Mnuchin praises first day of small-business loan program — but applicants call it ‘confusion’ and ‘a scam’
The launch day of the highly touted $350 billion small-business loan program had a stuttering start Friday, from technical issues with bank websites to opaque lending rules that appear to qualify hedge funds to get aid, while some cash-strapped local businesses were shut out.
“I know there’s a lot of hard-working small businesses that couldn’t get their applications processed this week,” Treasury Secretary Steven Mnuchin acknowledged in an interview on Fox Business on Friday afternoon. “They shouldn’t worry about it. There’s plenty of time, there’s plenty of money left.”
“It’s been nothing short of a disaster. It’s been confusion at every turn,” said Grant Geiger, CEO of EIR Healthcare, which submitted a loan application Friday.
Geiger said he tried to apply via his company’s primary lender, Wells Fargo, but was told the bank probably wouldn’t be ready to start accepting applications until Monday. The website he was directed to turned out to be little more than a shell.
“We had our stuff yesterday ready to go. I’m still sitting here with my application,” Geiger told NBC News. “We have runway, but it only takes us so far.”
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Banks had already sounded the alarm late on Thursday, with senior executives at some leading banks telling NBC News that with just hours to go before launch, they were still awaiting final guidance from the Treasury Department.
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Even once the program went live at midnight on Thursday, borrowers found there was no standard application process. While Bank of America’s website rejected applicants who did not have an existing small business lending relationship with the company, Chase did not have the same requirement.
Bank of America started taking applicants at 9 a.m., but Chase didn’t open its online doors until 11 a.m. — then promptly crashed, before recovering a short while later. Wells Fargo said it was “working as quickly as possible to be ready,” but as of early afternoon had not started taking applications.
Social media quickly filled with complaints and dismay from disappointed small business owners.
“Are you kidding me @BankofAmerica with this requirement of having a credit card to apply for the PPP? What type of scam is this. I have been a loyal customer for years with my business accounts.#bankofamerica #PPPloan”
