The US government will cap how much each bank can lend under the emergency loan program designed to keep workers on payrolls amid the coronavirus pandemic, according to a memo seen by Reuters hours ahead of the reopening of the lending program.
The Small Business Administration (SBA) will impose a maximum dollar amount for individual lenders at 10 percent of Paycheck Protection Program funding authority and pace the applications filed, according to the memo. The steps are “prudent and reasonable” due to the unprecedented demand for the loans, it said.
For more coronavirus news, visit our dedicated page.
US banks were girding over the weekend for another frantic race to grab $310 billion in fresh small-business aid due to be released by the government on Monday. The SBA was due to reopen the lending program at 10:30 a.m. ET on Monday, allowing lenders to resume processing piles of backlogged applications from businesses hurt by the coronavirus shutdown.
A spokesman for the SBA did not respond immediately to requests for comment.
Despite technical and paperwork challenges, the program’s first $349 billion of funds was exhausted in less than two weeks and lenders expect the second tranche of cash to be snapped up even faster by tens of thousands of applications queued up.
Coronavirus: US approves $168 bln of small business loans
That has left thousands of small business that have been forced to shut down in order to stem the disease outbreak, without badly needed funds to keep them afloat.
The SBA will take applications in one bulk submission with a minimum of 15,000 loans, the memo said.
US small business coronavirus relief fund runs out of moneyThe US Small Business Administration (SBA) said it has stopped accepting applications for a $349 billion federal relief program meant to help small ... Coronavirus
Coronavirus: US approves $168 bln of small business loansThe United States has approved 661,000 loans to small businesses totaling $168 billion under a program to address the fallout from the coronavirus ... Coronavirus
Coronavirus in US: Washington, D.C., orders all non-essential businesses to closeWashington D.C.'s municipal government ordered all non-essential businesses in the US capital to close for a month starting on Wednesday night due to ... World News