A flood of applications for the second round of relief for small businesses caused the process to slow nearly to a halt. Problems surrounding the program’s kickoff earlier this month resulted in most Alabama small businesses being denied access on the first day.
Under the Paycheck Protection Program (PPP), eligible small businesses may receive relief funds through government-backed loans from banks and credit unions. PPP is administered through the Small Business Administration (SBA).
The new round of funding amounts to $310 billion for PPP. Congress originally appropriated $350 billion to the program, an amount which was quickly depleted.
The second round of funding saw double the amount of applications when the process opened on Monday, according to SBA.
SBA asserts the enormous volume of applications caused its electronic transfer software, known as E-Tran, to malfunction.
This drew a reaction from Alabama’s banking industry.
Scott Latham, president and CEO of Alabama Bankers Association (ABA), took to social media to voice his frustration.
To say Alabama banks are frustrated yet again with @SBAgov is an understatement. Small businesses have waited far too long for P3 loans. It’s past time to trade in that old clunker of a system for a 2020 model. Let’s get this done. @ALBankers @ABABankers @ICBA
— Scott Latham (@selatham) April 27, 2020
Earlier in the day, Latham outlined that lack of access had become a nationwide problem.
“Bankers from all over the state are reporting that they cannot access the Small Business Association’s E-Tran system to upload loans for the Paycheck Protection Program,” he said in a statement from ABA. “The SBA assured our nation that its system would be prepared for loan transmittals to begin this morning, and it was not. Despite the agency’s efforts to be ready, it has failed. Bankers worked throughout the weekend in anticipation of E-Tran being ready to accept new PPP applications and will continue to stand ready so that much needed funding can be provided to small businesses across Alabama.”
The National Federation of Independent Business (NFIB) estimated that 80% of the nation’s small businesses had yet to receive PPP funding after the first round of loans.
Tim Howe is an owner of Yellowhammer Multimedia
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