We’re relying on the banks to go out and do an accurate job.”
Carol Wilkerson, a spokeswoman for the SBA, said that the agency had created a mechanism that slowed the pace of applications from any one lender at a time.
“If a lender goes above the pacing limit they will get timed out,” she said.
Kevin Freking contributed to this report from Washington.
In The News
NEW YORK — Consumer confidence grew in October, reversing three month of declines due to concerns over the spread of... Read More
NEW YORK — Consumer confidence grew in October, reversing three month of declines due to concerns over the spread of the delta variant of the coronavirus, the Conference Board reported Tuesday. The not-for-profit, non advocacy think tank said its proprietary Consumer Confidence Index currently stands at... Read More
WASHINGTON (AP) — The number of Americans applying for unemployment benefits fell last week to a new low point since... Read More
WASHINGTON (AP) — The number of Americans applying for unemployment benefits fell last week to a new low point since the pandemic erupted, evidence that layoffs are declining as companies hold onto workers. Unemployment claims dropped 6,000 to 290,000 last week, the third straight drop, the... Read More
WASHINGTON -- While economists warned about disruptions to the U.S. supply chain, Chuck Fowke told a congressional panel Wednesday about... Read More
WASHINGTON -- While economists warned about disruptions to the U.S. supply chain, Chuck Fowke told a congressional panel Wednesday about countertops. “If you can’t get the cabinets, you can’t put the countertops on,” Fowke said as he testified on behalf of the National Association of Home... Read More
WASHINGTON (AP) — Gina Raimondo only wears watches made by Bulova — a company that laid off her scientist father,... Read More
WASHINGTON (AP) — Gina Raimondo only wears watches made by Bulova — a company that laid off her scientist father, closed its Rhode Island factory and moved production to China in 1983. The watches give Raimondo, the U.S. commerce secretary, a sense of mission as President... Read More
WASHINGTON -- They’ve almost become as ubiquitous as scenes of weathermen and women leaning into the fierce winds of a... Read More
WASHINGTON -- They’ve almost become as ubiquitous as scenes of weathermen and women leaning into the fierce winds of a tropical storm during hurricane season. We refer, of course, to the daily television news footage of a reporter bobbing up and down in a decidedly modest... Read More
WASHINGTON (AP) — Inflation at the wholesale level rose 8.6% in September compared to a year ago, the largest advance... Read More
WASHINGTON (AP) — Inflation at the wholesale level rose 8.6% in September compared to a year ago, the largest advance since the 12-month change was first calculated in 2010. The Labor Department reported Thursday that the monthly increase in its producer price index, which measures inflationary... Read More