The demand for Small Business Administration (SBA) loans has led the Federal Reserve to consider allowing non-bank lenders to speed distribution of $350 billion in loans through the coronavirus crisis, Reuters reported.
The Fed’s move comes three days after Bank of America said requests for the cash reached 10 percent by Monday (April 6). Jessica Oppenheim, a BoA spokeswoman, told PYMNTS that the number of applications had risen to 178,500 at a value of $32.9 billion.
Last week, the $349 billion PPP was launched to help small businesses keep their workers on the payroll in the wake of the worldwide COVID-19. The daily demand for loans has been more than the SBA typically processes in a year.
In an effort to deliver more relief to the nation’s struggling small businesses and boost the economy amid the global coronavirus pandemic, the Federal Reserve has taken actions to facilitate $2.3 trillion in loans.
“Our country’s highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus,” said Federal Reserve Board Chair Jerome H. Powell in a statement.
The Fed’s latest round of funding is expected to assist the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) by supplying cash to lenders through financing backed by PPP loans to small businesses.
In other news, it was reported that FinTechs have been stepping in to help financial institutions handle the deluge of loan applications by enabling digital applications, facilitating data collection or assisting with the underwriting process.