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Early on the second day of the reopened Paycheck Protection Program, a government-backed lifeline to help small businesses survive the coronavirus pandemic, bankers reported the online portal for submitting applications was still hampered by technical glitches.
Congress injected the loan program, an integral part of the federal government's massive economic stimulus effort, with an additional $310 billion for small businesses last week.
But "E-Tran,” the SBA’s electronic loan guarantee system, has been beset by technical errors and access issues since the second wave of funding for the low-interest loan program launched Monday. Although small businesses apply for the aid through banks, the SBA guarantees those loans and must authorize each one via "E-Tran.”
According to Richard Hunt, the CEO and president of Consumer Banks, banks worked overnight to help small businesses, processing on average 45 loans per hour, compared to the expected rate of 350 per hour.
“At this rate,” he wrote on Twitter, “we’d be at it for 51 days.”
Maria Amoruso, chief marketing officer at NexTier Bank, wrote on Twitter early Tuesday morning that she had been trying unsuccessfully to access E-Tran since it opened at 10:30 a.m. ET on Monday. In the 18 hours that she has tried to submit applications, Amoruso said she’s only managed to get five loans approved.
“I have not had a connection for longer than a couple minutes,” she said. “This is not the result of pacing. This is the result of a system that isn’t working.”
Some banks have thousands of applications to process for increasingly desperate customers trying to save their businesses. The design of the program adds to the urgency: Businesses are supposed to receive the forgivable loans on a first-come, first-serve basis.
By 3:30 p.m. ET, the SBA said it had processed about 100,000 loans submitted by 4,000 lenders. The agency acknowledged tech issues with the website, saying that “unprecedented demand” had slowed the system’s response times. Twice as many people tried to access the program Monday, compared to any period during the initial funding phase, according to SBA Administrator Jovita Carranza.
The program exhausted its initial $349 billion in funding within 13 days and was heavily criticized for granting multimillion-dollar loans to big, publicly traded companies — even as small businesses languished financially.
TD Bank CEO Greg Braca told FOX Business the bank has at least 26,000 applications in the queue for the second wave of aid.
“We’re very much focused on getting through the second round,” he said.
More than 26 million Americans, or about 16 percent of the nation, have filed unemployment claims since the virus outbreak forced a broad swath of the U.S. economy to shut down. The Paycheck Protection Program is one of the key federal initiatives to help insulate workers and the economy: If businesses use at least 75 percent of the loan they receive to maintain payroll, the government will forgive it.