Raleigh, North Carolina – Small business owners are struggling to complete the Paycheck Protection Program loan application process.
The $350 billion program, part of the massive federal stimulus package to help the struggling US economy weather the pandemic, provides loans to small businesses affected by the coronavirus outbreak to help them keep workers on the payroll.
“Lots of complaints about not being able to submit – either because their bank isn’t ready, or because other banks are only accepting current customers, or because mixed information is being shared online,” Lewis said. Sheats, associate vice provost for entrepreneurship at North Carolina State University. in an email.
Rich Baldyga, who owner of Monster Tree Service in the Triangle, said he managed to get a request to his bank, Wells Fargo, on Saturday just before the bank stopped taking requests.
“Now we’re waiting again and we don’t know if there’s anything we need to do,” Baldyga said on Monday. “I accessed my Wells Fargo account today just to see if there was an update or message but nothing so far.”
Wells Fargo can no longer accept applications due to a $10 billion loan cap. The Federal Reserve capped the bank’s lending as punishment for creating fake accounts in 2018.
Charlotte-based Bank of America, by contrast, had processed 177,000 applications for a combined $32.6 billion as of Monday morning.
“We’ve been told that a number of small businesses have encountered issues with the small business loan process,” said Rick Smith, editor of WRAL TechWire. “Now that’s not surprising given how big it was and how quickly it was launched.”
Most major banks began the process on Friday, a week after President Donald Trump signed the $2.2 trillion stimulus package.
“What I’ve been told is that the blockage is not on the small business administration side, but on the banking side, where they have to dot all the i’s and cross out the t’s to make sure all information is legitimate,” Smith said. .
Scot Wingo, a serial investor who is now chief executive of car care start-up Get Spiffy, said the company’s car washes had been closed for more than a week.
“We were only able to submit it today,” Wingo said of his loan request. “The bank is behind the technology to handle this, in our understanding.”
“Fustrated, rage, shock – all of the above,” said Tobi Walter, a member of the investment team at Cofounders Capital, a venture capital firm in Cary, to characterize the reactions of startups who applied for loans. the U.S. Small Business Administration’s Paycheck Protection or Catastrophe Loan Program.
Some Wells Fargo customers applied, kept “refreshing” when the bank made its web portal available, gave up, then later found out that Wells Fargo had briefly opened the portal, but the $10 billion it had were already engaged, Walter said.
The SBA also changed some of the criteria for disaster loans and told applicants they had to reapply, he added.
All that clutter just means more waiting for people like Baldyga.
“I have a hard time planning as a business owner,” he said. “The unknown is a little frustrating.”