Local Banks Hit Speed Bumps As Race For Small Business Administration Loans Restarts
It's been another long, and in many cases frustrating, day for local bank employees trying to process loan applications through the federal government's Paycheck Protection Program (PPP).
Before the sun rose on Monday morning, Quincy Miller, president of Eastern Bank, said his staff had prepared some 2,000 applications to submit to the U.S. Small Business Administration's electronic loan processing system, E-Tran.
They soon learned, however, that the SBA was limiting the number of applications a single bank can submit each hour.
"We begin to submit, and then we get locked out of the system," Miller said. "And we have to wait until the beginning of the next hour to submit again."
The team soon noticed that the system seemed to be cutting them off at 80 applications per hour, so employees shifted their work schedules to try to submit as many loans as possible.
"We had a group work until 4 a.m., and the rest of the group came on a 4 a.m. and continued the process," Miller said. "As a banker, it's a challenge because we're trying to get this money to our customers as soon as possible."
A spokesperson for Santander Bank agreed that the limits of the SBA system were making the process of submitting loans "challenging." But, the representative said in an emailed statement, "we will work around the clock to secure funding for as many of our clients as possible."
On Monday morning, the SBA once again began accepting applications from banks for PPP loans, after Congress approved an additional $310 billion in funding for the program. Reports of confusion among borrowers and lenders soon followed, along with some on the banking side publicly venting their frustration.
The additional funds were approved after the initial $349 billion in PPP funding was depleted just under two weeks. The program has already faced criticism several reasons, including a lack of access for minority-owned businesses and loans granted to big companies instead of the small businesses the program was created to assist.
There are already predictions that this latest round of PPP funding will go quickly. For Eastern Bank, Miller said, every day brings a new wave of business owners in need of a financial life raft.
For some perspective on just how sharp the increase in demand for business loans has been, the bank said it had processed about 6,600 loans in the previous ten years.
By comparison, since the Paycheck Protection Program began in early April, the bank said it has received about 10,000 loan requests.
“It definitely has been frustrating,” Miller said of the application bottlenecks. “But every one we get done, we feel great about.”