It has been a maddening day for the nation’s small businesses. Access to the SBA’s PPP lending mechanism has been sporadic at best, and non-existent at worst.
Officially the SBA tells us that this slower processing reality was the SBA’s intention from the outset. There was no “crashing” of the system; rather, the SBA tells us they put a “pacer” mechanism into their system, which acts like a governor on a car engine. After so many loans have been submitted, the system kicks banks out.
What? But the glitch is, they did not tell anyone (specifically, banks) it was the plan!
A number of Oklahoma banks reported they were not able to get into the E-Tran portal, and it wasn’t just smaller banks. The sizes were all over the place. On the other hand, some banks were able to get through without any problems, and those banks were of various sizes as well.
There’s usually a conspiracy theory floating around any time there’s a crisis. It’s used to “explain” what happened or what is going on. Think about the assassination of John F. Kennedy on Nov. 22, 1963, as an example.
Today the theory was the “big banks” caused the SBA’s system to crash because they were uploading 15,000 loan applications at a time. But at 3:30 p.m., the SBA tweeted as follows,
“SBA Administrator just Tweeted 100k PPP loans submitted by 4k plus lenders . . .”? Numbers as of 3:30 p.m.
So – based on what we know now, and according to the SBA, all of this delay, confusion, frustration and inability to help your bank’s customers was planned by the SBA.
Really? Oh well, that’s their story and they are sticking to it.
The reality appears to be banks of all sizes were having the same problem of access to the E-Tran system. As just one example, in Georgia, the association’s largest member bank had 9,000 loans ready and waiting to be entered into the system. The bank has 100 people doing the “entering.”
The result? Eighty-three loans were entered today.
Most of us are frustrated by what happened today. But according to the SBA, this was part of the plan all along. All this delay was across the board with the end result being these problems slow the delivery of this much-needed aid to small businesses.
Other tweets have been posted, but I’m willing to take the SBA at its word. It also tellsl us unprecedented demand was slowing its system response times because there have been double the number of users accessing the system compared to any previous day during the first round of the PPP.
The good news – sort of – is that the system is open 24/7. That should enable more bank customer applications to go through the SBA’s system.
One hopes that that’s true. We’ll keep you posted.