[nightcracker]

> Where did this money go and who got it?

Call me skeptic but it's likely that banks prioritized applications of companies that have significant debt with the bank. This way the bank can essentially pay itself.

Louis Rossman reported that banks were doing this openly (explicitly saying they only allow applications from existing account holders). They have now removed that but nothing is preventing them from doing it behind closed doors anyways.

[throwaway_USD]

>Call me skeptic but it's likely that banks prioritized applications of companies that have significant debt with the bank.

They certainly did, on April 3 the day the program started of the 4 big banks only Bank of America began accepting applications with restrictions to applicants (example: must be an account holder and have pre-existing loans with the bank).

BOA was already sued by business owners in attempt to get court order to force BOA to open up the application process to everyone, and the Judge already ruled the banks have freedom to prioritize their own customers on any basis they like because the CARES Act did not prohibit the banks in anyway from doing so.

Now there have been multiple lawsuits against multiple banks, here is a link to one of the Judge's orders denying the restraining order against BOA: https://www.pierceatwood.com/sites/default/files/Order%20den...

In short the banks with get an automatic 5% of the total $350B, plus of those loans that don't get forgiven, the banks can sell them on the secondary market. So as you point out the Banks basically got $17.5B to lend money to businesses that already owe them money.

[exclusiv]

Apart from what you mentioned and cleaning up their balance sheets, the commission total was higher for larger loan requests.

It was probably the same work to process a larger amount than a smaller one, so they were incentivized to do larger ones first. They had 5% total for the lower loans and 3% for up to 200k, but if its the same work - you do the higher ones regardless of your commission %. The average loan across the board was about 200k from what I last saw.

Should have been a flat fee. And they probably should have prevented businesses from getting a PPP loan from your current bank so they didn't have that incentive to discriminate and clean up any prior non-Covid related debt.

Chase lied about reviewing applications sequentially. We were early on April 6th. Never heard anything until this morning when they emailed saying funds were gone. Since they didn't update anyone, it probably made it easier to discriminate. If you were #1 and didn't get a loan, then they'd have to tell you that you were denied if they were really going sequential and fair, and not discriminating. I won't be surprised if there's a class action fired up.

Just one crazy example - Chase funded 20M to Ruth's Chris as they got around the 500 employee limit with a size standard loophole. I don't know anyone who gets takeout steaks. Nor will people be buying a lot of them when they can even open back up again. So dumb.

There was no way to know if your loan was looked at, if it was ever submitted to the SBA by Chase or any way to withdraw your application. And since the SBA said not to do multiple applications, Chase screwed over a lot of people.

Just last week I had a fraud alert and Chase's phone service was not operational. They went completely dark. Seemed to be all hands on deck with PPP, cleaning up balance sheet and getting that easy money in commissions.

[manigandham]

If you submitted the application as an owner of the business with your SSN/TIN then you should see a business loan inquiry from the SBA on your credit report. Use CreditKarma if you need to check your report for free.

[exclusiv]

I checked that and also Experian. No inquiry.

[Someone1234]

Also worth considering that this program, by design, under-cut bank's own business loan offerings. That's why we see a lot of small "customer focused" banks offer it, and a lot of the big ones drag their feet long enough for the program to run out of money.

They don't /want/ companies to get a loan this way, they want companies to get a bank loan. No doubt they'll be spamming all failed applicants with offerings of "discount" bank loans soon.

[exclusiv]

I don't think this is fully accurate. They wanted CERTAIN companies to get these loans for sure. They got to make easy commissions and give free money to companies that owe them money. But yes, they got a ton of free leads AND incredibly valuable business information which they can use to sell services later.

[zarkov99]

Absolutely. Bank of America pretty much stated that explicitly, they prioritized exactly the customers who had outstanding credit debt with BofA. How this stuff passes ethical muster is beyond me.

[vkou]

Ethics flow from the top down, and we have a serious lack of interest in ethics from our political and business leaders.

[rajacombinator]

Ah there it is. The cui bono angle that explains this boondoggle. Not at all surprising. The guys on top always win.