A Small Business Administration official was recorded chastising big banks, accusing them of purposefully slowing down a program to lend to small businesses hurt by the coronavirus. Joseph Amato, a district director in Nevada, made the comments on a webinar hosted by a Las Vegas attorney.”Some of the big banks that had no problem in taking billions of dollars of free money as bailout in 2008 are now the biggest banks that are resistant to helping small businesses so that should tell you something,” he said.Visit Business Insider’s homepage for more stories.
A district director for the Small Business Administration chastised Wall Street banks’ handling of the $349 billion loan program for small businesses.In a webinar recording posted online by Faith Jones, a lawyer and speaker in Las Vegas, Joseph Amato, who joined the SBA in 2017, accused banks of dragging their heels.”Some of the big banks that had no problem in taking billions of dollars of free money as bailout in 2008 are now the biggest banks that are resistant to helping small businesses so that should tell you something,” he said in the video first reported by The Washington Post. The Paycheck Protection Program was authorized by Congress in March as part of the $2 trillion financial stimulus package designed to prop up the American economy, which was largely left reeling by the coronavirus pandemic. In contrast to government aid to entities like airlines, small business loans are being funneled through private banks, which already have the infrastructure in place to process such credit.However, when the program launched on Friday, April 3, many small businesses who attempted to apply for the program ran into delays and described the rollout as “chaotic.”
“I can’t tell you how many phone calls I’ve gotten where a doctor will call me or a business owner will call me and say ‘I’ve been with such-and-such bank for 25-, 40-, 50 years’ or whatever ‘and they said they’re not taking my PPP applications. They’re not involved in the program,'” Amato said. “That should tell you a lot about what that bank is focused on.””But that’s my editorializing,” he added.Neither Amato nor the SBA immediately responded to a request for comment from Business Insider.Jones, the host of the webinar, commended lawmakers for their efforts despite the bumpy rollout.”The government is doing something right in focusing on getting this money to individuals and struggling business owners,” she told Business Insider. “The SBA is working around the clock and has been the fastest I’ve seen for a government agency to turn around application procedures and technology on their website.”
On Tuesday, Treasury Secretary Steven Mnuchin and President Donald Trump announced an agreement with congressional leaders for an additional $250 billion in funding for the program.—Steven Mnuchin (@stevenmnuchin1) April 7, 2020The increase in funding comes after the government doubled the interest rate on the loans — which can be completely forgiven if the program conditions are met — after some of the participating lenders, including the largest of Wall Street banks, complained the rules did not make economic sense for them to participate.”There is really no risk to the bank,” Amato, the Nevada SBA official, said in the video.
