April 9, 2020 / 4:59 PM / 2 months ago

Fed studying if new facility for small business loans might be opened to non-bank lenders

WASHINGTON (Reuters) - The Federal Reserve may expand a program to back Small Business Administration loans to include non-bank lenders as a way to help speed distribution of $350 billion in loans considered critical to helping the smallest firms through the coronavirus crisis.

The Fed is offering to accept the SBA deals as collateral for loans to banks, a way to let banks do even more SBA transactions. But non-bank and particularly financial technology companies are interested in participating. The Fed said it wants to get the new program running as soon as possible, and is exploring how to let non-bank lenders be involved.

Reporting by Howard Schneider; Editing by Chizu Nomiyama

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