JPMorgan Chase and Bank of America said they processed almost 500,000 applications totaling roughly $46 billion as part of the Paycheck Protection Program intended to help small businesses struggling to due to the pandemic, according to a report in Fox Business on Thursday (April 30).
Less than 30,000 loan applications from both banks combined have been approved by the Small Business Administration (SBA). The government shut big lenders out of the program on Wednesday (April 29) so more community banks could participate.
The decision by the SBA only to accept applications from banks with less than $1 billion in assets from 4 p.m. to midnight on Wednesday frustrated several big banks who said they also submitted applications for small businesses and did not know the status of most of them.
Bank of America said it put through 250,000 applications totaling $28 billion and 75 percent of applications were under $100,000 and came from firms with fewer than 10 employees.
JPMorgan said it processed some 220,000 applications worth $17.8 billion. The lender said the average loan amount was about $81,000, and roughly 50 percent of the applicants were companies with fewer than five employees, a bank spokeswoman told Fox Business. About 40 percent of applications were for less than $25,000, the bank said.
By the end of the day on Wednesday (April 29), the SBA said that 5,300 banks originated 960,000 loans totaling almost $90 billion.
The loans were part of the $2.3 trillion relief package issued under CARES. The PPP gives small and medium-sized businesses (SMBs) struggling due to the global pandemic forgivable loans with participating banks.
The program administered by the SBA had technology problems and other issues that caused massive delays. Further, some of the money was misdirected and awarded to companies worth millions, like national chains and public companies.
The Los Angeles Lakers, Shake Shack, Pollo Tropical and more returned the loan money they received from the program after learning that the neediest businesses were closed out because the fund was depleted.