Small business owners struggling with the loan application process :: WRAL.com
Raleigh, North Carolina – Small business owners struggle 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 is not ready, other banks only accept current customers or mixed information shared online,” said Lewis Sheats, vice president entrepreneurship assistant at North Carolina State University. in an email.
Rich Baldyga, who owner of Monster Tree Service in the Triangle, said he managed to send a request to his bank, Wells Fargo, on Saturday just before the bank stopped taking requests.
“Now we are waiting again and we don’t know if there is anything to do,” Baldyga said on Monday. “I went to my Wells Fargo account on my website today just to see if there was an update or a message, but nothing at the moment.”
Wells Fargo can no longer accept applications due to a $ 10 billion loan limit. The Federal Reserve capped the bank’s lending as punishment for opening fake accounts in 2018.
In contrast, Charlotte-based Bank of America had processed 177,000 requests for a total of $ 32.6 billion as of Monday morning.
“We have been told that a number of small businesses have encountered issues with the small business lending process,” said Rick Smith, editor of WRAL TechWire. “Now that’s not surprising considering its size and how quickly it was launched.”
Most of the major banks began the process on Friday, a week after President Donald Trump enacted 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 put all the i’s and cross the t’s to make sure that all information is legitimate, ”Smith said. .
Scot Wingo, a serial investor who is now managing director of auto maintenance startup Get Spiffy, said the company’s car washes have been closed for more than a week.
“We were only able to submit it today,” Wingo said of his loan application. “The bank is behind the technology to handle this is our understanding.”
“Pissed off, rage, shock – all of the above,” said Tobi Walter, member of the investment team at Cofounders Capital, a Cary venture capital firm, in characterizing the reactions of startups who applied for loans. the U.S. Small Business Administration’s Disaster Loan or Paycheck Protection Program.
Some Wells Fargo customers applied, continued to “freshen up” 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 available were already committed, Walter said.
The SBA has also changed some of the criteria for disaster loans and told applicants to reapply, he added.
All this clutter just means no more waiting for people like Baldyga.
“I am difficult to plan as a business owner,” he said. “The unknown is a little frustrating.”