The SBA's long-standing Economic Injury Disaster Loan program has been so overwhelmed with applications that the agency has capped loan sizes; ECB finding few takers for a program in which it pays banks to make business loans.
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.
Regulators need to give more detailed guidance on the coronavirus relief program for small businesses so lenders don’t get trapped in underwriting mistakes down the road.
Payday Loan LLC, which engages in lending and check cashing in 22 stores in California, sued the SBA on April 25 after its request for a $644,000 loan from the Paycheck Protection Program was denied.
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.
More companies will be eligible to apply for the four-year loans, including those with high debt loads; four-year loans will be offered to European banks with rates as low as minus 1% as the eurozone economy tanks.
The Justice Department has begun a preliminary inquiry into how taxpayer money was lent out under the Paycheck Protection Program and has already found possible fraud among businesses seeking relief, a top official said.
A former economist says high-ranking officials engaged in “legally risky” behavior to downplay consumer harm; online payments and contactless transactions jumped in the first quarter, and some think the new habits will stick.
