Small business lending

Solopreneurs are the new engine of business growth in the U.S., and banks and financial services regulators need to recognize their importance.

Isabella Guzman, the administrator of the Small Business Administration, skipped a congressional hearing called to discuss the wide disparity in the level of fraud calculated by her staff and a parallel examination conducted by SBA's Office of the Inspector General.

A new inspector general report suggests that grifts were more pervasive than has previously been reported. The Small Business Administration, which drew blame in the watchdog report, took issue with the findings.

Lake Trust Credit Union in Brighton, Michigan, works with a development agency in Lansing to provide entrepreneurs with the financial and educational support they need to go it alone.

The fund, which aims to create a self-sustaining, nationwide secondary market for CDFI microloans, has made progress, but it remains far short of its goal, its managing director said.

The Minneapolis bank has launched a special-purpose credit program that aims to help businesses owned by women, minorities and veterans. Borrowers with comparatively low credit scores and cash flows will qualify for lending products of up to $2.5 million.

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.