Attempts to streamline distribution of the government-backed loans inadvertently left a small number of businesses unable to access the application, bank says

Royal Bank of Canada acknowledged Friday that an attempt to streamline distribution of emergency government-backed loans to small businesses inadvertently left a small number of qualified recipients unable to access the online application.
Canada’s biggest bank chose to isolate 700,000 business accounts deemed eligible and provide them with an application banner that would lead to a three-question application. Others accounts were not provided with the banner, including some firms that met all criteria laid out by the federal government, such as payroll size and bank account type.
“It was our mistake,” Christianne Paris, senior vice-president of Business Financial Services at RBC, said Friday of the omissions.
“We’re learning as fast as we can with this program (and) we’re trying to correct anything that we missed as we were building it.”
She said the oversights — some of which required clarification from Export Development Canada, the Crown corporation handling the CEBA loans — accounted for only 0.4 per cent of those believed to be qualified for loans of up to $40,000 under the federal government’s $25 billion Canadian Emergency Business Account.
RBC had approved 61,764 applications as of 3 p.m. Friday, for a total of more than $2.47 billion in loans, she said. 
When the government program was announced last month as part of a relief package for businesses hit hard by mandatory shutdowns to try to contain the fast-spreading COVID-19 pandemic, the team at RBC tasked with getting the cash to clients decided isolating those eligible to apply and doing it fully online via a “self-serve” channel was the most efficient way, Paris said.
She added that this was intended to avoid having businesses that didn’t qualify go through a process and be rejected, and to reduce the need for bank personnel to work at call centres during the pandemic. The latter is now being reconsidered.
“We went in thinking this would be better,” Paris said, adding that the loans are not traditional bank business but rather a fulfillment of a government initiative with the bank acting as an agent of Export Development Canada (EDC). 
“It really is our intent to have as many Canadians who need this money (and qualify for it get it into their accounts),” she said.
Some 25,000 businesses that were initially left off RBC’s list of firms with access to online applications were put on it once Export Development Canada (EDC) informed the bank it could approve loans to those businesses, Paris said. These include firms domiciled in Canada whose owners live elsewhere, as well as certain companies with holding company structures that nevertheless have operating income. 
“We’re reacting to the situation in real time,” Paris said, adding that many firms contacting the bank to say they should have received the application banner don’t actually qualify.
“The biggest (disqualification) by far is not having a business account,” she said.
However, “more and more” firms that are deemed to meet EDC requirements, which include not being in arrears on any other loan, “are going onto that pile” that can apply online, Paris said. 
As the Financial Post reported last week, owners of business from restaurants to dental practices were upset when they found themselves unable to apply for CEBA loans through RBC after the program launched April 9. 
It was a frustrating week for Arvind Aggarwal, who said Friday he is counting on the CEBA funds “to survive a few months” since his tutoring business, Learna Brampton, was closed on March 15.
He contacted the Post on Friday evening to say he had “finally received the application link” from RBC and “successfully submitted the application for CEBA.”
Several business owners told the Post they spent hours on the phone over the past week trying to figure out how to apply.
Paris said Friday that the bank was looking into more phone lines and personnel to handle calls now that it’s clear more queries than expected are being generated by the online application process.
The Canadian Federation of Independent Business says nearly 80 per cent of small businesses in Canada are fully or partially closed due to the COVID-19 pandemic and efforts to contain it, with little or no revenue coming in as their bills continue to pile up. Many are hoping to use the CEBA loans to keep their business operating until a government-backed wage-subsidy program kicks in.
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