Amid reports of problems as the Paycheck Protection Program began to roll out on Friday, one of the key negotiators of the $2.2 trillion deal acknowledged “there will be some glitches,” but he remained confident that the money would reach struggling small businesses soon enough.
I “talked to Secretary Mnuchin twice today,” said House Minority Leader Kevin McCarthy (R-CA) during a mid-day appearance on Yahoo Finance. “I did a conference call with all the Republican members across and had Secretary Mnuchin on.” The California Congressman also pointed to tweets from the Treasury Secretary as evidence of early successes, for community banks at least.
The minority leader added a prediction: “I imagine we will be over a couple billion just today for small businesses,” he said.
The forgivable loans are being managed by the Treasury Department and the Small Business Administration. They are designed to cover U.S. businesses with 500 or fewer employees.
Businesses are required to verify they were operational on Feb. 15 and that they have been negatively impacted by the coronavirus. The plan is that loans will be made for up to 2.5 times the average monthly payroll of a business but can’t exceed $10 million per business.
Small Business Administrator Jovita Carranza has called the plan an “unprecedented public-private partnership,” adding that the “goal is to position lenders as the single point-of-contact for small businesses – the application, loan processing, and disbursement of funds will all be administered at the community level.”
On Thursday night, the Treasury Department posted what it described as the final form that businesses would be able to use and the SBA website posted guidance. But a number of bankers told Reuters on Friday they were not able to make loans yet because they were waiting for information or processing details from the SBA and Treasury.
Bank of America (BAC) became the first major bank to accept applications on Friday, according to Reuters. Citibank's (C) website, early Friday afternoon, featured a message asking for patience with the program: "While we are working as quickly as we can, we are not yet able to accept applications for the Paycheck Protection Program.”
Consumer Bankers Association President Richard Hunt added in a statement that, “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 as banks move heaven and earth to get a system in place and running” to help businesses.”
McCarthy said he was working with individual banks that are having a problem “getting into that portal,” but made sure to underline the bigger picture: “think for one moment,” he said. “We are less than a week away from passing and signing this bill.”
Ben Werschkul is a producer for Yahoo Finance in Washington, DC.