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Wells Fargo hits cap on loans for SBA relief program

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April 6, 2020

Small businesses banking with Wells Fargo and looking to the financial institution to help provide some of the $350 billion in emergency loans from the federal CARES Act, to help them meet payroll and other expenses, will instead find themselves shopping for another lending facility.

Wells Fargo, operating under a regulatory asset cap of $10 billion, has shut the loan window on small businesses, claiming it has already exhausted its funding capacity, according to a San Francisco Business Times report.

"While we are actively working to create balance sheet capacity to lend, we are limited in our ongoing ability to use our strong capital and liquidity position to extend additional credit," Charlie Scharf, Wells Fargo CEO told the media outlet. "We are committed to helping our customers during these unprecedented and challenging times but are restricted in our ability to serve as many customers as we would like under the PPP."

The SBA CARES act funding program kicked off on April 3, but Wells Fargo was among the banks that did not accept applications on that day. Instead, on April 4, its website stated it would allow small business customers to "express interest" in borrowing under the program. The company said it will review all the expressions of interest that were submitted through April 5, 2020 and provide updates to clients.

The bank has also limited its refinancing of jumbo mortgages to its customers with at least $250,000 of liquid assets with the bank.

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