News

Second fed loan program for small businesses hits snags

photo provided by iStock

April 28, 2020

Computer glitches and slowdowns at the Small Business Administration frustrated small businesses again as lenders trying to submit loan applications through ETran, the SBA computer system that processes and approves loans, were unsuccessful, according to an article from Associated Press.

Despite having applications ready for submission on Monday, April 27, lenders were notified on Sunday evening, April 26, that the agency was limiting the number of applications a lender could submit at one time. Several banks, unaware of the last-minute change, had previously sent batches of applications to the agency for approval.

The SBA's ETran system only processes approximately 60,000 loan applications a year and isn't built to handle the virtual flood of PPP applications it is receiving now.  

Within the first hour of receiving the new round of applicants, the system had slowed considerably and couldn't receive even the reduced amount of applications. Lenders and applicants are now concerned that if the funds get depleted a second time, small businesses in desperate need of the funding will get shut out a second time.

A spokesperson for the SBA blamed the processing acceptance snag on a new mechanism that was developed for ETran to keep lenders to a pacing limit.

For more information on how the coronavirus has affected the ATM industry, click here