Fintechs Could Make Federally-Backed Loans in McConnell Aid Bill

March 19, 2020, 11:12 PM

Fintech lenders like Kabbage Inc. and Funding Circle would be able to temporarily offer government-backed small business loans under a stimulus plan offered by Senate Majority Leader Mitch McConnell (R-Ky.).

The proposed relief package circulated Thursday would allow the Treasury Department and the Small Business Administration to let fintechs and a broader range of banks offer “small business interruption loans” under Section 7(a) of the Small Business Act. The authority would last as long as the Covid-19-related national emergency stays in effect.

The government-backed loans have previously only been available through banks and other institutions approved for the SBA program. ...

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