Bank of America Disses Many Small Business Applying for Relief Loans

Yolanda Curtis
April 4, 2020

U.S. Rep. Brian Mast said there is no such requirement in the Payroll Protection Program approved by Congress and President Trump.

The program didn't launch without any hurdles, though. "It's just a lifeline". An expansive definition of "small business" in the law means that it will be open to much more than just Main Street shops as lenders start processing applications. Earlier this week, he extended that to continue through May 4.

The hobby charge is 1% for a time period of years and there are no loan bills required for 365 days after the loan is granted.

The SBA also is continuing to offer more conventional loans that it normally provides, Nelson said.

The PPP floats the nation's drowning small business community with $349 billion worth of forgivable loans to cover operational expenses for the next two months. Forgiveness will be reduced if full-time employment declines, or if salaries and wages decrease. Millions of small businesses are expected to apply for a desperately needed rescue loan Friday, a stern test for a banking industry that has had less than a week to prepare for the deluge. Lobbyists are pushing the Small Business Administration to interpret the law generously to help sectors devastated by mandatory business closures and stay-at-home orders, possibly making the aid available to global fast food and lodging giants and allowing individual owners to get around a $10 million cap on loans.

Nic Makris, the 36-year-old owner of two bars and restaurants in Washington, D.C., said he was not sure if his businesses could stay afloat even after the lockdown is lifted. "That's something that's in the process. Here's what we are doing NOW to improve this now while preserving IT infrastructure security", SBA wrote, adding they were running a "script to enable all lenders that previously had an account with Capital Access Financial Systems" to be "automatically reactivated".

Gordon Denlinger, Pennsylvania director for the National Federation of Independent Business, which advocates for the interests of the state's almost 13,000 small businesses, said his organization "is grateful to the state for providing the low-interest loan program even if the money didn't last long because it provided a bridge for those small businesses needing a quick fix of cash to stay afloat".

The size of the stimulus package is unprecedented for the SBA, which is on its third administrator under Trump and is already showing signs of strain in carrying out the task.

Currently, conventional corporations or LLCs are permitted to apply, but Nelson said, as soon as next week, contractors, self-proprietors and those who are self-employed will be able to apply.

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Liberty Bank in Middletown, Conn., had set aside $5 million to make unsecured personal loans of up to $5,000 to customers who have lost incomedue to the economic fallout from the novel coronavirus.

Nelson said lenders will look at monthly payroll to provide loan amounts.

It has also drawn criticism from Florida Senator Marco Rubio, who chairs the Senate Committee on Small Business and Entrepreneurship.

In addition to drawing consternation from lenders and small business owners, the rollout is coming under fire from Republican Senators Josh Hawley of Missouri and Ted Cruz of Texas for what they said were restrictions on churches and religious noprofits.

More information can be found about the SBA program here. As long as you use 75 percent of money for those purposes, the other 25 percent can be used for rent, utilities and interest service.

"The private and public sector must work closely together to ensure that small businesses and their workers across the country are put first", Carranza said.

Loans carry 0.5% interest and are available retroactive from February 15 so employers can rehire laid-off employees through June 30.

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