Small businesses may finally be getting some money

Desperate small businesses may finally be getting some good news from the nation’s biggest bank.

After coming under heavy criticism for processing coronavirus stimulus loans to large, publicly traded clients like Shake Shack and Ruth’s Chris Steakhouse, JPMorgan Chase on Thursday told 220,000 clients that its Payroll Protection Program loans have been processed, with all of them being small business owners who had been frozen out of the first round, sources said.

The applications totaled $17.8 billion in requested funding, which are now awaiting approval from the Small Business Administration, according to a client email from Chase Business Banking boss Jennifer Roberts.

The average loan the bank processed in Round 2 was $81,000 with roughly 40 percent of the applications being for $25,000 or less. That’s a far cry from its Round 1, when the average loan size was $140,000. Despite 60 percent of the loans it processed going to businesses with less than 25 employees, 31 public companies used the bank to grab $146 million in the first round.

That discrepancy left many Chase clients, and especially those in COVID-19 ravaged New York City, fuming.

“Those big businesses got handled and got their money,” said Chaim Homnick, a father of four young girls who owns a daycare center and children’s boutique in the Five Towns area of Long Island. “We’re hoping to keep employing people, but we need this money pretty badly.”

Chase’s apparent focus on large institutional clients at the expense of smaller local ones was exacerbated by news that many community banks had a much easier time getting their applications OK’d.

“After this, I am definitely going to start a relationship with a small bank,” said one Manhattan lawyer with a modest private practice who banks with Chase. “Lots of folks that we know that went through small banks have been approved.“

Chase is one of several banks sued in recent weeks for allegedly prioritizing larger clients over smaller ones for these taxpayer-funded loans.

An FAQ page on the bank’s website denies any preferential treatment. “Chase served clients as they came to us, and no business or client segment was prioritized over another,” it said. “We made every effort to serve as many clients as possible, in a race against time and limited funding.”

What is left unsaid, however, is that larger public companies like Shake Shack, which subsequently vowed to return the $2 million in PPP funding it received, have accounts outside the Chase Business Banking unit that may entitle them to more white-glove corporate treatment from other segments of the corporate bank’s empire.

JPMorgan took the Manhattan burger chain public in 2015, for example, and it has remained a client of both the investment and retails banks — entitling it to special services, sources said.

This time around, smaller New York City businesses should breathe a measured sigh of relief, sources said.

Chase, which is the biggest banker to small businesses in the city with hundreds of thousands of clients, notified 56,000 of them on Thursday that their applications are now with the SBA awaiting approval. If all of those loans are approved, the city will get roughly $5 billion in loans averaging $90,000 each.

Leave a Reply
Previous Article

Katharine McPhee, Jeremy Jordan thank workers with song from 'Waitress'

Next Article

Lenox Hill Hospital celebrates 1,000th coronavirus patient discharge

Related Posts