The Small Business Administration (SBA) reopened the Paycheck Protection Program (PPP) Monday at 10:30 a.m., once again offering a pipeline for small-business loans and grants. The reopening, however, echoed the previous efforts by the administration to support small businesses with a chorus of complaints from borrowers and lenders alike regarding delays and systems failures holding up the approval process.
The SBA’s electronic loan portal was soon overwhelmed by demand and the situation was only made worse by last-minute changes in guidance on how to submit applications. The banking community expressed their frustrations openly with the developing situation. Rob Nichols, president of the American Bankers Association, wrote on Twitter that bankers were “deeply frustrated” and that “we have raised these issues at the highest levels.”
Seeking a smoother process than was seen on April 3, when the first installment of PPP began, the SBA released on Sunday steps aimed at preventing system glitches and a smoothing of distribution of funds among participating banks. Early Monday, banks across the country began processing loans but then reportedly found that the SBA’s portal became unresponsive within an hour of opening and remained down the rest of the day.
As part of this smoother process, the SBA asked banks to submit applications in batches of 15,000 loans when its ETran loan portal opened. By midday, however, the allowable batch size was cut to 5,000, to address complaints by smaller banks that they were cut out of the process by the minimum. The SBA acknowledged some problems with its systems but said that by 3:30 p.m. it had processed 100,000 loans submitted by 4,000 lenders. It did not say how much of the $310 billion had been allocated through those loans, however.
“Unprecedented demand is slowing E-Tran response times,” Jovita Carranza, SBA administrator said in a tweet on Monday, adding that twice as many users were accessing the loan-processing system Monday afternoon, compared with any day during the initial round of the PPP. “The SBA is actively working to ensure system security and integrity when loan processing continues” she wrote.
President Trump acknowledged the issues with the SBA website at a White House briefing Monday, and said, “I heard there was a glitch,” and that he would “find out about that.”