JPMorgan will only accept federal small business loans and suspend all others
In addition to loans under the Paycheck Protection Program, JPMorgan Chase & Co. (NYSE: JPM) will not be accepting any further small business loan applications until further notice.
JPMorgan Chief Consumer Officer Gordon Smith informed President Donald Trump on Tuesday that the bank had received more than 375,000 applications for $ 40 billion loans under 350’s Paycheck Protection Program (PPP). billions of dollars.
That’s more loan applications than at any other bank, reports the Financial Times.
Loans are attractive because businesses can borrow up to $ 10 million, which will be forfeited if the borrower proves the loans have paid salaries and other approved expenses, making the loans more beneficial than other loan options. short-term funding.
JPMorgan said the bank was devoting all of its small business lending resources to processing PPP loans and had “temporarily suspended” work on other applications, according to a spokesperson.
Why is this important
Smith revealed that requests for PPP loans ranged from $ 4,000 to $ 2.6 million. Other banks were also inundated with requests.
According to the CEO of Bank of America Corp (NYSE: BAC) Brian Moynihan, he has received 250,000 PPP loan applications since launch Friday. That translates to several thousand requests per hour, with 3,000 employees currently processing those loan requests, Forbes reported.
On Wednesday, Treasury Secretary Steven Mnuchin called for the release of additional funds for the small business loan program in a Tweeter.
Senator Marco Rubio warned on Twitter that at the current rate, funds allocated to the P3 program would be exhausted by June 6.
This week, Jamie Dimon, CEO of JPMorgan, wrote a letter to shareholders revealing that the bank had already loaned $ 950 million in the past 60 days to small businesses.
The bank would continue to process non-PPP requests already in progress and explore the issue of new requests next week, according to FT.
What else is there
Wells Fargo & Co. (NYSE: WFC) limited its contribution to $ 10 billion for the PPP program. After launching its portal last week, the bank reached maximum capacity one day after the start of the federal small business financing program.
The bank said it would give preference to loans to nonprofits and businesses with fewer than 50 employees.
JPMorgan shares traded up 0.54% to $ 94.81 in Thursday’s after-hours session. The shares closed the regular session up 4.04% to $ 94.30.
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