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My understanding is there is actually some risk. If they do the paperwork wrong, or if the regulations change randomly (which they have a bunch of times already
by malkuth23 6y ago
My understanding is there is actually some risk. If they do the paperwork wrong, or if the regulations change randomly (which they have a bunch of times already), the bank could theoretically be on the hook. Some of this reportedly happened in the last recession/bailout, so the banks are a bit gun shy.
I am not a banker, so this is all second hand information I have read on r/smallbusiness and other forums while trying to figure out my own stuff.
Don't get me wrong, I think they are getting paid a ton, probably too much, but it is not zero risk.
- tempsy 6y agoSure there’s probably some compliance risk here but that’s why most businesses are only working with existing clients. Very few are approving applications from brand new customers they’ve never had a relationship with.
- tobyjsullivan 6y agoThe banks considered that risk and said they wouldn't participate unless it was eliminated.[0] I can't find any follow-up article covering if or how that resolved but I notice most banks seem to have participated in the end. [0] https://www.reuters.com/article/us-health-coronavirus-stimulus-banks-exc/exclusive-top-u-s-banks-may-shun-small-business-rescue-plan-on-liability-worries-sources-idUSKBN21K075 https://www.reuters.com/article/us-health-coronavirus-stimul...