Not even 10 minutes after a government relief loan program for small businesses relaunched on Monday, lenders reported that the U.S. Small Business Administration system was overwhelmed and inaccessible with a flood of applications.
Lenders from across the country were saying they couldn’t get into the SBA’s system when the
That echoes the first round of the program, when lenders found themselves repeatedly locked out of the loan platform. Concerns about the SBA’s ability to handle a flood of new applications, as well as how long the additional funding for the program will last, and whether struggling mom-and-pop shops will get the aid they need, are the biggest concerns as the program restarted Monday with an additional $320 billion in funding. Congress
An SBA spokesman said the agency notified lenders on Sunday that it would pace the rate of applications into its E-Tran system, meaning that all lenders should be able to submit at the same rate. The pacing mechanism prevents any one lender from submitting thousands of loans into the system at once, and a lender that goes above that limit will get timed out of the system, the spokesman said.
The Biden administration once again extended the pause on student loan payments enacted to help borrowers during the COVID-19 pandemic, this time through the end of August.
The two states' combined plans amount to over $1.5 billion of the Homeowner Assistance Fund included within the American Rescue Plan Act , which was passed a year ago.
An uptick in pandemic-related payment suspensions reflecting new or restarted plan activity previously occurred as the omicron variant spread, but activity has since subsided.
The program allows for loans of as much as $10 million per borrower and is meant to help small businesses affected by the coronavirus pandemic keep workers on their payrolls. The loans become grants if companies use them for payroll and approved expenses for two months.
The initial program, which launched April 3, was marred by delays and glitches after guidance on how to process loans wasn’t released until the night before, and many
Even before the first new application is processed Monday, advocates
The SBA and U.S. Treasury Department have sought to avoid pitfalls from the first round. They issued
Companies including Shake Shack and the operator of Ruth’s Chris steak houses are returning their loans, adding millions of dollars back to the program. Congress also set aside $60 billion for small financial institutions with $50 billion or less in assets to ensure better access for smaller firms.
Still, large banks including Wells Fargo and Bank of America have been preparing to submit
To ensure access for all of the more than 5,000 lenders approved to participate in the program, the SBA
