Bank of America has announced a surge of applications for small business emergency funding under the $2.2 trillion virus relief bill, according to a report.
The commercial lender was cited by CNBC on Monday as confirming it received over 178,000 applications worth almost $33 billion, about 9.4 percent of the total available in the $349 billion Paycheck Protection Program.
Banks and other commercial lenders are points of contact for small firms seeking relief loans, which are administered by the Small Business Association (SBA).
This follows an April 5 update by Bank of America on Twitter, when it said it had received over 145,000 applications totaling $30 billion through the program, which is meant to help small businesses stay afloat and encourage them not to lay off workers amid the CCP virus pandemic.
A worker sits in an empty gift shop in New York City’s Chinatown on Feb. 13, 2020. (Spencer Platt/Getty Images)The Paycheck Protection Program, which is part of the CARES Act, got off to a rocky start on April 3, as many small business owners ran into red tape and technical roadblocks.
Some businesses found their bank wasn’t yet prepared to accept applications, and when they tried another bank, they were told that only established customers were being accepted.
“We know there will be challenges in the process,” said SBA Administrator Jovita Carranza at an April 2 briefing. “Our most important objective is to allow small businesses to keep their employees on board, and keep their businesses viable through this unprecedented disruption.”
A view of an empty restaurant is seen at Grand Central Station in New York City on March 25, 2020. (Angela Weiss/AFP via Getty Images)News of the surge in applications shows demand is high for the relief funds as businesses seek to stave off collapse amid the pandemic.
“This administration believes wholeheartedly that if you are a small business, you are a critical part of the economic fabric of this country, and your viability is critical to the economic well-being of your employees,” Carranza said.
“I will immediately ask Congress for more money to support small businesses under the #PPPloan if the allocated money runs out,” Trump said, referring to the Paycheck Protection Program.
President Donald Trump speaks in the press briefing room with members of the White House Coronavirus Task Force in Washington on April 2, 2020. (Win McNamee/Getty Images)The Paycheck Protection Program gives businesses low-interest loans of about 2.5 times their average monthly payroll. The loans will be fully or partially forgiven if businesses show that the money was used to retain or rehire employees and pay some overhead expenses through June 30.
“Nearly $350 billion in loans will be available to small businesses, including sole proprietors. These loans are up to 100 percent forgivable as long as employers keep paying their workers,” Trump said at an April 2 briefing, a day ahead of the program launch.
“Got to take care of your workers,” he said.
Bank of America was the first major lender to start offering the Paycheck Protection Program’s loans on April 3.
In its most recent earnings report, which covers the fourth quarter of 2019, Bank of America reported over $3 trillion in customer deposits and a profit of $7 billion.
