The Paycheck Protection Program developed by Congress and the Treasury Dept is up and running today, first at Bank of America; many other community banks are also dispersing loans. However, there is a catch. After taking the billions in largess from the U.S. taxpayer (that means your money), hiking interest rates for the product and other goodies from Treasury, Bank of America has decided that only its lending customers get to survive. If you only have a business deposit account at the bank you're out of luck for the time being.
We'd like to ask Bank of America where it says that is allowed in the legislation behind the Paycheck Protection Program. Somehow we also suspect the bank's largest customers are getting taken care of first; if you're a small business owner that banks with BOA, paid your bills and never took out a loan, but now living day to day and worried about your survival, well you're out of luck. Sorry, go home and die.
But a recurring shock as millions of small business owners head to these bank websites to apply for the PPP funds is that contrary to the SBA's guidance that any small business with 500 or less employees can apply, going to lender portals shows that only a very narrow subset of America's millions in small businesses are be eligible, reported Zero Hedge.
You can read more about this stunning development here at Zero Hedge, titled "Millions of Small Businesses Stunned to Learn They Are Not Eligible for Bailout Loans."
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Why would any regulated lending institution prioritize disbursements to non-customers?
Are all oversight and accountability requirements waived?
What types of small business with reported activity required under PPP would not go to their regular bank?
Do you see the crunch for marijuana and other cash-based (including under-the-table) business?
CD Media, you can do better. The story is unfolding, keep on it!
Why would Wall Street assist this segment?
BTW you can thank Dodd-Frank and subsequent revisions for current inefficient banking workflows. Entirely.
If Congress really (in function, not word) wanted immediate access to funds for small business, they would have authorized SBA to lease a fleet of bread and icecream trucks with Treasury check printers in the back.
Apparently not so. Hence businesses with established banking relationships (!...) have faster access. Sensible, and economically equitable.