UPDATE: APRIL 10, 2020, 10:30 a.m. Wells Fargo will begin lending to small businesses affected by coronavirus through the federal PPP again. Click here for details.
Wells Fargo announced late Sunday that it is bowing out of the federal Paycheck Protection Program (PPP), which launched Friday as part of the $2.2 trillion coronavirus stimulus package known as the CARES Act. Wells Fargo is no longer accepting new loan applications for the PPP.
In a statement, Wells said it will need to limit its participation in the government's massive small-business lending program to $10 billion due to regulatory restrictions. It will focus on lending to nonprofits and small businesses with fewer than 50 employees, and it has already received more than enough applications to reach that threshold.
The Paycheck Protection Program offers 1% interest loans to businesses with fewer than 500 workers to help them pay for expenses such as payroll and rent. Borrowers who don't lay off workers in the next eight weeks will have their loans forgiven, along with the interest.
The departure of Wells Fargo is significant because of its history as a top SBA lender. In 2019, it originated 3,033 SBA loans, for a total loan volume of more than $684 million.
Most U.S. banks are processing loans only for existing clients, though not all banks have begun accepting applications. The program launched Friday, April 3, 2020, for businesses and launches this week for independent contractors and the self-employed.
If you feel such a loan is in your future, please reach out immediately to discuss and begin the application process.