The CEO and chief executive of Bank of America said he received 10,000 applications for the federal government’s small business bailout package within the first hour of accepting them.
Bank of America chief Brian Moynihan said his employees have been inundated with thousands of applications since his bank began accepting them on Friday morning, revealing the grim circumstances the U.S. small business community is facing during the COVID-19 pandemic.
“We are now taking applications, and we’re about 10,000 applications so far this morning,” Moynihan said Friday on CNBC, who noted that the bailout packaged was passed by Congress on March 27.
“My colleagues across the industry –we got a call earlier this morning — are all getting set up to take those applications,” Moynihan continued. “I think it’s a testimony to the speed at which we can move — speed is of the essence here for these types of small businesses.”
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“The [Paycheck Protection Program] is meant to keep their payroll consistent … and you’ll start to see money going out the door once the applications are processed over the next short period of time,” he said.
President Donald Trump signed a $2.2 trillion spending bill on March 27 to give financial relief to Americans suffering under the coronavirus pandemic. Included in this spending packaging is $350 billion in forgivable loans set aside for businesses that employ less than 500 people.
The Paycheck Protection Program, or PPP, was designated by Congress to manage the volume of loans that banks can provide to these small businesses. These loans can be forgiven as long as the business do not let go of any workers, and adhere to several other stipulations.
Small businesses, which have been struggling amid sweeping lockdown orders across numerous states, employ roughly half of all U.S. private sector workers. Several small business owners who spoke to the Daily Caller News Foundation said that they were experiencing financial hardship due to the pandemic. (RELATED: March Jobs Report: 701,000 Jobs Lost, Unemployment Jumps To 4.4%)
Bank of America, the second largest bank in the United States in terms of total assets, became the first major financial institution to accept applications for the small-business relief program.
Moynihan said consumer transaction volume with Bank of America dropped from an average of $60 billion a week to $40 billion through March, largely due to consumers remaining confined to their homes and dramatically reducing their spending habits.
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