President Donald Trump on Friday heaped praise on Bank of America for doing a "great job" complying with the federal government's new coronavirus pandemic stimulus plan to hand out $350 billion in loans to small businesses.
But small business owners say they’re getting the brush-off from one of the nation’s largest bankers, Fox Business reported.
Several small business owners say the loan program is hampered with defects, and that applications are being rejected for arbitrary reasons, the news outlet reported.
And bankers complain they still don't have guidance from the federal government to begin the application process even though guidance was made official Thursday night, according to Treasury Secretary Steve Mnuchin.
Several business owners are complaining that Bank of America found reasons to backlog their loan application or deny them altogether.
Bank of America "is not processing our application because we don’t have a B of A credit card,” one owner wrote Fox Business, it reported.
“This is such BS. We do all of our banking through them and they are limiting access to stimulus funds to my business because we don’t have a credit card."
When contacted about these issues, a Bank of America spokesman declined to comment but pointed to a memo circulated internally that said: “In this first initial launch (of the small business loan program), we have focused on our full relationship clients first."
Banks were on the forefront of a key piece of the $2 trillion stimulus plan in handing out government-backed loans to small businesses. Under the plan, the federal government will provide loans for banks to make available to small business, or outfits with less than 500 employees, with low interest rates. The loans will be forgiven and paid off by the government if the small business retains its workforce until the economy can resume, possibly in the summer.
The program was considered key to the success of the relief package since small businesses employ nearly 50% of all working Americans, and they have been the hardest hit by the pandemic’s impact on the economy, Fox Business noted.
By Friday afternoon, at least 9,779 loans worth about $3.2 billion had been approved, the Wall Street Journal reported.
But Fox Business reported that understated the size and scope of demand. Bank of America was among the first banks to begin the loan program Friday morning. By the end of business Friday, a spokesman said it had processed $7 billion worth of loans from 75,000 applications, the news outlet reported.
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