Small business lending

More lenders and governments should partner with community development financial institutions to ensure aid reaches minority-owned businesses that are the backbone of many neighborhoods slammed by the coronavirus.

Lenders want Congress to bring back incentives used during the last recession, such as bigger subsidies and reduced fees, to jump-start participation in the Small Business Administration's flagship 7(a) program.

Community development financial institutions, which tend to be less digitally savvy than traditional banks and credit unions, are developing online-lending platforms and automating backroom processes with investments and technical assistance from big banks, high-tech firms and other sources.

More lenders and governments should partner with community development financial institutions to ensure aid reaches minority-owned businesses that are the backbone of many neighborhoods slammed by the coronavirus.

On Jun. 30, 2020. Dollars in thousands.

Asked about the political uncertainty surrounding the undecided presidential race, Federal Reserve Chair Jerome Powell said the central bank isn’t wavering from its duty “to support the economy during this difficult time.”

Wells Fargo, JPMorgan Chase and others cut back on 7(a) lending to focus on originating Paycheck Protection Program loans. Smaller banks such as Live Oak and Byline gained market share by targeting niche industries and originating bigger loans.

Credit is tightening to 2008 levels at a time when small businesses need help the most, former SBA chief Karen Gordon Mills says.

Underwhelming participation in the middle-market loan program has forced the central bank to reduce the minimum borrowing amount for the third time, to $100,000.

A Small Business Administration program meant to help struggling entrepreneurs amid the coronavirus pandemic may have sent billions of dollars to scammers or ineligible applicants, the agency’s inspector general said.