[mjberg01]

Odd that more aren't discussing the incentives for banks to secure the funding for their clients who have debt on the books with the banks.

e.g. take two companies who both applied at the same time and each is doing $1M in revenue. However, company A has $250k in debt with the bank whereas company B does not.

Now all of a sudden the banks give the cash to the company with the debt because they know if they fail they will have to eat that on their balance sheet. They are incentivized to distribute the $ in a priority that fits them not on a 'first come first serve' basis which is the fair approach.

[AbrahamParangi]

This would also explain why Bank of America initially required an existing credit account. It makes sense that they would want to bail out their own bad debt with PPP money.

[Paradigma11]

I do not think that this criticism is fair. Banks asked but were not allowed to relax their legal KYC criterias.

Existing customers already fullfill these so they can be served while the others are processed. And ofcourse the whole system is completely swamped.

That being said i don't doubt that banks would have acted like this anyway.

[AbrahamParangi]

Hanlon's razor is usually true but assuming the opposite is usually wise.