In December, Congress approved $284 billion for a new round of lending, including second loans to the hardest-hit businesses. This time, the Small Business Administration was determined to crack down. Instead of approving applications from banks immediately, it held them for a day or two to verify some of the information.
That caused — or exposed — a cascade of problems. Formatting applications in ways that will pass the agency’s automated vetting has been a challenge for some lenders, and many have had to revise their technology systems almost daily to keep up with adjustments to the agency’s system. False red flags, which can require time-consuming human intervention to fix, remain a persistent problem.
Numerated, a technology company that processes loans for more than 100 lenders, still has around 10 percent of its applications snarled in error codes, down from a peak of more than 25 percent, said