Wells Fargo, Hampered by Regulatory Caps, Already Exhausted PPP Lending Capacity – By Palash Ghosh (IB Times) / April 6 2020
- Wells Fargo can no longer accept loan applications under the SBA PPA program
- PPP provides low interest 1% loans to businesses with less than 500 employees
- Wells Fargo might be shutting out some small business clients that have yet to apply for a loan
Banking giant Wells Fargo (WFC) said on Sunday that it has already received so many loan requests from small businesses that it exhausted its $10 billion capacity for lending under terms of the government’s Paycheck Protection Program.
Wells Fargo is subject to stringent regulatory asset caps due to past wrongdoings.
As a result, Wells Fargo will no longer accept any more such loan applications
The Paycheck Protection Program, or PPP, administered by the U.S. Small Business Administration, or SBA, was introduced as part of the federal government’s massive $2.2 trillion stimulus package and was designed to assist small businesses to keep and pay their employees during the coronavirus pandemic, and also to pay for rent, mortgage interest, or utilities.
PPP provides low interest (1%) loans to businesses with less than 500 employees. Borrowers who don’t lay off workers over the next eight weeks will have their loans forgiven, along with the interest payments – which essentially converts the loan into a grant.
In addition, SBA said, PPP loan payments will be deferred for six months and no collateral nor personal guarantees will be required. Neither the government nor lenders will charge to any fees to small businesses. However, loan forgiveness will be reduced if a business’ full-time headcount declines, or if salaries and wages decrease.
Continue to article: https://www.ibtimes.com/wells-fargo-hampered-regulatory-caps-already-exhausted-ppp-lending-capacity-2953583
