by jochexum
So, this is all second hand obviously so take it with a grain of salt or ignore it outright if you wish.
But i have heard from multiple sources at big banks that they’re blaming lenders like Lendio for R1 PPP funds being exhausted and are asking the SBA to hold them accountable.
if youre not aware, Lendio (maybe others to a lesser extent) essentially gamed the system by applying with the SBA as soon as they received your application before doing any due diligence at all. essentially reserving your spot in line and THEN reviewing your docs for accuracy.
this wasnt how the SBA intended this process to work and isnt how the big banks have done it and now that they’re being eviscerated by the media, they’re looking for anyone to blame but themselves and Lendio and others have made themselves an easy target.
it would only be speculation, but given the amount of weight the big banks hold, i wouldnt be shocked if there were repercussions to Lendio and, as a result, those who applied with them.
if you are “pre-approved” through multiple lenders, i would consider pulling your Lendio app and sticking with another lender who has already performed the necessary due diligence and will fund you as soon as they submit your app to the SBA. that’s what i have done and what others have done.
also, you can read the multiple meltdown threads on this sub where those who were “approved” by Lendio still haven’t received funding and haven’t received any communication since being approved, while their SBA reservation is set to expire soon. At a minimum, it seems obvious that Lendio bit off more than they could chew by gaming the system as they did, and worst case, the SBA has told them to fuck off, no doubt due to pressure from big banks who have massive pull with the feds.
Disclaimer: This is a guest post and it doesn’t necessarily represent the views of IWB.