Failures and policy decisions by the federal Small Business Administration have left many New Hampshire bankers frustrated and unable to file job-saving loan applications for their customers.
During the second day of the renewed federal Paycheck Protection Program, freshly replenished on April 27 with $310 billion from Congress, banks of all sizes in New Hampshire have had little success submitting loan applications due to a regular lack of access to the Small Business Administration E-Tran system, the NH Bankers Association said. The system, through which all PPP loan applications must be filed, normally handles under 60,000 applications in a year and wasn’t built to handle the volume of applications it has been receiving this month. Despite working throughout the day on April 27 and April 28 and overnight in between, the trade group said, they only received “painfully slow” and intermittent access to the system.
“The current situation with the SBA’s E-Tran system is unacceptable. Although imperfect, the PPP has been successful in helping thousands of Granite State businesses who require aid, but so many more still require immediate assistance. Banks in New Hampshire are fighting to help businesses stay afloat 24 hours a day, 7 days a week, whether in administering PPP loans, or through traditional lending and other efforts outside of the federal programs,” association President Kristy Merrill said in a statement. “Now, New Hampshire is counting on the SBA and Department of Treasury to take immediate steps to fix this ongoing problem with the E-Tran system, improve communications on what their solution and plans are moving forward, and ensure that banks of all sizes can access the SBA system to secure funds on behalf of Granite State small businesses that are hurting and in desperate need.”
Without addressing any glitches, President Donald Trump said at a press conference with small business owners Tuesday that twice as many users had accessed the SBA’s processing system as on any day during the first round of funding, during which about 1.7 million loans totaling $349 billion were approved.
The SBA said Tuesday afternoon that about 476,000 loans had been approved totaling more than $52 billion. Trump said most of the loans approved were for smaller amounts, an indication that loans were going to smaller companies. The average loan during the first round of funding was $206,000.
Banks had thousands of applications ready to go Monday. Richard Hunt, president of the trade group Consumer Bankers Association, said the SBA’s announcement on application limits was too last-minute – bankers had already sent large batches of applications to the agency, not knowing that a new procedure was being planned.
“We learned at the 11th hour that SBA had changed its process. They could have told us well ahead of time,” Hunt said.
He said the agency’s computers weren’t able to accept even the reduced number of applications per hour that it had planned. Some banks across the country have reported being limited to a quota of applications per hour they could submit, but others reported changes that privileged the nation’s largest banks by allowing batches of up to 5,000 loans to be submitted at once. Bank of America, which submitted 184,000 applications by Monday morning and has tried sending in another 48,000 since then, has only seen 1,000 approved, according to a source familiar with the matter who spoke on condition of anonymity because they were not authorized to speak publicly about the process.
The fresh round of funding was expected to go quickly because banks already had thousands of applications in hand and were accepting more as they waited for Congress to approve the additional money. If the new funds do get depleted, it’s feared that many companies will be shut out unless lawmakers are willing to approve a third round.
The loans offer forgiveness for the money owners spend on workers’ pay. Millions of workers lost their jobs as companies such as restaurants, retailers, gyms and entertainment venues were forced to close to curb the spread of the virus.
The Associated Press contributed to this report.
