There are substantial inequalities baked directly into the current banking infrastructure, which have been magnified due to the emergence of the coronavirus. In 2017, 8.4 million American households were underbanked, which poses a tremendous logistical barrier for the coronavirus relief efforts. Not having access to a bank account means that some Americans could be waiting as long as 20 weeks for checks to be mailed out. Considering how quickly life has already changed, this (singular) check is a lifeline for far too many people.
Under the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, industries that were hit the hardest, like travel, restaurants and healthcare, now have access to much needed funding to try and keep as many employees on the payroll as possible. While this is a noble sentiment, the stimulus bailout seems to have missed the mark with regards to speed and simplicity for the small business community. Before the coronavirus emerged, small businesses were already struggling to gain the basic banking support they needed and it has only intensified. With the mass exodus of community banks from neighbourhoods, many entrepreneurs have been forced to cobble together solutions, many of which are too expensive and outdated.
The path forward must include traditional banks cooperating with and investing in BaaS solutions. Since the CARES Act, broker portals like P3 Loans have begun emerging to attempt to bridge that gap and get money into small businesses. Direct assistance is necessary to salvage the businesses and incomes of everyday Americans.
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