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Lenders Struggle to Deliver Virus Relief to Small Business

  • Funding delayed as banks shut out of loan-processing system
  • Bankers bemoan unclear guidance for small business program
Chairs sit on the tables of a closed cafe in the French Quarter neighborhood of New Orleans on April 8.
Chairs sit on the tables of a closed cafe in the French Quarter neighborhood of New Orleans on April 8.Photographer: Sophia Germer/Bloomberg
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Lenders face continued difficulties in issuing financing under the $349 billion small business relief effort the Trump administration launched a week ago in response to the coronavirus outbreak, leaving mom-and-pop firms at growing risk of failure.

Banks have been intermittently shut out of the government’s loan-processing system, including again Thursday. They’re manually filling out forms -- and are forced to start over if the network freezes. Lenders are especially galled over unclear guidance and confusing paperwork: after questioning the use of a sample loan form dating from 2002, they were told they could use their own documents instead.