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Agencies
Washington
US President Donald Trump said on Saturday he would ask Congress for more money to make loans to small businesses struggling with the economic fallout from the coronavirus outbreak if the original $349 billion allocated in a fiscal stimulus bill runs out.
“I will immediately ask Congress for more money to support small businesses under the @ppploan if the allocated money runs out,” Trump wrote in a post on Twitter.
The launch of the small business bailout fund has been rocky since it opened on Friday morning.
Tens of thousands of businesses have swamped lenders, community bankers have complained of an inability to access the Small Business Administration (SBA)’s system and the Treasury Department was still issuing updated guidance and form templates on Friday afternoon.
As of Friday evening, lenders originated more than 17,000 loans valued at about $5.4 billion under the program, Jovita Carranza, the administrator of the Small Business Administration, said in a tweet.
Citibank’s website on Friday morning featured a message asking customers for patience because of high call volume, and said it was not yet making loans. “While we are working as quickly as we can, we are not yet able to accept applications for the Paycheck Protection Program.”
The programme is intended to give lenders the ability to make fast, low-interest-rate loans to businesses with fewer than 500 employees - a segment that contributes more than 40 percent of US gross domestic product, and employs some 60 million people. The US Treasury will back loans of up to $10m to cover about eight weeks of payroll and some other expenses such as rent and utilities.
It’s a key part of the administration’s plan to keep the US economy from diving into a depression, and is designed to keep people off of unemployment. Millions of applications are expected on Friday.
But lenders have complained in recent days that the Treasury and SBA have not provided clear guidance about their liabilities and responsibilities, or functioning technology to process borrowers.
In addition, the fine print of some bank terms can
also prevent individuals from getting the assistance they desperately need at the moment.
For instance, lenders offering 90-day forbearance on mortgage payments are limited in how they can structure help for customers whose loans are owned by investors.
Mortgage-bond holders are still requiring monthly payments even if borrowers do not pay. Banks have been willing to foot the bill for a few months, but will ultimately need cooperation from investors.
Some customers are finding they are expected to write a big cheque as soon as the grace period ends, rather than having missed payments tacked onto the end of the loan.
Nearly 10 million Americans have already filed jobless claims. Some economists expect the unemployment rate eventually to spike as high as 12 percent in the coming months and second-quarter US economic output to fall as much as 40 percent from a year earlier.
Washington
US President Donald Trump said on Saturday he would ask Congress for more money to make loans to small businesses struggling with the economic fallout from the coronavirus outbreak if the original $349 billion allocated in a fiscal stimulus bill runs out.
“I will immediately ask Congress for more money to support small businesses under the @ppploan if the allocated money runs out,” Trump wrote in a post on Twitter.
The launch of the small business bailout fund has been rocky since it opened on Friday morning.
Tens of thousands of businesses have swamped lenders, community bankers have complained of an inability to access the Small Business Administration (SBA)’s system and the Treasury Department was still issuing updated guidance and form templates on Friday afternoon.
As of Friday evening, lenders originated more than 17,000 loans valued at about $5.4 billion under the program, Jovita Carranza, the administrator of the Small Business Administration, said in a tweet.
Citibank’s website on Friday morning featured a message asking customers for patience because of high call volume, and said it was not yet making loans. “While we are working as quickly as we can, we are not yet able to accept applications for the Paycheck Protection Program.”
The programme is intended to give lenders the ability to make fast, low-interest-rate loans to businesses with fewer than 500 employees - a segment that contributes more than 40 percent of US gross domestic product, and employs some 60 million people. The US Treasury will back loans of up to $10m to cover about eight weeks of payroll and some other expenses such as rent and utilities.
It’s a key part of the administration’s plan to keep the US economy from diving into a depression, and is designed to keep people off of unemployment. Millions of applications are expected on Friday.
But lenders have complained in recent days that the Treasury and SBA have not provided clear guidance about their liabilities and responsibilities, or functioning technology to process borrowers.
In addition, the fine print of some bank terms can
also prevent individuals from getting the assistance they desperately need at the moment.
For instance, lenders offering 90-day forbearance on mortgage payments are limited in how they can structure help for customers whose loans are owned by investors.
Mortgage-bond holders are still requiring monthly payments even if borrowers do not pay. Banks have been willing to foot the bill for a few months, but will ultimately need cooperation from investors.
Some customers are finding they are expected to write a big cheque as soon as the grace period ends, rather than having missed payments tacked onto the end of the loan.
Nearly 10 million Americans have already filed jobless claims. Some economists expect the unemployment rate eventually to spike as high as 12 percent in the coming months and second-quarter US economic output to fall as much as 40 percent from a year earlier.
