Many banks were hitting their limits for lending to small businesses devastated by the coronavirus outbreak. They say the Fed's decisions to help fund additional loans and relax capital requirements will resolve many of their problems.
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 bank will be allowed to exceed the limit to enable it to make more small business loans; the CEOs of HSBC and StanChart are also donating part of their pay to coronavirus victim charities.
The agency overhauled its system for the Paycheck Protection Program on Wednesday. Lenders hope it addresses the access issues and a crash that bedeviled the effort’s first week.
The Federal Reserve is temporarily altering the growth restriction it placed on Wells Fargo in 2018 so that the bank can make additional loans to small and midsize business that need funding to weather the coronavirus pandemic.
Lawmakers want to expand the two-day old small business loan program by another $250 billion; Calabria says nonbanks are exaggerating their financial woes as forbearance claims rise.
The online lender, which is looking to become a direct lender in the Paycheck Protection Program, has accepted 37,000 applications while working with an unnamed bank to fund businesses harmed by the coronavirus pandemic.
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.
