The U.S. Small Businesses Administration (SBA) has announced that it will temporarily exclude big banks from processing Paycheck Protection Program (PPP) loans from 4 P.M. EDT until midnight on Wednesday. During this time, the SBA would only accept loans from banks with assets of less than $1 billion.
The move aims to ensure that the smallest lenders will get access to the $310 million fund and alleviate fears that Wall Street banks will suck up most of the money. Small lenders predominantly serve small and minority-owned businesses. On the other hand, big banks were criticized for failing to get the funds to needy business owners in the first round of funding.
But big banks were angered by the SBA’s decision. These banks have hundreds of thousands of applications from small businesses and Financial Services Forum’s CEO Kevin Fromer said excluding them will delay the disbursement of funds to needy small business owners. He suggested an alternative solution that is a fully operational system that would allow banks of all sizes to provide support to Main Street.