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Topline: Bank of America BAC launched an online portal that will let small businesses apply for the federal government’s $349 billion relief program this morning, making it the first major bank to begin accepting applications during what has been a chaotic rollout period.
- The program was supposed to go live around midnight last night, but major banks warned that they wouldn’t be ready to start lending because they hadn’t received enough guidance from the government.
- Guidance for lenders was posted around 7:15 p.m. ET last night, just hours before the program was due to launch.
- “Having just received guidance outlining how to implement a $349 billion program literally hours before it starts, we would ask for everyone to be patient,” Richard Hunt, head of the Consumer Bankers Association, said in a statement late Thursday.
- Treasury Secretary Steven Mnuchin tweeted this morning that large banks would “go live soon.”
- JPMorgan Chase’s website says it is not yet accepting applications, and Citigroup says that applications will be “available shortly.”
Key background: The Small Business Administration’s Paycheck Protection Program is a key part of the economic stimulus package that allocates $349 billion for small businesses to access forgivable loans for payroll and overhead. The program will offer loans of up to $10 million at 1% interest to companies and nonprofits with fewer than 500 workers so they can cover two months of payroll and overhead expenses. If the borrower retains workers and doesn’t cut their wages, the government will forgive most or all of the loan and repay bank lenders.
This is a developing story. Please check back for updates.