The U.S. 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 will impose a maximum dollar amount for individual lenders at 10% 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.
U.S. 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.
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.Reporting by Michelle Price; Writing by Chris Prentice; Editing by Peter Cooney and Lisa Shumaker
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