Dive Brief:

• The portal to access a second round of Paycheck Protection Program (PPP) funds worth $320 billion was set to reopen at 10:30 a.m. Monday. However, the system was down as early as 10:34, Bloomberg reported, citing a person familiar with the matter.
• Bank of America CEO Brian Moynihan, in an interview on CBS's "Face the Nation" on Sunday, said the first-come, first-served nature of the program was one of its biggest drawbacks. "The difference between this program and unemployment is if you qualify for this program, it’s like getting unemployment authorization and then having a footrace to the office," Moynihan said in a transcript seen by Banking Dive. "We need to take away the first-come, first-served aspects of this and make sure it's fully funded, because at the end of the day, it's going to where people want it: small businesses."
• The initial $350 billion funneled through the program were exhausted in 13 days. Trade group representatives expect a much shorter window this time. Paul Merski, an executive vice president at Independent Community Bankers of America, predicted "a burn rate of $30 [billion], $40 billion a day with all of the loans already in the pipeline," according to The Washington Post. Other advocates were less optimistic. "As soon as they turn the switch on, that money will be gone," Tony Wilkinson, the chief executive of the National Association of Government Guaranteed Lenders, told The New York Times.

Dive Insight:

The Small Business Administration (SBA) told lenders Sunday that it would pace the rate of applications accepted into its E-Tran system so that all lenders could submit at the same rate, an agency spokesman said. The agency asked banks to submit applications in batches of at least 15,000 loans Monday morning but cut that figure to 5,000 around midday after problems surfaced. The SBA also is capping at $60 billion the amount any one bank can fund.

The disruption of access drew the ire of trade groups such as the American Bankers Association (ABA). "Our member banks across the country are deeply frustrated at their inability to access @SBAGov​'s E-Tran system," ABA President Rob Nichols wrote Monday in a tweet. "We have raised these issues at the highest levels."

Many banks have been processing applications since the first round of funding ran out April 16 in anticipation of a new infusion of cash. That had banks big and small preparing for a short fugue of activity.

"Our expectation is that this money isn't going to be around for more than 48 hours," Citizens Bank of Edmond CEO Jill Castilla told the Post. "We're prepared to do whatever we have to." For Citizens, that included learning how to automate the process of submitting loan information to the SBA’s computer system.

JPMorgan Chase, which shepherded $14 billion in loans through the PPP — more than any other bank — is warning customers of a crush of demand. "We expect that funds could run out again quickly," the bank wrote in an email this weekend, according to the Times. "We wanted to give you this information, so that you can decide if you would like to try applying with another lender."

Wells Fargo wrote a similar note April 10, during the first round of funding. "Since there is a limited amount of funds approved by the SBA for the Paycheck Protection Program, we want you to be aware of your options," the San Francisco-based lender wrote. "You may want to apply elsewhere to increase your chances of receiving a loan before the funds run out."

For example, Kathleen Foley-Hughes, who runs Ada's Cafe in Palo Alto, California, missed out on the first round of PPP money. She contacted Wells Fargo when the program was announced but wasn't sent an application until it was too late, The Washington Post reported. She filled out the form April 16, and the bank notified her, hours later, that the fund had run dry. "For about an hour I was pretty hopeful, then my hopes were quickly dashed," Foley-Hughes said.

Bank of America, in a Friday memo cited by Business Insider, said it will continue processing loan applications after the current $320 billion is exhausted. "It is widely recognized that it will likely not be enough to meet the extreme need and demand, and it remains to be seen if more funding will be provided by Congress," Merrill Chief Operating Officer Kirstin Hill wrote. "We hope so, and in the meantime, remain focused on helping our clients process their applications as soon as possible."

Treasury Secretary Steven Mnuchin told "Fox News Sunday" that he would like to see the second-round money run out quickly because that would mean businesses in need were getting the funding.

"To me it's not a matter of how long it lasts. Actually, I think the sooner the money is disbursed the better," Mnuchin said, according to CNBC. "The first round impacted about 30 million workers. I think this round will be about the same. That’ll be close to 50% of the private workforce. So I actually hope we run out of money quickly so we can get that money into workers' pockets."

But trade groups are concerned the money will run out too quickly, leaving applicants again discouraged and waiting on a third round.

"My biggest concern is SBA not being able to handle the amount of loans trying to be processed and American small businesses becoming frustrated even more than they are today," Richard Hunt, president of the Consumer Bankers Association, told The Washington Post. Hunt last week said he expected the second round of funds to last 48 to 72 hours.

President Donald Trump on Friday signed off on the second round of PPP funding, which sets aside $60 billion in loans for processing by banks and credit unions with $50 billion or less in assets. The measure also includes set-asides for hospitals and virus testing.

More than $2 billion in funding from the first round was declined or returned and is being added back in for Round 2, SBA Administrator Jovita Carranza wrote in a tweet Monday.