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Some banks have warned clients they may not be ready to accept loan applications for the $350 billion Paycheck Protection Program Friday, but Treasury Secretary Steven Mnuchin said Thursday that the program will be ready to begin providing funds to small business owners Friday.
Mnuchin’s reassurances came after JPMorgan Chase & Co told business clients that it was still waiting on guidance regarding the program and advised that the bank might not be able to begin accepting applications on Friday as officials have promised.
“Financial institutions like ours are still awaiting guidance from the SBA and the U.S. Treasury,” the bank said in a note to clients. “As a result, Chase will most likely not be able to start accepting applications on Friday, April 3rd, as we had hoped.”
However, Mnuchin said that officials would make good on their commitment to open the program on Friday. He said some businesses would receive the money the same day, but “that doesn’t mean everybody is going to be getting their loan tomorrow.”
“We need to get money to small business and American workers, and that’s what we’re doing,” he said.
The program will provide forgivable loans to small businesses to cover payroll, insurance and day-to-day expenses. It was part of the coronavirus stimulus package approved by lawmakers last month. The goal is to keep workers employed and paid even as business drops amid pandemic-related social distancing.
“This relief will help stabilize a small business sector,” Small Business Administrator Jovita Carranza said.
Mnuchin said SBA and Treasury employees had been working nearly around the clock to ensure the program is ready to go on Friday as promised. He said the interest rate — being paid through the program’s funds, not business owners — had been raised to 1 percent after hearing feedback from community banks that were concerned they wouldn’t make enough off the loans to justify servicing them.
If the program runs out of funds as some experts have said is likely, Mnuchin said officials would return to Congress seeking more money beyond the initial $350 billion.
“A lot of people are going to have their businesses built back up, I hope,” President Trump said.
Mnuchin also said coronavirus relief checks would start going out sooner than previously promised — in two weeks, instead of three, for Americans with direct deposit on file with the IRS or Social Security Administration.
Also, Americans who don’t normally have to file tax returns won’t need to file them as had reportedly been considered, Mnuchin said. Instead, officials will put up a website where people can submit their information, or the government will mail out checks as a last resort. Either way, it will be a matter of “weeks, not months” for Americans to receive their relief money, according to Mnuchin.
“I am assuring the American public,” he said. “They need the money now.”