Banks are generally incentivized to favor larger small businesses over smaller ones, experts say, and the legislation that created the PPP program may be helpless to stop it.
In class-action lawsuits
The smallest businesses “are the most desperate,” says Dylan Ruga, an attorney at Stalwart Law Group in Los Angeles, which filed the class-action suits. Such firms typically have fewer cash reserves and so are more likely to lay off workers and close down sooner amid a pandemic that has shut down much of the U.S. economy to minimize contagion.
Wells Fargo spokesman Manuel Venegas declined comment, but added, “Wells Fargo is working as quickly as possible to assist small business customers with the Paycheck Protection Program in compliance with the regulations and guidance provided by the U.S. Treasury and the SBA.” Yet he says that when he asked for the type of information needed, he didn’t get an answer. Then, after the PPP program ran out of money, he was told his application was approved by Chase and simply needed to be cleared by the SBA.
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