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JPM 0.78% Chase & Co. and Bank of America Corp. BAC -3.2% are in line to split between $1.5 billion and $2.6 billion in fees for being the conduits of the governments aid program for small businesses stricken by the coronavirus shutdown, according to an analysis of newly released data. The nations two biggest banks by assets delivered more emergency loans than any other lenders that participated in the paycheck protection program, and the two are set to earn the biggest fees as well, according to a review of disclosures made Monday by the Trump administration. In total, the more than 4,000 lending institutions in the analysis are in line to split $14.3 billion to $24.6 billion in processing fees for PPP loans, according to Edwin Hu, at New York University School of Laws Institute for Corporate Governance & Finance, and Colleen Honigsberg of Stanford Law School. The government prioritized speed when it designed the $670 billion program to support hard-hit businesses, betting that banks would be able to get huge sums out faster than a small government agency. But that decision also required giving banks a financial incentive to participate, boosting the programs costs.

Running PPP through the banks also resulted in the government inadvertintly picking winners and losers in the programs first weeks. Banks that already made loans through the Small Business Administration were the first ones authorized to submit applications to the program; most gave priority to existing customers. As more lenders were approved to participate in PPP, small businesses found securing aid easier. Banks have said they dont expect sizable profits from the programgiven the cost of building out loan infrastructure and having to dedicate thousands of workersand the biggest banks have said they would donate any profits they do make.

The PPP has delivered more than $520 billion in loans so far meant to soften the economic blow from the virus and related shutdowns. The loans can be forgiven if businesses spend the money on certain expenses like rent or payroll, though businesses have said the process is confusing. It is common for banks to be compensated for facilitating loans made under government programs. What sets PPP apart is its size: The high end of the range of PPP fees lenders can earn exceeds the total size of the SBAs flagship lending program in the 12 months ended Sept. 30. Number of banks by midpoint of estimatedrange of fees they could get for PaycheckProtection Program loansSource: Source: Edwin Hu, NYU Laws Institute forCorporate Governance & Finance;ColleenHonigsberg, Stanford Law School

In addition to the programs fees, banks are also set to earn 1% in interest on PPP loans they hold that arent forgiven, not much more than their cost of funds. The SBA guarantees the loans, protecting banks against defaults. JPMorgan, Bank of America and Well Fargo & Co. are among the banks that have said they would donate whatever profits they make on PPP. We will use the net proceeds of feesto support small businesses and the communities and nonprofits we serve, a Bank of America spokesman said. The fees banks earn depend on the size of the loans they make: 5% for loans less than $350,000; 3% for loans between $350,000 and $2 million; and 1% for loans north of $2 million. If the SBA later determines a borrower was ineligible for a PPP loan, it can claw back the processing fee from the lender. More than 30 banks, mostly smaller ones, could earn as much from the PPP loans as they reported in net revenue for all of 2019, according to a separate analysis from S&P Global Market Intelligence. The government released exact loan sizes only for loans of less than $150,000. The remaining loans were placed within several buckets. Ms. Honigsberg and Mr. Hu tallied the exact fees for those loans under $150,000 and the potential range for every other loan. PMorgan customers received $29 billion in PPP loans, and the bank stands to get between roughly $800 million and $1.38 billion in fees, according to the analysis.