CENTRAL, Texas — The Paycheck Protection Program provided up to $349 billion in forgivable loans to small businesses starting on April 3, but the program was already out of money by April 16.
Of that money, $28 billion went to help small businesses in the Texas economy, according to U.S. Small Business Administration Regional Communications Director Darla Booker. Booker said Texas actually received the largest amount of funding.
"Right now, Texas has received the highest dollars of small business loan's under PPP," Booker said.
The loans were forgivable if 75 percent of the funds went to support a business's employee's wages or benefits.
While the system did work for many people, some viewers tell 6 News there were flaws in the system that kept them from getting any help at all when the money was available.
One viewer said on Facebook that her bank didn't prioritize her account because she didn't have an existing loan. Another viewer said over email that their bank didn't provide a way to apply for the loans online and they were not able to submit an application at all.
Booker was not able to provide any explanation for the issues some had in local banks. Fortunately, Bill Day with Frost Bank Corporate Communication provided some insight into what happened as the program rolled out.
"By necessity, the Small Business Administration developed PPP in a hurry. The final application form wasn’t complete until about 10 hours before applications were set to begin on April 3, so no one had time to prepare," Day said. "We offered the PPP loan applications to existing business customers only due to the nature of the application process and the speed at which we had to move in order to secure funding."
While unfortunate for potential new customers that needed help, Frost Bank's policy of only working with existing business customers made sense. They could process applications faster if they concentrated on customers who already had all the information needed to apply on file.
Potential new customers had not even seen the needed documents and would take much longer to fill them out. Even with that policy, Day said the bank's staff had to deal with a flood of requests.
"In the first four days of applications, Frost received as many PPP loan applications as we receive commercial loan applications in a typical year," Day said.
Unfortunately, customers who did not have an existing loan account or business account with a participating bank risked being stuck at the end of the line. Or worse, they didn't even get in line for the application process.
Booker said the program was supposed to be on a first-come, first-serve basis and they focused on bringing on as many lenders as possible to the program.
"We were busy bringing on new lenders," Booker said. "As of April 16, we had about 5000 lenders approve loans under this program."
The SBA did not, however, have any knowledge of the policies those lenders were following. So, business owners trying to get help with a new bank may not have known the bank wasn't able to help them until it was too late. When 6 News asked Booker what a business facing an issue could do, she said the best course of action would be to just do business elsewhere.
"If someone ran into a roadblock with a lending institution, there are other lenders available," Booker said.
Right now, there isn't any money available, so lenders are no longer accepting applications which has forced some businesses that did not get approved to wait.
Booker said the National Business Administration is ready to continue the work as soon as there is more funding from congress.
"We are hopeful the funds will be on the way from Congress soon," Booker said.
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