Banks processing the Government’s $3 trillion loan program have received over $10 Billion in fees and there is more to come from the new moneys just allotted by Congress for small businesses.
Taxpayers provided the money for the loans, which were guaranteed by the Small Business Administration.
The Department of Treasury fact sheet, all federally insured banks and credit unions could process the loans, which ranged in amount from tens of thousands to $10 million. The banks acted essentially as middlemen, sending clients’ loan applications to the SBA, which approved them.
For every transaction made, banks took in 1% to 5% in fees, depending on the amount of the loan. according to government figures. Loans worth less than $350,000 brought in 5% in fees while loans worth anywhere from $2 million to $10 million brought in 1% in fees.
Congress is adding $320 billion more into the program, called the Paycheck Protection Program.