New York (AFP)

One week after its launch, a titanic federal loan program for American small and medium-sized businesses devastated by the coronavirus crisis is far from reaching its full potential.

The Trump administration and major banks have welcomed impressive figures for $ 350 billion in aid loans.

While companies in difficulty have received large sums, many SMEs have been unable to apply, faced with IT problems and the fact that banking institutions favor certain customers.

Other hard-hit companies have criticized the architecture of the program, which presupposes an unrealistic rapid economic rebound in regions where the pandemic has been particularly destructive.

"We don't know anyone who has already received money," said Mavis Early, executive director of the New Orleans Area Hotels and Accommodations Association.

Jim Friedlander, president of Arrangements Abroad, which organizes trips abroad for universities and museums, tells him that his banks were not ready to process his request.

"All this money disappears before my eyes and goes into the pocket of other people. I'm afraid there is nothing left for us," he worries.

- Technical failures -

The loan program is part of the massive $ 2.2 trillion plan approved in late March to support the economy of the United States, which has been hit hard by containment measures and the closure of countless businesses.

Businesses with fewer than 500 employees can apply for loans, which are supposed to help them pay payroll or rent for eight weeks.

The loans are granted by the banks but the federal government guarantees them and cancels the debt if the beneficiary company retains its employees or rehires those who were laid off by June 30.

A spokesperson for the Small Business Administration (SBA), the government agency that guarantees the loans, said on Thursday morning that more than 450,000 applications had been made and that $ 118 billion had already been approved.

Over the whole of 2019, the SBA validated 58,000 loans with a total value of $ 28 billion, according to an annual report.

The American secretary of the Treasury Steven Mnuchin assured Thursday, on the chain CNBC, that even if the banks "were overwhelmed", they will answer all the requests of the companies needing cash.

Mnuchin asked Congress to approve an additional $ 250 billion for the program in the next phase of the federal plan.

Questions about the goodwill of the banks emerged this week after an SBA official in Nevada accused the establishments of dragging their feet on the pretext of too cumbersome paperwork.

But the main obstacle has turned out to be the SBA's computer system, which has only worked "intermittently" since the start of the program, preventing loan officers from entering data manually, an official said. of a bank.

The big banking establishments assured to do their best.

Faced with the exceptional volume, Citigroup thus accepts requests "in stages", indicates a spokesperson for the bank, who adds that a form is available on the group's website.

"We have received 170,000 expressions of interest and are working to help our customers," said a spokesperson for Wells Fargo.

- Subsidies -

In addition to technological problems, some sectors feel that the loan program is ill-suited to their needs.

Andrew Rigie, executive director of the New York Hotel Alliance, says it is unrealistic to ask companies to recover their pre-crisis payroll in just two months.

"Restaurants and bars do not even know if they will be able to reopen in June and even less if they will be open long enough to know the staffing level," Rigie wrote in Forbes magazine.

He hopes that Congress will amend the program during the next legislative phase.

"We need grants, not loans and more debt," he said in an email to AFP.

© 2020 AFP