NEW YORK (Reuters) – JPMorgan Chase & Co said on Friday that the U.S. Small Business Administration gave it the green light to make $15 billion in new loans to some 211,000 business customers hurt by the outbreak of the novel coronavirus.
The largest U.S. bank said it expects to process a total of $29 billion in loans for around 239,000 customers as part of the government’s Paycheck Protection Program (PPP). The average of these loans is for $123,000, according to a press release.
Congress gave the Small Business Administration (SBA) nearly $660 billion over the past two months for government-guaranteed, forgivable loans that businesses hurt by the epidemic could apply for at participating banks.
Faced with high demand from many of the country’s roughly 30 million small businesses, the program’s success was hindered by technology failures, a lack of clarity on the rules and paperwork required, and by banks’ struggles to quickly launch platforms to process the high volume of loan requests.
“Thousands of dedicated (staff) worked tirelessly over the past 30+ days to support the federal government in one of the largest and most ambitious emergency lending facilities in history,” JPMorgan Chairman and Chief Executive Jamie Dimon said in a statement.
Big banks have faced criticism from policymakers for approving loans to businesses considered to be at the larger end of the small businesses range. This fueled concerns that the program’s funds would be exhausted before smaller, needier companies could apply.
Congress attempted to address this concern this week by ring-fencing $30 billion for banks with less than $10 billion in assets. But pent-up demand meant those funds were exhausted by Tuesday.
For its part, JPMorgan said on Friday that half of the PPP loans it processed went to companies with fewer than 5 employees, and 75% of the loans were for less than $100,000.
“We’ve followed (the government’s) direction to deploy this relief as quickly as possible and agree with their tightening of eligibility requirements so that funding goes to those that need it most,” Chief Executive of Chase Business Banking Jennifer Roberts said in a statement.
Reporting By Elizabeth Dilts Marshall; Editing by Nick Zieminski