ST. PETERSBURG — Steven Peterman had his payroll data on hand and was ready to apply for a lifeline from the new federal $349 billion Paycheck Protection Program.
But when applications went live at Bank of America Friday morning, he couldn’t even get past the log-in screen. That’s because the bank was taking applications from customers who had established lending relationships with the bank. That shut out customers like Peterman, who had a business account but no loans or business credit cards.
“I felt super stuck,” said Peterman, 34, who opened Pete’s General store and bakery about a year ago. He has a staff of five, with a sixth employee due to return from maternity leave soon. But without the aid available through banks working with the new federal pandemic-relief program, he wasn’t sure how long he could hang on.
“There was a lot of our clients that were in that boat,” said St. Petersburg certified public accountant W. Gordon “W.G.” Spoor II. “They were very excited because Bank of America was first” to have an application available. “They were going to be ready to go. They went to apply, and they could not apply.”
By Monday morning, the landscape had changed, and Peterman heard from the bank he would be able to file an application.
“We are accepting applications from clients with a business banking relationship,” Bank of America spokesman Bill Halldin said in an email to the Tampa Bay Times. Bank of America first opened applications to clients with lending relationships and planned to open the process further as it went. Given how the launch went on Friday, he said, it was able to broaden access to more clients Saturday.
In the meantime, however, that’s not the initial message clients got.
“It wasn’t, this will be open tomorrow or this will be open early next week or later on,” Spoor said of Bank of America communications sent to his clients. “It was you’re not able to apply.”
In an interview with CNBC on mid-morning Friday, when small businesses were already protesting on social media, Bank of America CEO Brian Moynihan said the bank was prioritizing how it handled the loans.
“We have a million borrowing customers that we’re trying to get through the system first,” he told the network. “Then our second priority will be the customers who have the core operating account with us but don’t borrow anywhere.”
Relationship managers will handle applications from businesses that bank with but haven’t borrowed from Bank of America, Moynihan said. Other businesses with loans elsewhere should go to those banks, he said, because that will spread the work out and “make the whole system go faster.”
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By Monday morning, Halldin said, Bank of America had received more than 178,000 applications seeking about $33 billion in loans.
Passed by Congress less than two weeks ago, the gigantic Paycheck Protection Program is designed to provide small businesses and nonprofit organizations with loans that can be forgiven if the employers maintain their payrolls through the coronavirus shutdowns.
But the program got off to an uneven start. Federal officials didn’t make some final rules available until Saturday morning, said Chris Kneer, a Tampa senior vice president for Valley Bank, which had 12,000 businesses express interest by Monday.
Meanwhile, different banks required different information from businesses.
“It’s a mixed bag,” said Spoor, whose firm worked through the weekend to advise clients filing applications to different banks. “It’s kind of scattered all over the place as you would expect. Each bank does it differently, which causes a lot of headaches and problems.”