BoA says applications for rescue loans already account for 10% of the Congress approved loan program

The Bank of America (NYSE:BAC) announced on Monday that applications for emergency rescue loans have skyrocketed in recent weeks. As per the bank, the demand is currently accounting for roughly 10% of the total amount that the U.S Congress has allocated. The bank said that 177,000 U.S small businesses have so far submitted applications requesting financing worth £26.52 billion in total. The figure represents the current applications that the bank has received and not the ones that have been approved by the Small Business Administration. For the Paycheck Protection Program, the BoA took the lead in establishing its portal which, according to the bank, was quickly overwhelmed with applications.

Increased Demand For Rescue Loans Is Attributed To Small Business Owners

The sharp increase in demand for the aforementioned rescue loans is attributed to the small business owners in the United States that are actively submitting applications for financing on an increased risk of being left out of the £285 billion program. In a recent statement, U.S Treasury Secretary (USTR) Steven Mnuchin had reiterated that in such an event, he would step up to request more financing from the U.S Congress. The process, however, is likely to be lengthy with fiscal conservatives expected to stand against the request. The £285 billion loan program is a component of the U.S government’s £1.63 trillion ($2 trillion) Coronavirus stimulus that was signed in the last week of March. The component is specifically targeted at the U.S small businesses. Federal lawmakers had previously requested the U.S banks to help role out the rescue package. The loan program, as per the lawmakers, will help businesses in paying their staff and survive the economic challenges amidst the government-imposed lockdown that severely hurts operations.

Wells Fargo Limits Participation In Government’s Loan Program To $10 Billion

In separate news, Wells Fargo also capped its contribution to the government’s loan program at £8.14 billion ($10 billion) on Monday. The American multinational financial services company attributed the move to regulatory constraints which value its current assets at £1.59 trillion ($1.95 trillion). At £17.10 per share, the Bank of America is currently trading around 40% down year to date. Its performance in 2019, on the contrary, was recorded fairly upbeat with an annual gain of around 40%. Starting at the end of February, BoA’s downward rally has wiped all of the gains that it posted in 2019. The Bank of America is currently valued at £850 million ($1.05 billion).