“How will we do this?” Jacokes said. “For most of these people, they need to have everything set up. They need to train their people. It’s not just about turning on the lights. People need to know what to do.”
The timing, she said, was at a risk of putting underserved borrowers at a disadvantage if they didn’t have enough time to start offering loans when the SBA gave them exclusive hours. Banks are among the smallest in the country, and Congress is allocating $ 15 billion to make loans. Creditors’ representatives said they only learned of the launch date on Monday morning on Friday.
The small creditors’ alarm was the most recent complication in the implementation of the SBA’s Payment Check Protection Program. When the PPP opened in April, it suffered from incomplete guidelines and technical flaws as the agency tried to launch an unprecedented emergency rescue.
The new iteration reflected the lessons learned by Congress and government officials – particularly the focus on hard-hit businesses in struggling communities – but creditors were restless as SBA and the Treasury tried to make another quick turnaround.
An SBA spokesman declined to comment. On Friday morning, the agency said it would give community-oriented creditors exclusive access to PPP for much of next week. The big banks hoped they would not be able to start offering PPP loans until the week of 18 January.
The opportune moment left small banks feeling that they would be the subject of testing for a revamped program that revised loan eligibility rules and a new technology interface for receiving loan applications. Representatives of large and small creditors said on Friday that they were still learning essential details of the SBA’s new loan processing system.
“I understand the desire to launch this as soon as possible, but I fear that we will have a real serious problem meeting customer expectations when we have no idea what the app looks like,” said Robert James II, president of the National Bankers Association, which represents minority banks. “I’m afraid that we will end up being lab rats and we won’t be able to functionally help our customers.”
James said his own bank in Savannah, Georgia, has 13 full-time employees, including cashiers. More than 80% of its nearly $ 9 million in PPP loans last year went to black companies, he said. Many of the bank’s borrowers need time to gather documentation and “don’t have a speed dial CPA,” he added.
“It is not necessarily an advantage to go fast,” said James. “It is an advantage to have a portal dedicated to us and the time we need.”
The Community Development Bankers Association, the group that requested the most time, represents the so-called community development financial institutions serving low- and middle-income areas. Jacokes said the biggest one has about 1,000 employees, but some of them have 30 to 40 people.
“Some more time can be useful,” said Jacokes. “You can’t launch something on Friday night and expect people to be ready by Monday morning.”