As the largest federal stimulus bundle in the history of the United States, the Coronavirus Help, Relief and Economic Security Act, injects an organized $2.2 trillion into the U.S. economy, fintech start-ups are angling to get a seat at the table when it comes to distributing
the money.”In the last crisis, banks stepped far from the kinds of lending that our members do,” states Scott Stewart, the head of the Innovative Loaning Platform Association. “The bank process [for providing] is quite lengthy. Our members are financing loans utilizing algorithms at speed and scale.”
Under the CARES Act, approximately $450 billion in loans are set to be distributed through the Small Business Administration and other entities. While Congress is still exercising the information, fintech companies are thinking that they should– and will– have a function to play getting stimulus cash into the hands of entrepreneurs.
“The Treasury Department and the SBA have the authority and have been instructed in the legislation to allow us into the room,” says Stewart. “We will need to go through some sort of process to end up being qualified non-bank lenders.”
The argument for handing a few of the duty for dispersing the stimulus dollars to startups to pay out originates from the ability of these companies to authorize loans quicker than normal banks.
Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.