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Businesses Await Money From SBA Loans  04/07 06:15

   NEW YORK (AP) -- Small business owners hoping for quick loans from the 
government were in a holding pattern Monday --- waiting on their bank to either 
take their application or, if it did, send them the money. 

   Business owners began submitting applications to banks, credit unions and 
other financial institutions late last week, or at least trying to. If 
successful, owners received notifications that their applications had been 
received, but for many, there was no further word by Monday afternoon.

   Two of the nation's largest banks, J.P. Morgan Chase and Citibank, aren't 
yet set up to take applications. That leaves their small business customers to 
worry that the $349 billion the government has budgeted for the relief loans 
will run out before they can apply.

   Lori Ames emailed Chase on Friday, the first day applications were being 
accepted for what's called the Paycheck Protection Program, part of the 
government's $2 trillion coronarvirus rescue plan. She was still waiting Monday 
for an opportunity to apply.

   "In the meantime I've filed my application via (online loan marketplace) 
Lendio because at the rate Chase is going, by the time they accept applications 
the allocated money could be gone," says Ames, owner of The PR Freelancer, a 
publicity firm located in Babylon, New York.

   The loans are being approved and guaranteed by the Small Business 
Administration. While the agency released loan application statistics 
throughout the day Friday, it did not do so Monday; when asked for the reason, 
the agency did not immediately respond.

   Banking industry officials have said the slowdown in getting funds to 
customers has mostly been on the SBA's side, although they said the government 
was making progress. SBA Administrator Jovita Carranza tweeted Monday afternoon 
that Bitty & Beaus Coffee, a Wilmington, North Carolina-based coffee shop 
chain, had received loan money. But many other owners were waiting.

   Huntington Bank, the largest SBA lender by volume, said it got 16,000 
applications for loans over the weekend. The bank did 35,000 applications for 
SBA loans in 2019, said bank CEO Steve Steinour.

   "It's been a tsunami of applications," Steinour said. 

   While there's been a flood of applications, funds have yet to get to most 
businesses. Huntington expects to be able to fund the loans and disburse the 
proceeds to businesses Monday night or Tuesday morning. 

   Tanya Rutner Hartman applied over the phone with Huntington for a loan for 
her company, Gilded Social, a retailer of formal wear and bridesmaids' dresses 
in Columbus, Ohio. She was still waiting on a promised call from an underwriter 
Monday afternoon.

   Hartman is keeping her two staffers on the payroll although her business is 
closed. She has enough cash for another 2 1/2 weeks, but is hoping to get the 
loan money much sooner.

   "So long as it comes through, I'm going to be OK. I'm trying to not panic 
until I have to panic," she said. 

   Karen Kerrigan, president of the advocacy group Small Business & 
Entrepreneurship Council, said small businesses and bankers still have too many 
questions about the lending process.

   "We know there are limitations to government, and that the program was 
executed very quickly. Hopefully the friction and problems with the system and 
rules will get worked out," she said.

   Another big bank had its own unique issue. Wells Fargo said it did $10 
billion in loan applications over the weekend __ and it's maxed out. Wells is 
under lending restraints from the Federal Reserve after a series of scandals 
--- it has been fined $3 billion so far for opening about 3 million accounts 
without customers' approval. So, many owners who applied for loans through 
Wells were disappointed.

   The Fed announced a program Monday that will allow banks to sell the SBA 
loans on their balance sheet to the Fed, hopefully freeing up additional funds 
for banks to keep making additional loans. This should allow Wells Fargo, one 
of the largest SBA lenders, to make more loans.

   The Fed said plans to announce details of its own lending program for small 
businesses this week.

   The paycheck protection loans are separate from economic injury disaster 
loans the SBA is processing. Many owners are still waiting for those loans, 
which have more requirements and can take several weeks to process. Under the 
government's rescue package, a company that gets a paycheck loan cannot use a 
disaster loan to cover its payroll.

   Some owners could take the delays in stride. 

   Steve Sherman is running his lighting fixtures manufacturing company in 
Sandwich, Massachusetts, on his own at reduced hours after laying off four 
employees, including a son and a nephew, on March 23. He is hoping for a loan 
of around $25,000 to eventually bring them back. 

   His bank, Santander, told him Friday that a system "wasn't up and running 
yet." Now, the earliest he can apply is Wednesday, the bank says. 

   "I guess they want to make sure they do this right, ducks in the row or 
whatever you want to call it," Sherman says. 

   Other owners were frustrated with the conditions the banks put on loans. A 
number of banks were demanding owners be established customers, with deposit 
accounts and loans in order to apply. That prevented many from applying.

   Paul Hollowell was turned down by three separate banks Friday because he 
didn't have the right combination of accounts. Finally, an officer at BBVA, 
where he has a loan, opened a closed branch so Hollowell could open a deposit 
account and apply for a loan. 

   Hollowell owns Lux, a company with two tanning salons and 16 employees in 
Dallas. He's had to close down and has no revenue coming in, and is waiting to 
hear about when he'll receive the money.

   "It was definitely a full 24 hours of phone calls and frantic emails," he 


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