Small business lending

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.

Lenders are rallying around a bill from Sen. Rubio that would give them access to another $50 billion under the 7(a) program. It could face obstacles in the House, where a bill favors direct lending by the Small Business Administration.

Asset manager PGIM Inc. is looking to at least triple its investments in the growing direct lending market where it wants to compete with banks to fund mid-size companies outside of the buyout space.

Lawmakers have also criticized the agency's decision to create qualifying standards for farmers and other small businesses.