The total loans approved nationwide amount to nearly $248 billion so far, the documents indicate, for just over 1,035,000 loans approved nationally.
The Paycheck Protection Loans are a lifeline to struggling small businesses. They are forgiveable to the extent that businesses retain their workers during the COVID-19 pandemic.
EARLIER:
A lifeline to small businesses may be close to running out.
About $220 billion in loans from the federal Paycheck Protection Program (PPP) have been approved, leaving about $130 billion remaining in the popular but rapidly shrinking fund. That number includes funds banks have processed and the Small Business Administration (SBA) has approved, though customers may not have received.
In fact, the program may have about a week or so left before depletion, said a spokesman for the Ohio Bankers League (OBL).
RELATED: Fifth Third deluged with 33K paycheck protection loan applications
“The way it’s going, we’re probably looking at somewhere in the region of another week,” JT Thurston, OBL spokesman, said Tuesday.
However, he noted that Congress is negotiating another $250 billion for the program, an amount for which banks are lobbying.
The federal loans — part of $2.2 trillion in overall federal assistance — are forgiven to small businesses to the extent that they retain workers and keep their lights on during the COVID-19 pandemic. Some businesses have been effectively closed by government edict, or their customer count has been impacted dramatically by stay-at-home orders.
For perspective: Typically, the SBA awards $28 billion in business loans a year, across all of its programs. (That was the amount loaned in the most recent fiscal year, according to the OBL.)
Now, the SBA is doing that daily.
“That’s being pushed out the door in a day. It’s a colossal program,” Thurston said.
According to a new Ohio Bankers League (OBL) survey of members: OBL member banks are getting an average of 198 PPP loan applications, applying for an average of $44 million per bank.
An average of 56 loans per bank have been closed, for an average total dollar amount of $12.7 million per bank, the OBL said.
There are reports of banks being stymied by malfunctioning application system computers. Daunted by the deluge of applications, Wells Fargo even encouraged businesses to apply to competitors, according to national reports.
“The (SBA) system is going down,” Greg Carmichael, Fifth Third Bank president and chief executive, told the Dayton Daily News last week. “It was down from three o’clock to nine o’clock yesterday (Wednesday). The day before, it was down for four hours in the middle of the day.”
Ideally, Thurston said, the PPP is a program that would have been implemented gradually over time. “Obviously, it’s a huge program that would typically be rolled out over several months,” he said.
“We should all remember that this is an unprecedented expansion of SBA lending that will take some time before it’s fully functioning,” Rob Nichols, president and CEO of the American Bankers Association, said earlier this month.
Thurston said most banks are finding their way through technical hurdles.
“It’s almost inevitable you’re going to have a lot of glitches that are going to cause a lot of frustrations,” he said.
The non-profit OBL counts as members 200 FDIC-insured financial institutions including commercial banks, savings banks, and savings and loan associations ranging in size from just over $13 million in assets to more than $2.5 trillion.
Businesses can learn more about the PPP effort at sba.gov.
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