Banks urge U.S. government to clear thousands of loans amid pandemic
NEW YORK, March 5 (Reuters) – U.S. banking associations on Friday asked the U.S. government to approve thousands of loan applications submitted by businesses to receive emergency funding during the coronavirus pandemic.
In a letter to members of Congress, 10 banking associations representing thousands of banks said the approval of many Paycheck Protection Program (PPP) loan applications had been delayed by a review process.
The PPP, managed by the Small Business Administration (SBA) and the Treasury Department, allows businesses to receive loans from lenders that will be repaid by the government if the money is spent on qualifying expenses.
The SBA did not respond to a request for comment.
The program has made $ 809 billion in financing available to small businesses since its launch less than a year ago, providing critical support to businesses during the crisis.
But the government has tightened the approval process for the latest round of PPP launched this year to reduce waste and fraud.
Banks have said, however, that the tighter supervision has caused delays and could cause businesses to lose access to much-needed financing.
“When a loan is flagged by certain hold codes, lenders are unable to resolve the issue and the loan application enters a gray area where SBA review is required,” the banking associations said in a letter. .
“This review process has led thousands of PPP borrowers to put their applications on hold for several weeks or more. (Report by Koh Gui Qing; Editing by Alex Richardson)
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