This morning the Federal Reserve made further unprecedented moves to bolster the economy and provide security to banks and credit unions participating in the Paycheck Protection Program (PPP). Financial institutions need to act right now, for the good of the communities they support and for their own stability and bottom lines.
Key takeaways from the Fed's news release:
The actions the Federal Reserve is taking today to support employers of all sizes and communities across the country will:
- Bolster the effectiveness of the Small Business Administration's Paycheck Protection Program (PPP) by supplying liquidity to participating financial institutions through term financing backed by PPP loans to small businesses. The PPP Liquidity Facility (PPPLF) will extend credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value.
- Ensure credit flows to small and mid-sized businesses with the purchase of up to $600 billion in loans through the Main Street Lending Program.
- The Main Street Lending Program will enhance support for small and mid-sized businesses by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses. Firms that have taken advantage of the PPP may also take out Main Street loans.
While this is obviously good news for the economy and financial institutions, it adds new layers of confusion and complexity for banks and credit unions scrambling to keep up with the deluge. Institutions' loan origination systems and account-opening systems aren't ready for this, but there are both short-term and long-term financial technology solutions.
MeridianLink has solutions to help any bank or credit union, immediately and for the longer haul as this plays out. Using its SBA PPP Fast Track digital solution, MeridianLink is uniquely able to equip almost any bank or credit union to quickly accept these loan applications from online and mobile sources, regardless if your financial institution is a current client or not.
MeridianLink's SBA PPP Fast Track solution provides, in typically 5-7 days based on demand:
- Online and mobile-ready SBA PPP Applications
- eSignatures, for SBA form 2483 and other required documents
- Automated checklist to generate and send primary owners a list of required documents
- Secure uploads for any required documents
MeridianLink is offering a complimentary webinar on Friday, April 10 at 2:00pm ET time to demonstrate how its SBA PPA Fast Track digital solution can immediately help any financial institution to accept SBA PPP loans digitally and make the application process for customers as easy as possible. Register Now!
A new normal is here and no bank or credit union can afford to be complacent about being fully digital. Flexible automated mobile and online loan origination systems and account opening are simply not optional anymore. MeridianLink's industry-leading suite of digital origination solutions can fill the technology gaps for any financial institution, for personal lending, business lending, mortgage, account opening, collections, and analytical insights.