Banks and credit unions say they are having trouble submitting loan applications to the federal government for the second round of the Paycheck Protection Program. Small businesses in Connecticut and New York were largely excluded from the first round of the $350 billion loan and grant program.
Bankers are more hopeful that this latest round of funds, $310 billion administered by the Small Business Administration, will go to actual small businesses this time. The problem is, once the SBA’s web portal opened on Monday morning, it crashed. Repeatedly.
“Some credit unions have had no luck, so far other credit unions have had some luck. I suspect the system is just bogged down with thousands of financial institutions,” said Bill Mellin, CEO of the New York Credit Union Association.
Congress set aside $60 billion just for smaller banks and credit unions. The hope is that this would prevent large companies from soaking up all the money first. Several large banks have already said that it has more applications than it can successfully process. Mellin says with this latest round, banks are prioritizing their prior customers ahead of new customers.
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