Capital One still not yet accepting applications for SBA's Paycheck Protection Program
Nearly one week after the uneven rollout of the Small Business Administration’s Paycheck Protection Program, banking giant Capital One Financial Corp. has yet to start accepting loan applications — an outlier of sorts in that respect.
The McLean bank, which reported about $375 billion in assets at the end of 2019, said early on in the process it was testing a small number of digital apps to enable more electronic document uploads and that it anticipated being able to accept applications online “shortly,” though no timeline was given. The loans are part of the $349 billion Paycheck Protection Program, which offers forgivable loans to businesses and was first authorized as part of the $2.2 trillion CARES Act passed by Congress in late March to deal with the economic damage associated with the spread of the novel coronavirus.
But Capital One customers have expressed their dismay at the company's delay.
“We're working around the clock to finalize our digital app process for the Paycheck Protection Program to ensure it's fully functional and compliant & anticipate being able to accept applications online shortly,” Capital One (NYSE: COF) said in a response to one angry customer's tweet Thursday afternoon.
The company, on its website, also asked for customers to be patient. "To ensure your application is received and processed as expeditiously and accurately as possible, we ask that you wait for the digital application process to be up and running before submitting your information," the bank said on its website. "We ask that you not go to a branch or contact our call center regarding the Paycheck Protection Program, as applications will need to be submitted online."
In response to questions for this story, the bank provided a statement that mirrors what it also states on its website. That statement is below.
In the meantime, however, the lack of information and delays have been frustrating for the bank's customers, said Keith Groshans, owner of design studio Rocket Juiced Studio, a digital communications services firm based in Long Island, New York. The first-come, first-serve nature of the PPP loans means the clock is ticking on the funding, regardless of whether Congress authorizes more money. Many banks offering PPP loans are also prioritizing their own customers first, making it difficult to approach or cold-call new banks.
He said he has been refreshing Capital One's website every hour for updates from the company, adding that he expects more from the company given its size and scale than he would from smaller financial institutions.
“I could understand if I was going through my local credit union,” Groshans said in an interview. “For Capital One to not have any information for when they expect it to roll it out is concerning, because I want to be sure I get in before it runs out of money.”
Groshans said he might end up switching to another bank that would let him into the program if Capital One “continues to drag its feet.” That's despite the fact that he's been otherwise happy with Capital One's overall performance and service for the past 10 years that he's been its customer.
Capital One's delay in accepting applications increasingly makes it an outlier in spite of the rocky rollout of the PPP program. Thus far, a wide spectrum of banks had begun accepting loan applications for the program, from large banks such as Bank of America Corp. (NYSE: BAC) and JPMorgan Chase & Co. (NYSE: JPM), to regional banks such as Atlantic Union Bank (NASDAQ: AUB) to small banks such as Tysons Old Dominion National Bank. Wells Fargo & Co. (NYSE: WFC), one of the nation's largest SBA lenders, almost immediately hit its $10 billion lending cap, but then saw that cap lifted Wednesday by regulators to account for the high demand among its customer base.
Here is Capital One's full statement, which refers customers back to its website:
"We understand this is an extraordinarily difficult time for many of our business customers. We are working around the clock to finalize our digital application process for the new Small Business Administration (SBA) Paycheck Protection Program to ensure that it is fully functional and compliant. We are currently testing the effectiveness of our submission process with a small number of existing business banking customers. We anticipate being able to accept applications online shortly.
To ensure applications are received and processed as expeditiously and accurately as possible, we ask that businesses wait for the digital application process to be up and running before submitting any information. We also request that customers do not go to a branch or contact our call center regarding the Paycheck Protection Program, as applications will need to be submitted online.
Please note that business owners who apply for a Paycheck Protection Program Loan through Capital One must have a business banking relationship with us as of February 15, 2020. For businesses who are not an existing Capital One customer, we encourage them to contact their primary bank for support with the Paycheck Protection Program.
Business owners will also need to meet the requirements provided by the SBA to be eligible for these loans, and provide all necessary information and documentation. Please reference this SBA page for additional details on eligibility."
Meanwhile Capital One's customers are piling onto Twitter to air their complaints.