RALEIGH – North Carolina’s banks and others around the country are gearing up for another expected onslaught of COVID-19 relief loans once new funding is approved by Congress.

The House is expected to pass Thursday afternoon a new authorization of $341 billion, augmenting the initial $349 billion Paycheck Protection Plan targeting small businesses that was quickly exhaused.

But some banking officials say most of the new money may already be committed.

In a note to executives on Wednesday, the head of the North Carolina Bankers Association said the hope is to process “loans as soon as possible” and that executives are working to avoid being “caught by surprise” by the Small Business Administration. The SBA is overseeing the massive program.

“[Thursday]  at 12:00 noon, the House will take up the Senate bill appropriating new funding for the Paycheck Protection Program. The House will send the bill to the President shortly after final passage, and he is expected to sign it into law quickly,” NC Bankers CEO Peter Gwaltney wrote.

Head of NC Bankers calls for quick boost COVID-19 loans as $349B fund runs out

“Treasury wants to expedite the process of getting the new funding to the SBA so that banks can resume processing loans as soon as possible.

“A senior Treasury official told the [American Bankers Association CEO] Rob Nichols [Wednesday] that the E-Tran system could be open for processing as early as Friday morning. Rob has asked the SBA to give the banking industry advance notice when it plans to open the E-Tran system so that no one is caught by surprise.”

Earlier in the week, Gwaltney noted banks still have questions about the program.

“We are still waiting for guidance on the many questions the banking industry has submitted to Treasury, including the 10-Day Rule, time and process for payment of origination fees, forgiveness, and much more,” Gwaltney said.

“We are watching closely for the guidance, and will send it to you just as soon as it’s released.”

Banking groups say the volume of applications already sent to the SBA makes it likely that much, if not all, the new money will go to those already in the queue. Any new applicants would likely miss out on this funding round.

“The majority if not all of the funding Congress is considering right now is already exhausted,” said Nick Simpson, a spokesman with the Consumer Bankers Association.

Roughly a third of the new money has been set aside for smaller banks, which may allow a few new applicants to squeeze into the queue. However, small banks have said for the last two weeks that they have been swamped with applications — doing an entire year’s worth of loans in a weekend — so it’s likely most of that money is now spoken for as well.

There were more than 1.7 million loans approved in the first round of the program. More than 39,000 NC firms received funding totalling some $8 billion.

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But the law that created the program has been criticized because it made loans available to large, publicly traded companies like restaurant and hotel chains because the loans were based on workforce size at a company’s individual locations. Those loans sapped hundreds of millions of dollars from the available pool.

The SBA appeared to be approving smaller loans as the first round progressed, an indication that more loans to smaller companies were being approved. As of April 13, the average size of a loan was nearly $240,000 and on April 16 it was $206,000.

The loans, which can be up to $10 million, are based on a company’s payroll size and offer forgiveness if the money is spent to retain workers or rehire laid-off workers. Many companies that have loans are starting to bring back their staffers, and some states are easing their restrictions on non-essential work, allowing businesses to reopen.