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Small Business Rescue Loan Platform Crashes As Firms Seek Virus Aid

Summary:
Small Business Rescue Loan Platform Crashes As Firms Seek Virus Aid Technical glitches plaguing the Small Business Administration's rescue loan platform went from bad to worse on Monday, after computers running the system crashed - leaving borrowers and lenders in the lurch for hours. According to Bloomberg, citing banking industry representatives and an administration official, ...

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Small Business Rescue Loan Platform Crashes As Firms Seek Virus Aid

Technical glitches plaguing the Small Business Administration's rescue loan platform went from bad to worse on Monday, after computers running the system crashed - leaving borrowers and lenders in the lurch for hours.

Small Business Rescue Loan Platform Crashes As Firms Seek Virus Aid

According to Bloomberg, citing banking industry representatives and an administration official, the E-Tran system used to process loans for the new relief program was down for 'some time' on Monday before it was fixed.

The system has suffered from technical glitches since Friday's roll-out, frustrating small business owners seeking emergency funds to keep things afloat.

"We know that your efforts have been frustrated with system issues, policy questions and slower than usual responses," said the SBA's regional offices in a Saturday evening letter to bankers seen by Reuters.

Many lenders have had problems signing up for new user accounts with the SBA’s platform, while bankers who already had accounts have had issues unlocking them or resetting passwords, the email said. It said the SBA was working to unlock all of the existing user accounts in one batch.

SBA also alerted lenders in the email that its technology platform’s loan authorization form was “not at all” compliant with the terms of the rescue program.

Please do not close any loans using the current version of the loan authorization!” it said. -Reuters

The lending program was created as part of a $2.3 trillion stimulus package passed last month in which borrowers could apply from loans via participating banks starting last Friday. It will be open to borrowers until June 30.

Meanwhile, the Independent Community Bankers of America (ICBA) complained to the SBA and Treasury on behalf of thousands of small banks regarding the "failed technology" and "massive delays" its members had encountered on the new platform.

Community bankers also took to social media to complain about the form changes and being locked out of the system, rebutting claims by President Donald Trump that all was going well.

“Going well?! Hell nearly every community bank in the nation is locked out of the ... SBA platform!” Noah W. Wilcox, chief executive and chairman of Grand Rapids State Bank, who chairs the ICBA, tweeted on Sunday. -Reuters

On Monday, a senior trump administration official told Reuters that despite the difficulties experienced by some, the program had made progress.

"As of today – Day 4 – we’ve surpassed $35 billion originated; more than 100,000 small businesses have successfully applied and more than 2,000 lending institutions are up and running," the said, adding "Starting today, the SBA is offering a lender hotline and our 68 district offices across the country will be available to assist lenders."

That said, none of that helped people trying to apply for loans on Monday morning only to hit a brick wall of technical failure.

 
Tyler Durden Mon, 04/06/2020 - 18:55
Tyler Durden
Tyler Durden (a pseudonym) represents the idea that a return to truly efficient markets is a possibility and a necessity. After having experienced the inner workings of capitalism at various asset managers and advisors, Tyler believes that the current model is flawed and a deleveraging at every level of modern society is needed to reinspire the fundamental entrepreneurial spirit. Visit his blog: ZeroHedge (http://www.zerohedge.com/)

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