Loans – Chase bucks federal guidelines in refusing to upgrade Long Island businessman’s PPP loan request
Fortunately for Flotteron, the S(BA) amended their language in the new $325 billion PPP loan program passed by Congress in December with a procedural notice issued on January 13, 2021. The language offers an avenue for small business owners to increase the amount of their earlier PPP loan to better reflect their seasonal operations.
Despite the federal rule change, Chase refuses to increase his loan amount.
“Joey we are not doing this,” a bank loan officer wrote to Flotteron on Jan. 18. “We didn’t amend them during the first PPP loan and, on all my training and emails and correspondence, we are not amending them now either.”
The bank rep said Chase does not currently have a process in place for amending first-time PPP loans but they hope to have one in the near future.
“There must be a lot of these situations out there and the people either don’t know they qualify, or they are locked into Chase like I am, as well,” Flotteron said.
On Chase’s PPP loan webpage, the bank underlines a notice that states, “We are not accepting applications for increases for first-time loans at this time.”
However, Chase’s public stance on first-time loans appears to go against S(BA) guidelines. The agency’s Jan. 13 notice states applicants are allowed to receive a modified loan even if their early round of PPP has already been disbursed.
The S(BA) does not comment on individual borrowers, but the agency did suggest any lender of record would best speak to instances concerning individual determinations on PPP loan policy.
“All PPP participating lenders have delegating authority to act as an agent of the government in approving and dispersing PPP Loans that have been federally guaranteed,” explained Matthew Coleman, S(BA) regional communications director. “Congress gave them that. They have delegated authority.”
Chase appeared to leave the door open for approval down the line.
“To focus on helping our clients apply and get approved for new first and second-time loans, we are not accepting applications for first-time loan increases at this time,” said Briana Curran, a Chase spokesperson. “We expect to offer these increases soon.”
Chase noted that the S(BA) amendment for first-time PPP borrowers increasing their amounts are guidelines applicable to processing and that the guidelines do not set forth a date by which lenders must accommodate increase request.
As he waits for a resolution, Flotteron insists he has only gone toe-to-toe with his bank—capitalized at $2.6 trillion in total assets in 2019—so as to pave the way for other small business to get their fair amount of PPP money.
“My real goal is, of course to get my business funded, but it’s to open a pathway for other people in the same situation,” he said. “I just want them to do the right thing and administer the program as it was designed by the government and not select the pieces of it that are convenient or profitable to use.”