People use a Bank of America automated teller machine in Washington.
Nicholas Kamm | AFP | Getty Images
Bank of America said Monday that it’s seen fierce demand for emergency rescue loans with current applications already accounting for nearly 10% of the entire amount allocated by Congress.
The bank confirmed that it has received applications from 177,000 small businesses for a total of $32.6 billion in financing. The current Bank of America numbers are its applications and do not represent the sums the Small Business Administration has approved.
The bank was the first major lender to set up and launch its portal for the Paycheck Protection Program though it was quickly inundated with requests.
The chaotic and widespread demand stems from the nation’s small business owners, who have scrambled to apply for the rescue funds out of fear they could miss out on the historic, $350 billion program.
Steven Mnuchin, the U.S. Treasury Secretary, has assured business leaders that he would request more money if that happened, though any additional funding would require congressional approval and face potential hurdles from fiscal conservatives.
Federal lawmakers asked banks to help it dole out the $350 billion in loans to small businesses as part of its massive $2 trillion coronavirus stimulus bill signed last month. Legislators hope that small businesses will use the $350 billion to help keep staff on payroll and mitigate the economic shockwaves caused by state government mandates to self-quarantine and shutter commerce.
Though Capitol Hill has pushed for a rapid rollout of the small-business loans, some of the biggest banks have worried that they lacked the guidance to get online systems up and running. Questions also remain among lenders as to how much due diligence of borrowers is required and whether banks are able to sell the loans to generate liquidity.
Bank of America CEO Brian Moynihan told CNBC on Friday that the bank would focus on “borrowing clients” before turning to other small business customers and new clients.
“We have to focus on the borrowing clients to make sure we can take care of them,” he said last week.
— CNBC’s Hugh Son and Wilfred Frost contributed reporting.
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