CLEARWATER — With 28 employees, Express Trailers on Ulmerton Road is the kind of small business that Congress meant to help when it created the $349 billion Paycheck Protection Program.
It’s also the size of business that the company’s bank, Wells Fargo, has targeted to help through Paycheck Protection loans that it makes.
But Wells Fargo says it won’t lend more than $10 billion through the program. That has left employers like Express Trailers, which has done its business banking with Wells Fargo for 15 years or more, scrambling to try to find other lenders that will accept an application.
“We thought that being with a big bank was going to be something that when it really came down to the nitty gritty and difficult times we’d have support,” Express Trailers general manager Dan Linden said Tuesday. “It’s kind of been the exact opposite.”
A bank spokesman said Wells Fargo wants to help.
“We are committed to helping our customers during these unprecedented and challenging times but are restricted in our ability to serve as many customers as we would like” under Paycheck Protection Program, spokesman Jacob Jordan said. It is, for example, donating fees from the program to nonprofits that help small businesses.
But the bank is operating under a cap on its growth imposed by the Federal Reserve as a result of a previous scandal where its employees opened millions of unauthorized accounts to make sales targets. The initial interest in the program is expected to fill up the company’s capacity to make Paycheck Protection loans while doing business under the cap, Jordan said.
Congress created the gigantic Paycheck Protection Program less than two weeks ago to provide forgivable loans that small businesses could use to keep employees working and pay bills despite the coronavirus shutdowns.
Its roll-out has been chaotic, with borrowers, lenders and officials with the U.S. Small Business Administration saying they faced many unanswered questions about its rules on the eve of its launch last Friday.
Linden said he began watching for application materials before the program officially launched, but it wasn’t until Saturday night that he was able to complete a form on Wells Fargo’s web site expressing an interest in applying for a loan. He heard nothing back on Sunday, then woke up to news Monday about the bank’s cap on loans.
Tuesday morning, Linden got his first email back from Wells Fargo, saying the bank couldn’t begin an application due to high demand. Express Trailers would remain in the queue and be informed of any changes to its status.
In the meantime, the bank added, the company might want to apply elsewhere to increase its chances of receiving a loan before the funds run out.
Linden had already begun, checking with 30 or 40 different banks. After two days, he managed to submit materials to digital drop boxes for four banks and emailed information to a fifth.
“I don’t even know if they’re going to look at those applications,” he said.
So far Express Trailers, which Linden said is run conservatively, has continued manufacturing operations, but there’s no way to tell what might be happening in six months. For employers with revenues that already have taken a devastating hit, he said not knowing whether aid will be available has to be stressful.
“It was pretty disheartening because these banks that say they’re going to be there when you need them completely and utterly abandon you during one of the biggest crises we’ve seen,” he said.
The Washington Post reported Tuesday that Treasury Secretary Steven Mnuchin asked congressional leaders to increase the $349 billion program by another $250 billion, something that could happen by Thursday.
Since Friday, banks had processed $70 billion in taxpayer-backed loans for 250,000 small businesses, a fraction of the nation’s 30 million small businesses, President Donald Trump told reporters. He did not say how many loans have been approved or how many employers had received funds.