Small business lending

Rep. Roger Williams, chairman of the House Small Business Committee, says Small Business Administration is considering allowing borrowers to self-certify eligibility for loans, a step some believe could lead to more fraud. The agency declined to say whether that is one of the changes it's considering.

Texas National Bank in Mercedes, Texas, is testing how alternative data can improve the speed and accuracy with which it lends to its small-business customers.

Billions were lost to fraud during PPP. Now, prosecutors are increasing efforts to recoup taxpayer money, leaving lenders worried they could be put under the microscope next.

Despite growing concerns about fraud, bankers and credit union lenders say PPP provided a crucial source of capital, backstopping the economy as it faced an unprecedented challenge from the pandemic.

The regulation — mandated more than a decade ago to combat discrimination — will make lenders provide data on approvals and denials of small-business loan applications, the cost of credit and demographics of borrowers.

Lenders had started tightening as early as the fourth quarter in anticipation of a possible recession. Now, the banking crisis is driving community and regional banks in particular to hit the brakes harder, stoking renewed recessions fears.

About 40% of smaller firms applied for private-sector financing last year, which was up from 25% in 2021, according to a survey by the Federal Reserve banks. The results suggest a return to pre-pandemic credit needs, but borrowers now have different plans for the use of financing.

The small businesses said in a lawsuit that the bank used "misleading marketing and business practices" to rake in processing fees from oversized Paycheck Protection Program loans. A bank spokesperson placed responsibility on PPP borrowers for the representations they made in loan applications.

The lending software and shared services provider was created by bankers for bankers.

A new Risk Management Association survey found that 84% of small lenders cite credit quality as a leading worry for 2023 because of the likelihood of a recession.

Banks and other lenders revived special-purpose credit programs after racial-equity protests in 2020 prompted them to reexamine their services for historically underserved groups. Now they're taking those initiatives nationwide.

The Paycheck Protection Program proved successful in providing small-business owners with funds to keep workers employed — but it was also a magnet for criminals. Here is a rundown of fraud probes, prosecutions and potential long-term consequences for commercial lending.

In a new survey, executives at banks and credit unions registered the highest level of anxiety about a forthcoming data-collection rule in small-business lending.

The Small Business Administration must be prepared to effectively oversee any new lenders it allows in its flagship 7(a) loan guarantee program to guard against fraud and other risks, Democrats and Republicans on the Senate Small Business Committee warned.

The institution's Impressia Bank will be dedicated to the professional and financial advancement of women business owners and entrepreneurs.

Citing a congressional report, SBA says it will investigate PPP operations at several fintechs, community banks and other participants. The review raises questions about plans to open up the agency's flagship loan-guarantee program to more nonbanks.

New York and California are among the states that have laws requiring lenders to make certain disclosures to small-business borrowers. The Consumer Financial Protection Bureau has reached a preliminary determination that a federal statute does not preempt those state laws.

With the final piece of its regulatory puzzle in place, Newtek, a business development company and the nation's No. 3 SBA 7(a) lender, plans to complete its acquisition of National Bank of New York City in January.

The Canadian banking giant reached a five-year deal with community groups that includes $40 billion in investments to underserved groups. BMO aims to close its acquisition of San Francisco-based Bank of the West before the end of the year.