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We did our PPP loan for our agency through a small regional bank that bent over backwards to help local businesses understand the legislation and apply on time.
by 1123581321 7y ago
We did our PPP loan for our agency through a small regional bank that bent over backwards to help local businesses understand the legislation and apply on time. The bank paid a bunch of salaries to be able to do this. It’s completely reasonable that they earned a small, disclosed-in-advance fee from our loan to pay for those operations.
- alistairSH 7y agoBanks took almost 3% of the total bailout funds for loans that have almost zero risk (government backed and almost exclusively made to existing customers). On a $350k loan, the fee was 5%, or $17.5k. On a larger loan, the fee as a % goes down, but the total value goes up. These larger loans, to my knowledge, carry no more risk, nor any more work by the bank. Yes, the banks should earn a minimal (and probably fixed) filing fee. No, they should not receive 3% of the amount set aside for small-business assistance.
- 1123581321 7y agoI agree those numbers are accurate. If I understand correctly, you intend for $17.5k to be a shockingly high number, but smaller banks already receive percentage origination fees on large loans that cover fixed operation costs and are not overly profitable.