SBA computer system crash entangles PPP loan process

0

The Paycheque Protection Program (PPP) introduced on April 3 is seeing more and more setbacks as the Small Business Administration (SBA) struggles to fix problems with the computer system, according to a report at Politico on Monday April 6.

The PPP is a $ 350 billion small business loan program that is part of the $ 2,000 billion Coronavirus Aid, Relie and Economic Security Act (CARES). Loans will be canceled if businesses continue to pay their labor.

Banks are struggling to meet the demands of businesses looking for SBA-backed loans. A myriad of issues, including technical issues, have been going on since the program was launched.

The SBA’s computer system failures have added to the problems faced by lenders as they attempt to maintain minimum balance sheets while meeting high demand for loans. The computer problems stemmed from the SBA’s “E-Tran” system used to authorize loans.

“Throughout the day there were ups and downs,” Rebeca Romero Rainey, President and CEO of Independent Community Bankers of America. “It’s been the experience since everything went online.”

The Trump administration lobbied to launch the program on Friday, April 3, but only a handful of banks were able to start processing the loans.

The SBA system also required documents that banks “didn’t feel they had to provide,” industry sources told POLITICO.

Additionally, lenders do not have a template for a critical SBA form and they also have many questions about salary costs that have gone unanswered.

Mark Hesser, president of Pinnacle Bancorp in Omaha, Nebraska, said his team “worked all day and night over the weekend to review information from borrowers.”

“Now we’re just waiting for the SBA,” he said.

Grapevine, Texas-based Bank of the West President Cynthia Blankenship said, “Things are always super crazy.”

“It’s like a binge eating with the banks participating to try to get into the SBA portal to get the necessary permissions on each client,” Blankenship said. “I hope that we as community banks are not in the back of the queue and that the bigger banks come in and take the clearances first.”

Bank of America would have been the first big bank able to take digital applications for PPP.

——————————

NEW PYMNTS DATA: SELF-SERVICE SHOPPING ROUTE TODAY – SEPTEMBER 2021

On: Eighty percent of consumers want to use non-traditional payment options like self-service, but only 35 percent were able to use them for their most recent purchases. Today’s Self-Service Shopping Journey, a PYMNTS and Toshiba Collaboration, analyzes more than 2,500 responses to find out how merchants can address availability and perception issues to meet demand for self-service kiosks.


Source link

Leave A Reply

Your email address will not be published.