Banks that are being counted on to lend cash to distressed small businesses are sounding the alarm about the Trump administration’s implementation of a $350 billion lending program recently passed by the United States Congress.
Politico reports that banks are complaining that “Treasury Secretary Steven Mnuchin boxed them in with an unrealistic deadline and that the ground rules they’ve been given for the program, which is intended to deliver rapid aid to a huge number of ailing businesses, could delay the assistance for weeks or longer.”
In fact, according to Politico’s sources, “Some fear a disaster that could dwarf the failed kickoff of the Obamacare enrollment web site in 2013.”
Getting money out to small businesses quickly so they don’t lay off their employees is essential at a time when more than 10 million Americans have filed unemployment claims in just a two-week period.
Among the issues banks say they are facing is that they will need to verify that businesses applying for loans were operational on February 15th this year and that it is maintaining payroll.
“Banks say the verification requirements could lead to substantial delays in issuing loans — a mandate that could create a lag of weeks or more as they establish the necessary procedures,” Politico reports. “They are seeking greater assurances that they won’t be held liable if a borrower obtains a loan after providing misleading information.”