Small business lending

The Federal Reserve received a bipartisan critique Wednesday from members of a congressional oversight panel who said the central bank has been slow to launch a key emergency lending program for midsize companies.

The agencies produced an application process that includes favorable interpretation of qualifying expenses.

The agency is being methodical in its rollout of the Main Street Lending Program in hopes of avoiding missteps that followed the launch of other coronavirus relief efforts. But observers say delaying aid brings its own risks.

Banks could end up holding many low-rate Paycheck Protection Program loans on their books for two years, and dealing with irate borrowers who failed to meet federal requirements for forgiveness.

Up to 12% of loans under the $660 billion small-business rescue program could be tied to misleading or completely phony applications, fueling concerns about lenders' potential liability.

Small businesses that received loans from the Paycheck Protection Program pandemic still don’t know how much they may have to repay after the government missed a deadline to give specific guidance.

In round two of the Paycheck Protection Program, the bank has sent some 256,000 loan applications to the Small Business Administration for processing.

The Small Business Administration's systems froze up shortly after the latest Paycheck Protection Program was launched Monday morning.

The central bank and other agencies have come under pressure to be transparent about their use of funds authorized by the recent pandemic rescue law.

The program, created in response to the 2008 financial crisis, generated $19 billion in small-business loans. It could be used as a viable path out of the coronavirus pandemic.

The Small Business Administration stopped approving loans when the Paycheck Protection Program hit its cap.

Legislation announced Wednesday would allow credit unions to make coronavirus relief loans to businesses without fear of bumping up against the member business lending cap.

The Fed's actions are designed to ensure the flow of credit to midsize businesses and state and local governments hit hard by the economic impact of the coronavirus pandemic.

The Small Business Administration said lenders approved $71 billion in loans from the Paycheck Protection Program in less than five days.

The Small Business Administration’s loan processing platform went down Monday for as long as four hours, temporarily halting the ability of lenders to process loans for small business owners seeking relief from the impact of the coronavirus.

Lenders must balance the financial risk of extending credit without explicit backing from the Small Business Administration against the reputational risk of delaying aid for needy borrowers.

The central bank is creating a facility to provide financing to banks participating in the Small Business Administration’s Paycheck Protection Program.

Sen. Marco Rubio, R-Fla., said that $349 billion will likely not be enough meet loan demand from small businesses seeking a lifeline to help them weather the economic downturn brought on by the coronavirus outbreak.

The 2008 package proved some banks were too big to fail. But the rushed $2.2 billion stimulus shows now any company can be bailed out.

The Federal Reserve committed Monday to conducting more asset purchases of Treasury securities and mortgage-backed securities and announced $300 billion in new financing for credit facilities.