Paycheck Protection Program

The Small Business Administration said lenders approved $71 billion in loans from the Paycheck Protection Program in less than five days.

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.

Soaring demand for loans from firms hard hit by the coronavirus pandemic has led to predictions that the program could soon run out of funds.

Lenders must balance the financial risk of extending credit without explicit backing from the Small Business Administration against the reputational risk of delaying aid for needy borrowers.

The central bank is creating a facility to provide financing to banks participating in the Small Business Administration’s Paycheck Protection Program.

While the federal government is touting the early success of the Paycheck Protection Program, community banks are complaining about headaches and glitches.

Banks, under pressure to act hastily, began taking applications for government aid to small businesses hit hard by the coronavirus outbreak. But narrow eligibility rules at some banks angered business owners and lawmakers.

The pandemic may force the Small Business Administration to rely more on fintechs and digital channels to hasten loan approvals, a shift that could stick.