(Bloomberg) -- Bank of America Corp. sent 184,000 applications for rescue loans to the Small Business Administration from Sunday to early Monday morning.
The lender is waiting for the SBA to process and approve the loans, according to an internal memo sent Tuesday by Dean Athanasia, president of the consumer and small-business division. Bank of America has 48,000 more client applications ready to submit, and has been uploading those through the SBA’s slower process, he wrote.
“Today, we will communicate to each client whose application has been submitted to the SBA, advising them the loan application has been submitted, and we will notify each client promptly when the SBA has acted on the application,” Athanasia wrote. “We expect that will take several days at the earliest based on what the SBA is telling us.”
Bank of America is among the big U.S. lenders that have faced criticism from longtime clients who’ve tried to get SBA applications processed to weather the coronavirus pandemic, with many flocking to social media to complain about problems with their loans. The bank is being sued, alongside Wells Fargo & Co., JPMorgan Chase & Co. and US Bancorp, for prioritizing large loans and shutting out the smallest firms.
The Trump administration said it’s approved more than $52 billion in loan requests for small businesses so far in the relaunch of the coronavirus relief program.
The SBA program, launched April 3, has been beset by delays and glitches after guidance on how to process loans wasn’t released until the night before. Many big banks weren’t ready to participate or held back until rules became clearer.
Bank of America was the first lender to take applications. Only 1,000 of its latest 184,000 requests have received loan numbers from the SBA, which are required for the loans to be funded, according to a person familiar with the situation. More than half of the customers who received SBA loan numbers Monday have been funded, with the remainder in process today, Athanasia wrote in the memo.
Bank of America has processed 239,000 applications to the SBA to date. Of those, 98% were for companies with fewer than 100 employees, while 76% were for companies with fewer than 10 staff, Athanasia wrote. Submissions for less than $350,000 accounted for 93% of the total, while 78% of applications were for less than $100,000. Eight out of 10 requests were for the lender’s small-business clients, as opposed to larger firms.
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