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Trump Calls Virus Relief ‘Flawless’ Despite Bankers’ Struggles

Bloomberg logoBloomberg 4/4/2020 Saleha Mohsin and Jennifer Jacobs
a chair sitting in front of a store: Chairs are stacked on tables in a closed restaurant on Bourbon Street in New Orleans on March 30, 2020. © Photographer: Emily Kask/Bloomberg Chairs are stacked on tables in a closed restaurant on Bourbon Street in New Orleans on March 30, 2020.

(Bloomberg) -- President Donald Trump on Saturday dismissed concerns about the rollout of a $349 billion program to assist small businesses rocked by the coronavirus, saying loan distributions were “way ahead of schedule” even as banks struggle to respond to the flood of requests.

“It’s been flawless so far,” Trump told reporters Saturday at the White House. “Far beyond our expectations. I don’t even hear of any glitch.”

The president’s rosy assessment came even as some small businesses said they were worried funding for the Paycheck Protection Program -- a tent-pole of the $2.2 trillion coronavirus stimulus package signed into law March 27 -- might be exhausted before their loans were approved.

The Trump administration didn’t release new rules until late Thursday, hours before the program launched, and some banks, including Wells Fargo & Co., said they weren’t ready to accept applications. Small business owners reported frustration trying to get answers from their banks and submit the required documents.

“Yesterday was a lot of confusion -- you had the Treasury secretary tweeting out how well it was going, but what I was seeing was that most banks couldn’t get on the system,” David Steen, a top executive at Bridge Community Bank in Iowa, said in a phone interview.

Related: Ivanka Trump Was Conduit for Small Banks Over SBA Program

Trump said that within 24 hours, the Small Business Administration and over 1,200 local lenders had processed over 28,000 loans. Treasury Secretary Steve Mnuchin said over $5.4 billion had been processed on the program’s first day, and promised that more lenders would be ready to accept applications next week.

Trump earlier tweeted that he “will immediately ask Congress for more money to support small business” if the funds run out, as many people expect. Larry Kudlow, the White House’s top economic adviser, said that could come through “supplemental assistance.”

House Speaker Nancy Pelosi, a Democrat, also acknowledged on Friday that Congress might have to direct more funds to the virus-relief programs already signed into law.

With the U.S. payrolls report released Friday shattering records -- even without capturing the full extent of jobs lost due to the coronavirus lockdown -- members of the Trump administration and Congress recognized the urgent need for more aid.

“We needed to make sure we put money in to the pockets of small business quickly -- this was going to do no good if we waited three or four months,” Mnuchin said late Friday on Fox Business Network.

Read More: Pelosi Pares Goals for New Stimulus Bill With Eye on Faster Help

He has said that his team has worked until 4 a.m. on some days, and headed back to the office within three hours, to launch the brand new loan facility within one week of Trump signing it into law.

Banks and other lenders reported spotty success with the SBA’s loan portal, called E-Tran, on Friday. Overall, the several billion dollars in loans that went through was evidence the portal worked, at least for some, said Julie Huston, chairwoman of the National Association of Government Guaranteed Lenders.

However, other banks witnessed the portal crash repeatedly and were locked out of the system, said Paul Merski, an executive vice president at the Independent Community Bankers of America.

‘Beyond Stressful’

That made the process on Friday “beyond stressful and disappointing for community banks, Rebeca Romero Rainey, head of the ICBA said in a statement.

Banks that haven’t done SBA loans previously -- accounting for 60% of lenders -- are at a particular disadvantage because they have to essentially set up an account with the agency. The fear is that big banks with established SBA units may eat up the lion’s share of government funds, to the detriment of many rural businesses, Merski said.

Mnuchin heard about some of these frustrations Friday afternoon during a call with House Republicans, according to one person familiar with the conversation. The Treasury chief’s main message to the group of lawmakers was: “We’re working on it,” the person said.

Earlier: Small Business, Outgunned in Washington, Has Survival Fears

Lawmakers told Mnuchin they’re worried that the $349 billion will run out too soon. Mnuchin has repeatedly said that if that happens, he’ll ask Congress for more money.

The House and Senate aren’t scheduled to be back in session before April 20. It’s possible to pass legislation without a roll call vote, as long as there are no objections.

(Updates with Trump comments in paragraphs one through three and six.)

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