Freedom Bank Provides PPP Update 4.28.2020

Dear Valued Clients:

I wanted to share an update on our experiences with the Paycheck Protection Program (PPP) yesterday as it was a very disappointing experience.  Banks of all sizes are reporting significant difficulties accessing the Small Business Administration’s E-Tran system after its reopening for PPP loan applications at 10:30 a.m. yesterday.

The SBA announced the following surprise measures to help it manage the anticipated crush of volume at yesterday's reopening:

·         Pacing the number of loans processed in the E-Tran system for participating lenders imposing an “hourly limit” on the number of applications submitted.

·         Instituting a maximum dollar amount at 10 percent of PPP funding authority that any lending institution will be able to originate, in addition to $60 billion carve out for small banks.

·         Implementing operational standards to ensure that lenders access PPP funds based on their asset size and ensuring the PPP continues to operate on a first-come, first-serve basis.

·         Issuing new guidance allowing lenders that have received a significant amount of loan applications to make a one-time bulk submission of XML files to E-Tran.

·         Allowing XML files of 5,000 or more (revised from 15,000 today) approved PPP loans to be submitted to SBA by 9 p.m. EDT, April 27, 2020.

Unfortunately, the E-Tran system effectively crashed at 10:34 am yesterday morning.  It appears the mega-banks and financial tech providers have flooded the pipes and precluded us from making a great deal of progress on submissions due to system outages.  I have been in communication with ABA President and CEO Rob Nichols who reported “member banks across the country are deeply frustrated at their inability to access SBA’s E-Tran system.  We have raised these issues at the highest levels. Until they are resolved, America’s banks will not be able to help more struggling small businesses.”

The SBA advised us yesterday afternoon that the system will remain available overnight and accordingly we worked through the evening to submit applications.  We will keep you posted in real time on the status of your PPP loan application.  Please contact your banker at Freedom if you have any questions.  

Best regards,

Joseph J. Thomas, President and CEO