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Less than an hour after the Small Business Administration started taking requests for $310 billion in emergency aid for small businesses on Monday morning, its computer system for processing the loan applications crashed. Minutes after a $310 billion aid program for small companies opened for business on Monday, the online portal for submitting applications crashed. And it kept crashing all day, much to the frustration of bankers around the country who were trying — and failing — to apply on behalf of desperate clients.
“It’s obvious the system is simply flooded right now,” said Craig Street, the chief lending officer at United Midwest Savings Bank in Columbus, Ohio. “It’s been very stop and start, with no real way to know whether it is working other than to keep hitting the submit button.” Some bankers were so irritated that they vented on social media at the Small Business Administration, which is running the program. Rob Nichols, the chief executive of the American Bankers Association, wrote on Twitter that the trade group’s members were “deeply frustrated” at their inability to access the system. Until the problems were fixed, he said, “#AmericasBanks will not be able to help more struggling small businesses.”
Lenders had predicted that demand would be overwhelming for the second round of funding through the Paycheck Protection Program, which began early this month. Its initial round of funding — $342 billion — was depleted in 13 days. Hundreds of thousands of borrowers who sought loans were left out. Congress authorized a new funding round last week, and the government began accepting applications at 10:30 a.m. on Monday. Pent-up demand for the funds has been intense, after the program’s initial $342 billion funding ran out in under two weeks, stranding hundreds of thousands of applicants whose loans did not get processed. Last week, Congress approved the additional $310 billion for small businesses hit by the coronavirus pandemic. Bankers were expecting the money to once again run out quickly, and so on Monday at 10:30 a.m., when round two opened, they were ready to go.
Borrowers must apply for the money through banks or other lenders, but the S.B.A., which is managing the program, must approve each loan. Because the funds are first-come, first-served, lenders are anxious about getting their loans approved as quickly as possible. Officials from the S.B.A. did not immediately respond to questions about the technical problems lenders were reporting with E-tran, the agency’s computer system for processing loans. But for the second time in a month, the relief effort, called the Paycheck Protection Program, turned into chaos, sowing confusion among lenders and borrowers. A centerpiece of the government’s $2 trillion economic stimulus package, the program offers small companies — typically those with up to 500 workers — forgivable loans of up to $10 million. The S.B.A. is backing the loans, but customers must apply through financial institutions.
Rob Nichols, president of the American Bankers Association, said banks’ hands were tied: They can’t help small businesses get loans if S.B.A. technology isn’t working. “Our member banks across the country are deeply frustrated at their inability to access @SBAGov’s E-Tran system,” Mr. Nichols said in a tweet on Monday. Employees at TAB Bank in Ogden, Utah, spent last week pulling all-nighters to finish preparing loan applications from 1,100 customers. When the S.B.A. began accepting applications on Monday morning, they started trying to submit their files. But the S.B.A.’s computer system stalled, froze and crashed repeatedly. Five hours later, the bank had gotten only seven loans processed.
The Federal Reserve on Monday said it would substantially expand its municipal lending program, an effort to provide relief to strapped states and cities as coronavirus outbreak drains public coffers. “I’m beyond frustrated,” said Curt Queyrouze, the bank’s president, who also shared his experience on Twitter. “We wanted to update all of our customers this evening on the status of their applications, but right now, there’s not a lot of good news to give them.”
The Federal Reserve on Monday said it would substantially expand its municipal lending program, an effort to provide relief to strapped states and cities as the coronavirus outbreak drains public coffers.
The Fed had previously announced that it would buy short-term debt from states, cities with populations of more than one million and counties with populations exceeding two million. On Monday, it expanded that to cities with more than 250,000 residents and counties with more than 500,000. It also announced that it would buy slightly longer-term debt: securities that mature in three years will qualify for the program, up from two years previously.The Fed had previously announced that it would buy short-term debt from states, cities with populations of more than one million and counties with populations exceeding two million. On Monday, it expanded that to cities with more than 250,000 residents and counties with more than 500,000. It also announced that it would buy slightly longer-term debt: securities that mature in three years will qualify for the program, up from two years previously.
The program, which has yet to start, will operate through the Federal Reserve Bank of New York. It will be backed by $35 billion in Treasury Department funding, and capable of buying up to $500 billion in eligible debt. The program, which has yet to start, will operate through the Federal Reserve Bank of New York. It will be backed by $35 billion in Treasury Department funding, and will be capable of buying up to $500 billion in eligible debt.
A total of 261 states, cities and counties will qualify for the program, the Fed said. So will some multistate issuers, which can include entities like the Port Authority of New York and New Jersey.A total of 261 states, cities and counties will qualify for the program, the Fed said. So will some multistate issuers, which can include entities like the Port Authority of New York and New Jersey.
The expansion comes as the Fed scrambles to set up new programs to keep markets functioning properly and credit flowing into the economy, pushing its own boundaries and expanding into areas — like municipal debt — that it left untouched even in the depths of the 2008 crisis. Lawmakers from both parties and activists have called on the central bank and Treasury to offer more support for smaller localities.
U.S. stocks rose and global markets rallied on Monday as governments around the world discussed when and how to reopen businesses and get their economies back on track.U.S. stocks rose and global markets rallied on Monday as governments around the world discussed when and how to reopen businesses and get their economies back on track.
The S&P 500 rose more than 1 percent. European benchmarks rose 1 to 3 percent after a broadly higher day in Asia. The S&P 500 rose more than 1 percent. European benchmarks rose 1 to 3 percent after a broadly higher day in Asia.
European governments, including Italy and France, have been discussing ways to reopen in recent days. New Zealand is loosening restrictions on retailers, restaurants, construction sites and schools after only one new case of the virus was reported Monday.European governments, including Italy and France, have been discussing ways to reopen in recent days. New Zealand is loosening restrictions on retailers, restaurants, construction sites and schools after only one new case of the virus was reported Monday.
In the United States, governors in Colorado, Georgia, Michigan and other states are deciding how and when to start easing some social-distancing restrictions. Any opening will be slow and painful, but investors signaled optimism that the recovery could begin soon.In the United States, governors in Colorado, Georgia, Michigan and other states are deciding how and when to start easing some social-distancing restrictions. Any opening will be slow and painful, but investors signaled optimism that the recovery could begin soon.
The clearest signal of this on Monday was a rally in companies that stand to gain from the lifting of restrictions on travel and public gathering. Department store Kohl’s rose nearly 18 percent, while shares of Nordstrom and Gap were also sharply higher, for example.The clearest signal of this on Monday was a rally in companies that stand to gain from the lifting of restrictions on travel and public gathering. Department store Kohl’s rose nearly 18 percent, while shares of Nordstrom and Gap were also sharply higher, for example.
Hotel operators like Hilton Worldwide and Marriott International also jumped.Hotel operators like Hilton Worldwide and Marriott International also jumped.
Oil prices plunged on Monday, with the American benchmark hurtling toward $10 a barrel, as fears about a global glut in crude continued to weigh on energy markets.Oil prices plunged on Monday, with the American benchmark hurtling toward $10 a barrel, as fears about a global glut in crude continued to weigh on energy markets.
Since last week, investors have been panicked about oil storage facilities running out of capacity as producers continued to pump oil even as demand collapsed. That concern is most acute in the United States, where storage facilities in Cushing, Okla., are expected to reach capacity in May.Since last week, investors have been panicked about oil storage facilities running out of capacity as producers continued to pump oil even as demand collapsed. That concern is most acute in the United States, where storage facilities in Cushing, Okla., are expected to reach capacity in May.
It’s one reason the collapse in futures of American crude has been so much sharper than the global benchmark. On Monday, West Texas Intermediate crude, the U.S. benchmark, fell about 24 percent to just below $13 a barrel. At the same time, Brent crude, the global benchmark, was down about 7 percent to just below $20 a barrel.It’s one reason the collapse in futures of American crude has been so much sharper than the global benchmark. On Monday, West Texas Intermediate crude, the U.S. benchmark, fell about 24 percent to just below $13 a barrel. At the same time, Brent crude, the global benchmark, was down about 7 percent to just below $20 a barrel.
One factor behind the difference in price is that the Cushing facilities are landlocked, reachable only by pipeline, whereas Brent supplies can be reached by boat and either stored there or placed at facilities around the globe. Investors betting on an eventual rebound in oil prices are filling oil tankers up — with as much as two million barrels per vessel — and parking them out at sea, The New York Times’s Stanley Reed reported.One factor behind the difference in price is that the Cushing facilities are landlocked, reachable only by pipeline, whereas Brent supplies can be reached by boat and either stored there or placed at facilities around the globe. Investors betting on an eventual rebound in oil prices are filling oil tankers up — with as much as two million barrels per vessel — and parking them out at sea, The New York Times’s Stanley Reed reported.
“I can send a boat to the Brent field; I can’t send a boat to Cushing, “ said Stuart Joyner, an analyst at Redburn, a market research firm.“I can send a boat to the Brent field; I can’t send a boat to Cushing, “ said Stuart Joyner, an analyst at Redburn, a market research firm.
Analysts say the collapse of American crude prices into negative territory on April 20 spooked investors.Analysts say the collapse of American crude prices into negative territory on April 20 spooked investors.
Boeing plans to resume operations in South Carolina next week, bringing several thousand employees back to work on the 787 Dreamliner about a month after sending them home. Many celebrations and milestones have been delayed, but grief is in abundance, and the greeting card aisle offers a snapshot of the virus’s wicked toll. Sympathy cards are nearly all sold out.
Those who can work remotely will continue to do so, and managers will tell the recalled workers when to return to Boeing’s complex in North Charleston, the company said. CVS, one of the nation’s largest sellers of greeting cards, said that it was seeing “higher demand for sympathy cards than most other types of greeting cards during the pandemic” and was experiencing shortages in certain stores. Shoppers across the country have posted on social media that their local Winn Dixie or ShopRite was running out of cards.
“The health and safety of our teammates, their families and our community is our shared priority,” Brad Zaback, Boeing’s South Carolina site leader and general manager for the 787, said in a statement. “Our approach to resumption of operations ensures we honor that priority by ensuring personal protective equipment is readily available and that all necessary safety measures are in place to resume essential work.” Some of the shortages have been caused by distribution problems. Pharmacies and grocery chains, focused on keeping their shelves stocked with household staples, are not allowing card companies to come into the stores and restock regularly.
The returning employees will find facilities modified to prevent the spread of the coronavirus. Restrooms will be pressure washed, and communal spaces will be thoroughly cleaned. There will be hand-sanitizing stations and visual reminders to maintain cleanliness and distance from one another. The company said that it was encouraging workers to bring face coverings and that it would provide masks to those working in proximity of others. With stores running out and people unable to leave their homes, many card sales have moved online and are at record levels, suppliers say. On Etsy, the online marketplace for crafts and jewelry, searches for sympathy cards more than doubled from March 1 to April 17 compared with the same period a year ago.
Before the pandemic, the greeting card industry had experienced declining sales. Some big retailers recently cut back on the aisle space devoted to cards. The parent company of high-end card retailer Papyrus declared bankruptcy in January and closed all of the brand’s stores. But virtual communication has its limits, especially in times of grief. With many people unable to attend funerals or drop off food for a grieving neighbor, or even offer an embrace, mailing a sympathy card seems more necessary.
Boeing expects it to take two to three years before air travel returns to pre-pandemic levels, said David L. Calhoun, its chief executive, at a shareholder meeting on Monday. He said the aircraft manufacturer expected it to be several years more before the industry’s longer-term growth trend recovers. Boeing has resumed production in Washington State, where about 27,000 employees returned to work last week. Barbara Macchiaroli’s longtime companion died of the virus the day after Easter in a nursing home. He was 90. They haven’t had a funeral, but the cards — 34 so far — have been arriving at her house every day. The senders have written memories about his beautiful singing voice, his devotion to the local Kiwanis Club and his love of Ford Model A’s.
“The cards have comforted me in a way I never expected they would,” she said. “I think it is because I can’t be with people right now.”
Black and Latino Americans entered the coronavirus crisis with lower incomes and less wealth than whites. In the early months of the outbreak and its recession, they suffered disproportionately high rates of infection and job loss.Black and Latino Americans entered the coronavirus crisis with lower incomes and less wealth than whites. In the early months of the outbreak and its recession, they suffered disproportionately high rates of infection and job loss.
Now, as public officials around the country take initial steps to lift restrictions on economic activity, those black and Latino workers will bear a higher share of the health risks in getting back to work.Now, as public officials around the country take initial steps to lift restrictions on economic activity, those black and Latino workers will bear a higher share of the health risks in getting back to work.
It is a pick-your-poison fact of a crisis that has exacerbated racial and socioeconomic inequality in the United States: The pandemic has knocked millions of the most economically vulnerable Americans out of work. Rushing to reopen, their employers could offer them a financial lifeline, but at a potentially steep cost to their health.It is a pick-your-poison fact of a crisis that has exacerbated racial and socioeconomic inequality in the United States: The pandemic has knocked millions of the most economically vulnerable Americans out of work. Rushing to reopen, their employers could offer them a financial lifeline, but at a potentially steep cost to their health.
Americans who earn $50,000 a year or less are more than twice as likely to say they or a family member have lost jobs amid the crisis compared with those who earn more than $150,000, according to national polling data by the digital research firm Civis Analytics. Higher earners and whites are far more likely to say they can work from home during the pandemic than lower earners and black and Latino Americans, according to an April poll for The New York Times by the online research firm SurveyMonkey.Americans who earn $50,000 a year or less are more than twice as likely to say they or a family member have lost jobs amid the crisis compared with those who earn more than $150,000, according to national polling data by the digital research firm Civis Analytics. Higher earners and whites are far more likely to say they can work from home during the pandemic than lower earners and black and Latino Americans, according to an April poll for The New York Times by the online research firm SurveyMonkey.
Researchers from the JPMorgan Chase Institute warned this month in a report that the coronavirus recession would hit black and Hispanic families harder in terms of lost income, forcing them to cut back their spending to a greater degree than whites, because black and Hispanic families have fewer savings to fall back on.Researchers from the JPMorgan Chase Institute warned this month in a report that the coronavirus recession would hit black and Hispanic families harder in terms of lost income, forcing them to cut back their spending to a greater degree than whites, because black and Hispanic families have fewer savings to fall back on.
“There could be immense and devastating income effects that could be involved with this evolving depression,” said William A. Darity Jr., an economist at the Sanford School of Public Policy at Duke University, who is a leading scholar of economic discrimination in the United States. Inequality, he said, “has been horrendous in recent years, and I can only imagine those disparities would get worse.”“There could be immense and devastating income effects that could be involved with this evolving depression,” said William A. Darity Jr., an economist at the Sanford School of Public Policy at Duke University, who is a leading scholar of economic discrimination in the United States. Inequality, he said, “has been horrendous in recent years, and I can only imagine those disparities would get worse.”
A growing number of companies are returning loans they received from the initial $349 billion Small Business Administration stimulus funds after public outcry over funds that were going to large corporations, including those that had other financing options.A growing number of companies are returning loans they received from the initial $349 billion Small Business Administration stimulus funds after public outcry over funds that were going to large corporations, including those that had other financing options.
More than $2 billion from the first round has been declined or returned to the program, the head of the S.B.A. said on Twitter on Monday. A spokesman said the canceled loans would go back into the program’s next round, which opened Monday.More than $2 billion from the first round has been declined or returned to the program, the head of the S.B.A. said on Twitter on Monday. A spokesman said the canceled loans would go back into the program’s next round, which opened Monday.
Federal officials clarified last week that the loans should not go to large public companies with access to other sources of capital. A New York Times analysis found that roughly a dozen publicly traded companies had previously talked about their access to capital only to apply for loans through the program.Federal officials clarified last week that the loans should not go to large public companies with access to other sources of capital. A New York Times analysis found that roughly a dozen publicly traded companies had previously talked about their access to capital only to apply for loans through the program.
The companies that have returned the money so far range from major chains to lower-profile firms:The companies that have returned the money so far range from major chains to lower-profile firms:
Nathan’s Famous said on Monday that it would return the $1.2 million loan it received from the Small Business Administration. And in an example of the rippling effects of coronavirus-related disruptions, it disclosed that Smithfield Foods, the meat processor that has temporarily shut down four facilities, is its primary manufacturer of hot dogs. Nathan’s said three of its company-owned locations are open, and it is seeing higher grocery store sales of hot dogs, but most of its franchised locations are in places that are closed or experiencing significantly less traffic — malls and movie theaters, airports and rest stops. Nathan’s Famous said on Monday that it would return the $1.2 million loan it received from the S.B.A. And in an example of the rippling effects of coronavirus-related disruptions, it disclosed that Smithfield Foods, the meat processor that has temporarily shut down four facilities, is its primary manufacturer of hot dogs. Nathan’s said three of its company-owned locations are open, and it is seeing higher grocery store sales of hot dogs, but most of its franchised locations are in places that are closed or experiencing significantly less traffic — malls and movie theaters, airports and rest stops.
The Los Angeles Lakers confirmed they had received and repaid a $4.6 million loan. The National Basketball Association team is among the most valuable franchises in all of sports and is said to be worth billions.The Los Angeles Lakers confirmed they had received and repaid a $4.6 million loan. The National Basketball Association team is among the most valuable franchises in all of sports and is said to be worth billions.
Shake Shack, the owner of Ruth’s Chris Steak Houses, the chain Kura Sushi and the restaurant company J. Alexander’s Holdings said they would return roughly $51 million in combined loans. Independent restaurateurs have said that the major chains obtained funding while they were shut out of the program.Shake Shack, the owner of Ruth’s Chris Steak Houses, the chain Kura Sushi and the restaurant company J. Alexander’s Holdings said they would return roughly $51 million in combined loans. Independent restaurateurs have said that the major chains obtained funding while they were shut out of the program.
IDT Domestic Telecom, a communications and money transfer company, said it would return a $10 million loan.IDT Domestic Telecom, a communications and money transfer company, said it would return a $10 million loan.
Ultralife Corporation, which makes batteries and communications equipment, said it would return a roughly $3.5 million loan. BK Technologies, which produces two-way radios, said it was repaying a roughly $2.2 million loan to its bank.Ultralife Corporation, which makes batteries and communications equipment, said it would return a roughly $3.5 million loan. BK Technologies, which produces two-way radios, said it was repaying a roughly $2.2 million loan to its bank.
Ballantyne Strong, a North Carolina holding company, said it would repay its $3.1 million loan.Ballantyne Strong, a North Carolina holding company, said it would repay its $3.1 million loan.
Hallmark Financial Services, a Texas-based insurer, said it was repaying an $8.3 million loan. The company says it “markets, underwrites and services” more than $700 million every year.Hallmark Financial Services, a Texas-based insurer, said it was repaying an $8.3 million loan. The company says it “markets, underwrites and services” more than $700 million every year.
Auto dealership operators were among the companies quick to start returning their money. Penske Automotive Group received and returned $66 million, it said. AutoNation, the nation’s largest chain of car dealers, said it gave back $77 million. Group 1 Automotive returned $1 million.Auto dealership operators were among the companies quick to start returning their money. Penske Automotive Group received and returned $66 million, it said. AutoNation, the nation’s largest chain of car dealers, said it gave back $77 million. Group 1 Automotive returned $1 million.
The German automaker Mercedes-Benz has resumed U.S. production at two Southern factories — a sport-utility vehicle plant in Alabama and a delivery van plant in South Carolina — as those states begin lifting or loosening orders that have kept residents at home for weeks and most businesses closed.The German automaker Mercedes-Benz has resumed U.S. production at two Southern factories — a sport-utility vehicle plant in Alabama and a delivery van plant in South Carolina — as those states begin lifting or loosening orders that have kept residents at home for weeks and most businesses closed.
One plant, in Vance, Ala., employs 3,700 people, and the other, in North Charleston, S.C., employs more than 1,100. Boeing plans to resume operations in South Carolina next week, bringing several thousand employees back to work on the 787 Dreamliner about a month after sending them home. Those who can work remotely will continue to do so, and managers will tell the recalled workers when to return to Boeing’s complex in North Charleston, the company said.
More than a dozen other factories across the South operated by foreign automakers are also set to return to production. Volkswagen plans to reopen its plant in Chattanooga, Tenn., on May 3. A day later, Toyota plants in Kentucky, Alabama, Mississippi, Texas and Indiana and Hyundai-Kia plants in Georgia and Alabama are expected to go back to work. Honda and Volvo expected to resume production May 11. None of the plants are unionized.
General Motors, Ford Motor and Fiat Chrysler are in talks with the United Automobile Workers union about when and how to reopen their plants to ensure workers are safe from the spread of the coronavirus. Most of those automakers’ plants are in Michigan, which has been hit harder by the virus than most other states.
General Motors said it was suspending its quarterly dividend and any share buybacks to strengthen its cash position. When it halted North American production a month ago, the automaker said it was laying off 6,500 salaried workers and cutting executive pay. In labor negotiations last year that prompted a six-week strike, the United Automobile Workers union noted that G.M. had spent more than $10 billion on stock buybacks since 2015.General Motors said it was suspending its quarterly dividend and any share buybacks to strengthen its cash position. When it halted North American production a month ago, the automaker said it was laying off 6,500 salaried workers and cutting executive pay. In labor negotiations last year that prompted a six-week strike, the United Automobile Workers union noted that G.M. had spent more than $10 billion on stock buybacks since 2015.
Reporting was contributed by Jim Tankersley, Neal E. Boudette, Jessica Silver-Greenberg, David Enrich, Jesse Drucker, Stacy Cowley, Stanley Reed, Neil Irwin, David McCabe, Niraj Chokshi, Jason Karaian, Kevin McKenna, Liz Alderman, Jack Ewing, Ben Dooley, Jeff Sommer, Ben Casselman, Carlos Tejada, Kevin Granville and Daniel Victor. Reporting was contributed by Stacy Cowley, Michael Corkery, Sapna Maheshwari,Jim Tankersley, Neal E. Boudette, Jessica Silver-Greenberg, David Enrich, Jesse Drucker, Stacy Cowley, Stanley Reed, Neil Irwin, David McCabe, Niraj Chokshi, Jason Karaian, Kevin McKenna, Liz Alderman, Jack Ewing, Ben Dooley, Jeff Sommer, Ben Casselman, Carlos Tejada, Kevin Granville and Daniel Victor.