Lenders are rallying around a bill from Sen. Rubio that would give them access to another $50 billion under the 7(a) program. It could face obstacles in the House, where a bill favors direct lending by the Small Business Administration.
Banks typically don't offer loans to cash-strapped consumers, and are poorly positioned to start doing so on an emergency basis — unless the government steps in to help.
No-interest loans and overdraft forgiveness are among the lifelines banks are offering to consumers and small businesses whose livelihoods are being upended by the economic fallout.
Prices for major term loans issued by operators such as Marriott International, Hilton Worldwide and Caesars Entertainment have fallen in recent weeks as investors grow worried about the impact of the COVID-19 outbreak on global tourist and business travel.
Banks may be protected from a direct hit, but they have invested in vehicles that include such loans, potentially exposing them to defaults.
There may only be so much institutions can do if the outbreak affects borrowers' ability to repay credit.
With health organizations warning of a global outbreak, banks are starting to assess the risks to their bottom lines.
The San Francisco bank has revised its guidance downward, while also cautioning that an outbreak of the coronavirus could take an even bigger bite out of profits in 2020.