Wells Fargo said Sunday evening that it has exhausted its $10 billion capacity for lending under the SBA’s Paycheck Protection Program as the bank operates under a regulatory asset cap.
In other words, amid the pandemic-induced downturn that has some talking of an impending economic depression, one of the nation’s largest lenders will largely be kept on the sidelines.
“Today, the company continues to operate in compliance with an asset cap imposed by its regulator due to actions of past leadership,” Wells Fargo CEO Charlie Scharf said in a statement Sunday. “While we are actively working to create balance sheet capacity to lend, we are limited in our ongoing ability to use our strong capital and liquidity position to extend additional credit.
“Since I arrived at the company, I have been clear that we will direct all resources necessary to do the work required by our regulators and we are in the process of doing so,” Scharf said. “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 PPP.”
Wells Fargo closing its loan window under the special SBA program is likely to stun millions of small business owners across the country that bank with Wells Fargo and were planning to apply this week for the SBA PPP loans that eventually become grants if the money is used to keep employees on the payroll and to pay other eligible expenses.
Small business owners’ lenders and accountants are expecting a wave of loan applications to come in this week for the SBA program that began on April 3.
Read the full article here: https://www.bizjournals.com/sanfrancisco/news/2020/04/05/wells-fargo-closes-loan-window-for-sba-relief.html