Small business owner concerned by Bank of America’s handling of Paycheck Protection Program
ActionnewsjaxJACKSONVILLE, Fla. — Mark Durocher, owner of Break Time Vending Services, told Action News Jax he was denied an opportunity to apply for the Payroll Protection Program by Bank of America.
Durocher says the bank did not allow him to apply because his business does not have a line of credit.
Congress appropriated $349 billion for the Paycheck Protection Program, which is an SBA loan that helps businesses keep their employees during the coronavirus pandemic. The program was approved as part of the $2.2 trillion stimulus package.
Florida Senator Marco Rubio publicly criticized Bank of America for creating additional lending requirements, tweeting, “The requirement that a #SmallBusiness not just have a business account but also a loan or credit card is NOT in the law we wrote & passed or in the regulations. This is a @BankofAmerica requirement not a govt one. They should drop it. This money is 100% guaranteed by fed govt.”
Bank of America told Action News Jax it’s been up and running with its program since the morning of Friday, April 3rd.
A Bank of America spokesperson said they had been processing approximately 10,000 applications per hour, and had teams working 24/7 to have the application online by this morning, and the applications are being processes as quickly as possible.
The company says it is prioritizing small business borrowing clients at this time, but will expand its process soon.
Bank of America sent this statement:
“We know for these businesses speed is of the essence. We can move fastest with our nearly 1 million small business borrowing clients. That is our near term priority. As the administration has made clear going to your current lending bank is the fastest route to completion. We will expand our process soon and are addressing requests through an escalation process in the meantime.”
The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.
Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Must Keep Employees on the Payroll—or Rehire Quickly
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or ifsalaries and wages decrease.
All Small Businesses Eligible
Small businesses with 500 or fewer employees—including nonprofits, veterans organizations,tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—are eligible. Businesses with more than 500 employees are eligible in certain industries.
When to Apply
Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10,2020, independent contractors and self-employed individuals can apply. We encourage you toapply as quickly as you can because there is a funding cap.
How to Apply
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at www.sba.gov.