AnonymousBy Joan Oliver
The federal government announced funding for small businesses last week as part of the CARES Act (Coronavirus Aid, Relief, and Economic Security).
The biggest aid is the Paycheck Protection Program (PPP) where the government will grant funding for small businesses to keep their employees on the payroll and the loan will be forgiven if it’s used for those purposes. Small businesses were encouraged to go to their lender, or bank, and apply starting Friday, April 3. Well, the majority, if not all, small businesses did apply and now their bank is turning them away.
My niece owns a small business in Santa Barbara County. She went to her small, local bank and was turned away because they received “too many applications.” On the same day the application period opened, this bank closed down its application period. It’s unclear when they closed it but my niece tried to apply before noon, so somewhere within 4 hours.
This bank, the one that has numerous commercials touting how involved they are in helping small local businesses, is now turning their own customers away without any help. The only offer was to check with other banks. My niece called every bank in town and they are only accepting loans from their own customers that opened business accounts before February 15.
I understand this has put a lot of stress on banks and based on the low interest and forgiveness, they won’t be making any money off the loan, but what else are local business owners supposed to do? They can’t go to another lender, they’re stuck with their bank who is refusing to help them. The banks should accept an application from every single one of their business customers and then determine who qualifies and who doesn’t. Turning their own customers away will result in more financial hardships for our local residents and small business community that was already suffering.
Now is the time to help, just like the banks say they do in their promotional videos and press releases.
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There is more to this story. The government announced the Cares Act several days before they gave the parameters to the banks. The banks got slammed with applications. Even today the banks haven’t been given rules. Most local bankers worked all last weekend and will this weekend (including me). SBA loans are specialized so there are limited amounts of staff that can process these loans.
Keep in mind that business have to apply for the loan. Doesn’t mean they will get the loan. If a business is just about going under at the time of Covid closings, they would likely not qualify for a loan in the first place. Keep trying for your business sake, possibly some funding will be freed up due to others not being able to qualify.
It’s an overload of applications with not enough funding. Unfortunately, politics, as with the bill that funded this, are getting in the way. I just don’t understand how funding this isn’t more important than adding other nonrelated stuff to it. I know it’s our political system… The whole we’ll only pass a much-needed bill if we can add all this random partisan stuff to it crap pisses me off. This time is not as bad as the last bill or most, but still frustrating. Just get it done and if your needed funding is worthy, pass it on its own measure.
This is the nature of the American free enterprise system since Bill Clinton and his cronies, working in conspiracy with the Wall Street banks, coopted it. When we allowed banks to venture into the speculative market for their own profits and “deregulated” them from accountability to the people, they have just pushed further into the pig slop. The big banks are being prioritized by the FED and the Treasury Department. Wells Fargo, the most corrupt bank of recent decades got billions which it immediately handed out to its biggest customers leaving the Small Businesses in limbo. This is what happened the last time (remember TARP). Greed will never be sated. All we can hope for is a Monty Python moment with gluttony explodes on itself.
Your right . Wells Fart – Go is the worse most corrupt Banking institution in the World . I never could understand how they can still be in business .Ripping people off, even their customers i guess .
That’s rough, try to take some solace in the fact that her application would not have been reviewed anytime soon by the bank anyway even if they did let her apply avger the 4 hour mark. Unfortunately this is a good lesson of “early bird gets the worm” – there are a ton of birds and not many worms right now. Have your niece call the bank again and ask if they plan on opening applications again once they finish processing the batch they accepted.
Why don’t you name the bank? If they truly did these things then the public pressure may cause them to do better. But if you don’t your story is unfounded.
The Federal Government does not work for the people silly. They work for the money, the really big money. Duh.————————————————– If you vote for the GOP, this is exactly what you voted for. Remember, these are people who hate government, who voted for people who hate government (ironically, to run government… ) and they, through sheer will, pure incompetence and willful ignorance, undercut government and destroyed 100 years of safety nets and security. Its pretty simple. ————————————————————– America = where the super rich convinced the uneducated and poor that they’re just like them, just not rich, yet! Trump suckers are a special kind of sucker. While its sad to watch this play out, the people got what they deserve. If you dont vote, you get the worst possible outcome. Vote, its really not that hard…