With thousands of small businesses lining up across New Hampshire to access $349 billion in federal rescue loans on the morning of April 3, many faced difficulties being ready to process the applications thanks to tardy government guidance. 

The program, called the Paycheck Protection Program, or PPP, has been billed as a critical emergency measure intended to keep afloat both businesses that have suddenly closed due to the pandemic and those suddenly facing a loss of revenue.  

Interest in the program matched the scale of the country’s economic crisis: Bank of America alone said 75,000 small businesses across the country had applied to it for $7 billion of loans on the first day, and the Small Business Administration said on the afternoon of the program’s launch that it had approved more than 12,460 loans valued at $3.9 billion. 

The PPP was created a week earlier as part of the $2.2 trillion CARES Act economic aid package. The U.S. Small Business Administration and Treasury Department had released information about the program’s details over the course of the week, some of which had changed. The final interim rule governing the PPP was posted to the Treasury Department website on the evening April 2. 

Confusion, Delays Hit Some 

Because of the tight timeline, however, some banks were ready to start accepting loans while other banks, large and small, complained they hadn’t received the details of the program from the Treasury soon enough to be ready for the launch morning. 

Even those banks accepting applications were limiting them to current customers. Bank of America, for example, said it only took applications from customers who had business deposit accounts and business loans with the bank. 

“While the commitment by our banks to fully implement the PPP program is strong and ongoing, the initial deployment was not easy due to late arriving federal guidance and challenges accessing SBA’s system,” NH Bankers Association President Kristy Merrill said in a statement. “Notwithstanding these early federal challenges, our bankers will continue working tirelessly to provide support, relief and funds to New Hampshire’s eligible small businesses every day and as quickly as possible. 

Eastern Bank President Quincy Miller said the afternoon before the program’s launch that he had been hearing from small business customers all week about the program and expects high participation. 

Because Eastern Bank planned to accept applications digitally, it would need time will to update system coding to accommodate the SBA’s final guidelines. Miller expected no more than a few days to prepare the system, depending on the guidelines’ complexity. 

Even though it wouldn’t be ready to process applications April 3, Eastern decided to get a head start on the program, Miller said, by collecting information from small businesses. 

“If we can start the ball rolling, we can build the queue up, get as much info as we need, and then reach out to customers to get additional information once the guidance is finalized,” he said. 

The delays some banks faced in collecting and processing applications for PPP loans will likely lead to delays in the disbursement of funds to businesses.  

Fintechs Offer Help 

To help banks process the flood of applications, some fintechs are offering their services, including one Portsmouth-based firm offering a product for free. 

Bottomline announced Friday it was offering a technology platform for simplified loan origination, specifically tailored to the SBA application requirements. The platform provides banks with digital business account opening, fraud management and onboarding platform, free of charge, to banks serving small business customers, helping them deliver digital access to the critically needed SBA guaranteed funding programs.  

“It’s an effort to save jobs,” CEO Rob Eberle told The Registry Review. “If a small business has a relationship with a bank that doesn’t have a capability to take in this major influx of applications, they’re not going to be able to take advantage of those loans.” 

With intensive work, Bottomline’s free product can be ready to go at a bank within 24 to 40 hours, Eberle said. The key is that the software is only an onboarding and document collecting tool that doesn’t require any integration with a bank’s core provider. 

“Without this they’re relying on fax or something else,” he said.  

As the nation emerges from the immediate public health crisis, Eberle said, fintechs like his could be poised for more growth.  

Rohit Arora, CEO of fintech platform Biz2Credit that connects small businesses with lending sources, agrees. He sees the current crisis as an opportunity for fintechs to work with the federal government on their loan initiatives. He said fintech tools can analyze small business cash flow, watch for trends and manage risk – all critical when lending federal money.   

“It’s the biggest challenge alternative lenders have seen after the 2008 crisis, but it can also become the biggest opportunity that financially sound alternative lenders can have,” Arora said.  

Material from the Associated Press was used in this report.