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Banks are overwhelmed with PPP loan applications

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Yahoo Finance's Dan Roberts breaks down how banks are faring as they are working to giving out PPP loans to small business owners.

Video Transcript

JULIE HYMAN: And I want to bring Dan Roberts into this conversation and pivot back to PPP for a moment, because Dan, you've been tracking the progress, or lack thereof, of the banks in actually offering these loans.

DAN ROBERTS: Yeah, absolutely, Julie. And you know, it's interesting. It's sort of a welcome or even desperately needed bit of news to see that more money is going to be added to that pool. You know, Marco Rubio tweeting today that it could be as much as another $250 billion added to the pool because we keep hearing from small business owners who are having trouble navigating this circuitous, confusing process.

There was language that came out just the day before last Friday when the application process began that clarified that actually, if you have independent contractor workers, so 1099 workers, they have to apply for a PPP loan themselves directly. And that caused a lot of people to have to redo their whole application. We also heard from a lot of business owners who submitted an application Friday but hadn't seen that kind of asterisk, that distinction yet, and so now, over the weekend, had to redo their application process. Those 1099 workers, if they want to get a PPP loan, they can't apply until this coming Friday. So April 10, the kind of floodgates will open for their own PPP loan process.

And some of these small business owners we have spoken to have also noted that they're concerned that, you know, they've received some kind of confirmation from the bank that, basically, across the board, the banks are saying, you've now done what you can. You have submitted your application. Don't bother us. Don't contact us. We'll contact you next to let you know. And it could be days. It could be a week. And a lot of them are concerned that days will pass, and then they'll hear back. And it will turn out there was some kind of issue or problem on their application, and they'll get denied for that reason.

And the reason that's so scary is because it seems to be first come, first serve. I mean, Bank of America, which has granted the most of these things so far, has said that it has done about 177,000 loans. And the total amount that that would be-- that's the number of applications they've fielded-- is already 10% of the initial hold, the 249 billion. And so people are wondering, well, geez, if there was a problem with my application, well, what if I get rejected because it took too long, and I missed the boat?

JULIE HYMAN: Right.

DAN ROBERTS: So A lot of people are going to be very happy to see that the amount might be expanded.

JULIE HYMAN: There's also the issue that you have to hire back your workers, if you have fired them, by June 30. And so if you hire them back and then you get rejected, or if you still have a great amount of uncertainty regarding your business, that's also an issue.