SAN DIEGO (KGTV) — Small businesses across San Diego County trying to get in on the $350 billion pot of low-interest stimulus loans are finding it increasingly hard just to apply for the funds.
Much of the frustration is coming from small businesses who do their banking with Wells Fargo, which reached its $10 billion loan cap two days after applications opened. That cap is part of federal restrictions imposed in the wake of Wells Fargo's 2016 fake account scandal.
The problem for small businesses that do their banking with Wells Fargo is that many other banks are limiting the applications for what are called Paycheck Protection Program loans to their existing customers. The loans, which are forgivable, allow small businesses to pay their employees and meet obligations amid coronavirus restrictions.
Josh Cantor, who owns Evolve Custom Automotive Restoration in Santee, banks with Wells Fargo and says he cannot find a financial institution to take on his application.
"I've checked into local credit unions and community banks as well as large banks, and most of the ones that are participating have a message on their website that says we are only available for our pre-existing customers to offer loans to them," said Cantor, who would like to take out $100,000.
In a statement, Wells Fargo chief executive Charles Scharf said the bank is doing all it can for its customers amid the federal limitations.
"We are committed to helping our customers during these unprecedented and challenging times, but are restricted in our ability to serve as many customers as we would like under the (Paycheck Protection Program)," he said. "While all businesses have been impacted by this crisis, small businesses with fewer than 50 employees and nonprofits often have fewer resources. Therefore, we are focusing our efforts under the Paycheck Protection Program on these groups."
But not all banks are turning away all new customers.
U.S. Bank says it will accept applications from new small businesses, though it encourages them to apply at their own banks.
Locally, Bank of Southern California says it is accepting new applications.
Chief executive Nathan Rogge says Bank of Southern California is relying on a versatile staff to take on the applications, but noted it already has 1,000 small businesses still waiting just to get into the federal system.
"There's a lot of cross training - a lot of, I work here for a little while, and then I go and work someplace else in the bank a little bit, because we all need to get the business done, and I think that probably makes us a bit more agile and flexible," Rogge said.
Rogge said Bank of Southern California has processed applications for about 225 businesses, totaling $125 million.