Bank of America says it has 184,000 PPP loans waiting on the feds

This story was updated May 1 to reflect the most recent figures provided by Bank of America.

Bank of America has 184,000 applications still waiting on small-business stimulus loans from the federal government after the second round of stimulus funding replenished the troubled program’s coffers.

Those applications are awaiting processing and and approval from the Small Business Administration, according to an update provided by the bank with data through Tuesday morning. The bank has an additional 57,000 more it’s submitting through a slower manual process.

Another 15,000 have been approved by the SBA and have either received or are in the process of obtaining funding.

It’s the latest indication that the SBA, which was plagued by technical errors in the first round of loan processing, is still struggling to deal with the flood of demand for the mammoth stimulus program.

The loan program, known as the Paycheck Protection Program, offers small businesses forgivable loans to help them pay employees’ salaries and other bills during the coronavirus pandemic. The program, which opened in April, quickly exhausted $349 billion in initial funding and was replenished with $310 billion more last week.

“We are now waiting for them to process and approve these loans,” Dean Athanasia, the bank’s president of consumer and small business, said in a memo this week, obtained by the Observer.

Issues with the way that the SBA processes large swaths of loans have complicated banks’ efforts to get the second round of PPP funds to small businesses.

Second round

So far in the second round of funding, which started Monday, the SBA granted about 450,000 loans worth $48.5 billion, according to a report from The Daily Caller. The SBA did not immediately reply to a request for comment.

“Once the SBA approves the loans we have submitted to them, and are trying to submit through their manual process, hundreds of thousands of small businesses in America will be getting the help that the Congress and Treasury Department intended when they created this program,” Athanasia said.

Bank of America, one of the country’s biggest small-business lenders, was one of the first banks to accept PPP applications, but it has also been dogged by accusations of shuffling the order in which it submitted the program’s loans to earn the bank more in fees. The bank rejects the allegations.

CEO Brian Moynihan criticized the scarcity built in to the program in a Sunday interview on “Face the Nation,” arguing, “we need to take away the first-come, first-served aspect of this to make sure it’s fully funded, because at the end of day it’s going to where people want it.”

Many small businesses were left in the lurch after the loan program ran of out of funds, with many unable to get their applications submitted simply due to what bank they had.

As of Tuesday, Bank of America had processed 256,000 PPP loans, the bank said. Wells Fargo, which has faced its own unique issues with the stimulus program, declined to comment on its progress in the second round of funding. Charlotte-based Truist, the merged name of BB&T and SunTrust, processed 32,000 loans worth about $10 billion in the first round of PPP funding.

Just under 7,200 of the loans Bank of America processed were for businesses in North Carolina, the bank said, worth over $659 million. About three-quarters in the state and nationally came from businesses with under 10 employees, and 99% were for those with 99 employees or fewer.

Staff writer Danielle Chemtob contributed to this report

This story was originally published April 29, 2020 at 6:00 AM.