Millions Of Small Businesses Stunned To Learn They Are Not Eligible For Bailout Loans t.co/7v54IhRU2o pic.twitter.com/24hQjtFxwp
— Spiro (@o_rips) April 4, 2020
It’s the first day that America’s small businesses can apply for the Treasury’s Paycheck Protection Program, i.e., the $350BN program that is part of the bigger $2 trillion bailout package designed to provide small businesses access to capital for payroll and other overhead costs to the tune of 2.5 months of average payroll and which must be accessed via an existing banking relationship – and the rollout is predictably a mess, with some banks such as BofA already accepting loans (which convert to grants if used exclusively for payrolls and business continuity purposes), while others like JPM delaying the roll out to 1pm; a third group of banks such as Wells Fargo has conspicuously failed to provide its rollout plans – perhaps it is scheming how to cross-sell bailout loans with auto insurance or engage in some other typically Wellsfargoian fraud.
Oh naturally they insist on having a checking account first, so they can start charging fees. Ghouls, they are, said Yoda.
— Jeff J. (@j2lovesfriday) April 3, 2020
But a recurring shock as millions of small business owners head to these bank websites to apply for the PPP funds is that contrary to the SBA’s guidance that any small business with 500 or less employees can apply, going to lender portals shows that only a very narrow subset of America’s millions in small businesses are be eligible.
Ridiculous. We’ve been with $BAC for 12 years and have “Platnium Honor” status on our business account and never needed money (from them or from other lenders) and now @BankofAmerica is just telling us ¯\_(ツ)_/¯ I guess we will go find another bank for our accounts.
— Thomas #raisethebar Fuchs (@thomasfuchs) April 3, 2020
In fact, only those companies that already have a lending relationship, i.e., an outstanding loan with a given bank are – at least as of this moment – able to apply for the rescue funds.
Bank of America’s website confirms as much, stating on its eligibility page that only “clients with a business lending and a business deposit relationship at Bank of America are eligible to apply for a Paycheck Protection Program through our bank.” In other words, any business that only has a deposit account and no loan or business card is out of luck.
