Federal Small-Business Loan Program Faces Rocky Start

JPMorgan Chase will not be accepting applications for the federal small-business loan program as early as Friday. 

Chase, the country’s largest lender, isn’t the only bank waiting on more specific guidance from the Small Business Association (SBA) on the Paycheck Protection Program, which allows employers to borrow up to $10 million from banks to cover the costs of salaries, bonuses, retirement benefits, parental leave and health care benefits. 

Per The Washington Post, other banks said they may accept applications, but would not process them immediately. Banks are concerned that the expedited review process, which allows borrowers to claim eligibility without the government approval, will have a high risk for fraud.

Goldman Sachs will not directly participate in the program but said Thursday it has $300 million earmarked for small-business lending.