UBS Pledges $2 Billion to Support Small Businesses Via U.S. Plan
(Bloomberg) -- UBS Group AG allocated $2 billion for loans through the Paycheck Protection Program to help U.S. small businesses navigate the economic shutdown caused by the coronavirus pandemic.
The Swiss lender is working with Newtek Business Services Corp., and will collaborate with others to provide financing or buy loans to help make funds available, Michael Blum, the firm’s head of banking in the Americas, said in a phone interview. UBS, one of the biggest wealth managers in the world, also works with many family-owned firms.
“We have a lot of connection to small business in the United States,” Blum said. “That’s the largest representation of our client base, the entrepreneur.”
UBS has already referred clients to Newtek who are seeking more than $1 billion of loans through the Small Business Administration’s program, according to a statement Wednesday. The U.S. has made $349 billion available through the PPP as part of its relief package.
The SBA loan program, a crucial aspect of the government’s response to the virus-fueled crisis, is still a work in progress. Treasury issued guidelines for participating banks only last on April 2, the night before they were slated to begin processing loans. That caused a number of banks, including some of the biggest including Wells Fargo & Co., to say they couldn’t immediately participate.
Read more: Wells Fargo gets break from Fed cap for small-business aid
Some banks that have said they lack liquidity to continue lending amid delays in the program, as it could be weeks before the loans may be purchased by the government.
UBS will redirect fees from the initiative to small-business relief efforts such as emergency grants and other funding.
“Speed is really important here, and speed at the loan level is the challenge for the industry,” Blum said. “The returns here aren’t necessarily driving our behavior. It’s a task at hand and a desire and willingness to try to help and get this program working.”
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