Banks struggle processing high volume of loans from small businesses

Small business owners are trying to find financial relief through the CARES Act, but banks are having a tough time processing the high volume of loan application.

Posted: Apr 9, 2020 11:10 PM

CHICO, Calif. -- Small businesses are having trouble getting loans, but banks are having even more trouble with the high volume of loans they're receiving.

A lot of small business owners are taking advantage of the CARES Act. Specifically, the part that allows them to borrow roughly two and a half months of expenses through the Small Business Administration. The purpose of the loan is to avoid having to lay off staff.

Community banks, like the Golden Valley Bank in Chico, are trying to process those applications but the volume has been overwhelming.

Golden Valley Bank President and CEO Mark Francis says the CARES Act was flawed from the beginning.

“The SBA cannot handle the volume of loans coming in. It has improved over the past couple days. We've been able to get loans funded for small business folks, but we still have a huge pipeline and it's going to take a while to get through it.”

Francis says his bank has received hundreds of inquiries within the last week.

It's especially tough since some banks aren't accepting loan applications. This causes an extra workload for those that are.

To put into scale the workload the SBA is tasked with, they process between 25 to 50 billion dollars in loans on a normal year.

Right now, they're trying to process 350 billion dollars within a week.

Francis believes banks could potentially start to see the logjam clear up by the end of the month.

California Coronavirus Cases

Data is updated nightly.

Cases: 3559311

Reported Deaths: 51794
CountyCasesDeaths
Los Angeles118923221241
Riverside2894503767
San Bernardino2860772783
Orange2607213982
San Diego2589823260
Santa Clara1102371777
Kern102627811
Fresno950151422
Sacramento929611464
Alameda802791241
Ventura77395834
San Joaquin665691082
Contra Costa62164674
Stanislaus55887946
Tulare47784746
Monterey42138327
San Mateo38872515
San Francisco34138398
Santa Barbara31763407
Solano30024164
Merced28915395
Sonoma28004298
Imperial26855589
Kings21951218
Placer19763232
San Luis Obispo19612227
Madera15414209
Santa Cruz14588183
Marin13136197
Yolo12787185
Shasta10969174
Butte10922160
El Dorado9095100
Napa899869
Sutter884597
San Benito575259
Yuba573336
Lassen560119
Tehama508152
Tuolumne394659
Nevada394074
Mendocino379643
Amador344841
Humboldt318033
Lake314140
Glenn221923
Colusa212813
Calaveras190547
Siskiyou174014
Inyo128736
Mono12114
Del Norte9875
Plumas6536
Modoc4524
Mariposa3957
Trinity3675
Sierra990
Alpine810
Unassigned00
Chico
Clear
39° wxIcon
Hi: 63° Lo: 35°
Feels Like: 32°
Oroville
Clear
43° wxIcon
Hi: 63° Lo: 43°
Feels Like: 38°
Chico
Clear
39° wxIcon
Hi: 58° Lo: 39°
Feels Like: 32°
Red Bluff
Partly Cloudy
42° wxIcon
Hi: 40° Lo: 15°
Feels Like: 38°
Red Bluff
Clear
42° wxIcon
Hi: 63° Lo: 41°
Feels Like: 38°
Chico
Clear
39° wxIcon
Hi: 65° Lo: 38°
Feels Like: 32°
It was a bright and breezy Friday for northern California, however the wind has been much stronger over Modoc County where a High Wind Warning is in effect through this evening. Stronger wind and cooler air will define our weather Saturday.
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