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Frustration as US rescue funding is beset by delays

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Via Financial Times

Small business owners looking for a slice of the government’s $350bn rescue programme faced hours of frustration on Friday, with just two big banks accepting applications by lunchtime.

Bank of America said it accepted thousands of applications in the morning but Chase, the country’s largest bank, did not come online until a few hours later, even as Steven Mnuchin, Treasury secretary, said smaller, community banks were taking part.

The participation of most of the biggest institutions has been delayed by confusion over details of the programme.

Chase began accepting applications at about 1pm eastern time for the scheme, which offers small businesses eight weeks worth of payroll costs if they keep their staff on through the crisis.

Citigroup, Wells Fargo, Truist Financial, Citizens, US Bancorp, and PNC were not yet up and running, however, according to their spokespeople or notes on their websites. 

“Hearing reports that some big banks are creating unnecessary restrictions on #SmallBusiness applying for #PPPloan,” Marco Rubio, the US senator who introduced the bill giving birth to the scheme, tweeted on Friday.

Scores of people took to Twitter to say that they had been unable to access the funds, which are being overseen by the Small Business Administration. The money is being distributed in the form of loans which can ultimately be forgiven by the government.

Brian Moynihan, Bank of America chief executive, told CNBC that his bank received 10,000 applications for the scheme within an hour of its system going live. Mr Mnuchin tweeted at lunchtime on Friday that more than $875m of loans had been originated so far. 

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A spokesman for Citi said the bank was “reviewing the new SBA guidelines and we expect to begin accepting online loan applications as soon as possible”.

A note on Citizens’ website said: “The SBA has not yet issued guidelines describing specific requirements for the programme, and it has not yet finalised borrower documentation requirements. Therefore, unlike we had hoped, we are not accepting applications at this time.” 

Wells Fargo said it was “working as quickly as possible to be ready” to accept applications and would “encourage customers to check our website often”. 

Truist, formed from the merger of BB&T and SunTrust, posted a note on its website saying it was “working hard to make it available to you as quickly as possible when the SBA finalises its rules and guidance”.

Additional reporting by James Politi in Washington

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