When owners turned to other banks, many of those institutions would only take applications from established customers. Frustrated, some owners have turned to Congress for help. The banks are taking criticism from all sides: small business owners, the government and members of Congress. But although the government is promising to guarantee the loans, the banks want to be absolutely certain they don’t end up with bad loans on their books. Bankers have said they are prioritizing existing customers because they don’t require additional paperwork tied to verifying the customer’s identity. Banking is a relationship business; bankers often focus on those who are already customers and who have a solid track record. Banks say they have been approving hundreds of thousands of applications but those have been getting hung up at the SBA, some due to technical problems. Bankers also say there is a legal issue. Each loan requires a promissory note — basically a legal contract — and it was unclear until Wednesday afternoon whether banks should use their own contracts or ones drafted by the SBA since PPP is a government program. The banks don’t want to be on the hook for these loans due to a paperwork error. Some banks, such as Virginia-based Atlantic Union Bank, took the risk of using their own notes to fund $50 million in loans so far. Others are manually processing loans. The Treasury Department promised at the program’s launch that money could go to businesses the same day their application was approved. But although the SBA says it has received more than 381,000 applications valued at $100 billion as of Wednesday afternoon, little money is flowing to owners’ bank accounts. Earlier this week, the SBA ran into a technological problem. The agency uses a system known as E-Tran to approve loans. But the system has been inundated with applications and stopped working on Monday; the SBA says it has since been up and running. Banks were submitting in a single day the number of applications they typically do in six months. And the SBA system normally approves applications in a matter of weeks, not days. The Federal Reserve on Thursday announced a lending program for small and mid-sized businesses. It offers loans of between $1 million and $150 million with an interest rate of about 2.5% to 4%. The loans would have four-year terms and payments would be deferred for a year. But Fed Chairman Jerome Powell noted Thursday that companies need to have the ability to repay their loans, and that the money wouldn’t be available to businesses that would be unable to repay them. The SBA is making what are called economic injury disaster loans available to businesses, but there have also been complaints about these loans, which require much more paperwork and typically take weeks to process. The government has provided for $10,000 grants under the disaster loan program and promised the money would be available within a few days. However, owners either say they’re waiting for the money or haven’t heard about loan approvals. Owners who apply for paycheck protection loans can also get disaster loans but they cannot use disaster loan money for payroll, mortgage interest, rent or utility expenses. Nick Note: Comrade unite against the imperialists and grab more then your fair share of the largess they are giving away to the masses.