Most MA Banks Put Limits On Who Can Apply For Coronavirus Loans

BOSTON — An overwhelming majority of Massachusetts banks are accepting applications for the Paycheck Protection Program only from existing customers, raising fears among business owners that the $349 million federal program will run out of money before they can file an application.

Congress set up the program as part of a massive stimulus package to combat the impact the new coronavirus has had on the U.S. economy. Massachusetts banks started taking applications for the Paycheck Protection Program last week, but only a handful are accepting applications from customers that don't already have an existing relationship with the bank.

Michael Brennick, president of Neouradvance Inc., said he was unable to apply for help through the program for the Danvers-based company that provides rehabilitation services for people who have suffered brain injuries.

"My bank, Santander, hasn’t set it up yet to apply, and other banks are taking their customers first," he said. "It’s very discouraging."

The loan program is overseen by the Small Business Administration and is designed to encourage small businesses to keep workers on their payrolls. SBA will forgive loans if the borrower keeps employees on payroll for at least eight weeks and uses the money for wages and salaries, rent, mortgage interest or utilities.

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On Tuesday, the Boston Business Journal reported that Leader Bank, South Shore Bank, Needham Bank, Century Bank and HarborOne Bank were among a handful of Massachusetts banks accepting applications from non-customers. Those customers may have accounts at banks that are not part of the program, or they have grown frustrated with delays in processing applications at their own banks.

At South Shore Bank, the newspaper said, more than 50 employees were working around the clock to process the 580 loan applications, including 150 from non-customers, the bank had received as of Tuesday morning. But most banks have been overwhelmed by the sheer number of applications and the additional regulatory red tape required to make loans to new customers.

"While we understand it may be a lost opportunity to earn a new relationship, we want to make sure that we can service our existing customer base at levels they've come to expect from us," Dedham Institution for Savings CEO Peter Brown told the Boston Business Journal.

More Coronavirus Coverage On Massachusetts Patch:

• Choosing Who To Save: MA Issues Guidelines For Coronavirus Surge
• MA Coronavirus: New Projection Doubles Likely Death Toll
• MA Companies Lay Off 3,700 As Coronavirus Downturn Continues
• Salem Market Basket Worker Dies After Coronavirus Fight

Dave Copeland writes for Patch and can be reached at dave.copeland@patch.com or by calling 617-433-7851. Follow him on Twitter (@CopeWrites) and Facebook (/copewrites).