Small Business Administration admits serious loan application flaws

The Small Business Administration acknowledged to banks Monday in an email obtained by The Washington Times that there are frustrating flaws in its system for handling loan applications for distressed small businesses, even as the White House and lawmakers considered a second round of massive aid for companies.

“We know that your efforts have been frustrated with system issues, policy questions and slower than usual responses,” stated an email from SBA regional offices to lenders.

Among the problems: the SBA’s electronic system for processing loan applications, called E-Tran, wasn’t coordinated...