Friday was the first day that small businesses could get loans as part of the $2 trillion coronavirus stimulus package. However, the rollout didn’t go smoothly, and customers raged at Bank of America and Wells Fargo, among other banks, on Twitter.
On Tuesday, the United States Department of the Treasury announced small business owners could apply for Paycheck Protection Plan (PPP) loans on Friday. The loans were part of the stimulus package signed into law on March 27 that authorized $349 billion in loans, allowing businesses to pay their employees during the coronavirus pandemic.
“Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25 percent of that amount. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee,” the Treasury said at the time. The Treasury also promised to forgive the loans, providing the money was only used to cover payroll costs as well as mortgage payments, rent and utilities.
The U.S. Small Business Administration posted the forms on its website; to apply, business owners fill out the form that applies to them, and bring it along with any required documentation to either a Small Business Administration lender or any federally insured bank, credit union or Farm Credit System institution that’s participating in the program.
At least, that was how it was supposed to work. Instead, business owners faced difficulties with the process. Some owners were denied loans, while others had trouble even getting to the online applications.
Many customers took to Twitter to complain about the difficulty they had in getting the loans they were promised by the government. Bank of America came under fire for requiring business owners to already have a business credit card with the bank to be approved for loans. Customers vented their ire in response to a Bank of America tweet that said it had received “over 85,000 applications totalling $22 billion through the @USTreasury Paycheck Protection Program since we went live this morning.”
“Yet you turned away millions of your clients away including myself because we don’t have a business credit card? What is the update on this? We will remember this,” Twitter user @los333 wrote.
“When will you allow businesses who have been your customers for decades but don’t have loans or credit cards apply for this program? This deserves a definitive answer! You are keeping so many great businesses from accessing the very funds they need to survive,” Jennifer Woods wrote.
“Small business owners like us are being PUNISHED for being financially responsible & not taking on debts with #bankofamericawe’ve been banking w BOA for 2 decades. This such BS. Other banks don’t have the same lending relationship requirement so why do you?” wrote @suyoutwice.
Wells Fargo, on the other hand, admitted that it was still working on its website to allow people to apply for the loans.
“We are working to assist our small business customers as part of the Paycheck Protection Program (PPP). We encourage customers to check our website often. Applications will only be accepted via our website to ensure our customers get the support they need,” Wells Fargo wrote.
Wells Fargo customers were frustrated, and many pointed out that Wells Fargo was seemingly one of the last major banks to set up the application process.
“Last major bank to bring this. By the time we apply there will be no funds available. Such a trashy bank,” Twitter user @kaneo1123 wrote.
“How are other banks giving out loans but Wells Fargo isn’t?” user @KryptoLaura wrote, along with a photograph of a Fox News broadcast about the loans.
“@wellsfargo took all our calls and pummeled us with calls to get our business accounts. Now set up they don’t respond when we’re in need #ppp @Ask_WellsFargo #bofa #bankofamerica,” @FredBuysRE wrote.
Despite the issues, at least $5.4 billion has been given out over more than 17,500 loans, according to Jovita Carranza, administrator of the Small Business Administration.
Newsweek reached out to Wells Fargo and Bank of America for comment.