Community banks have approved a plurality of emergency small business loans, with several taking advantage of the Federal Reserve's liquidity facility for funding.

On May 18, the Small Business Administration released the latest data for the Paycheck Protection Program, which provides forgivable loans to keep small business employees on payroll during the COVID-19 pandemic. The data shows $513.27 billion of PPP loans approved through May 16.

The report also broke down approval volume by lender size, showing community banks have accounted for a significantly greater portion of PPP loans than their share of banking industry assets. Community banks, defined as those with less than $10 billion, have processed 43% of PPP loans while accounting for less than 20% of the industry's assets, according to S&P Global Market Intelligence data. Regional banks with $10 billion to $50 billion in assets accounted for 19% of PPP loans, while large banks with more than $50 billion in assets handled 37% of the loans.

Several community banks have taken advantage of the Fed's Paycheck Protection Program Liquidity Facility, or PPPLF. Data released on May 15 showed how much in advances banks have received from the Fed's facility through May 6. Cross River Bank, a $2.53 billion bank in New Jersey, had received the most advances, coming in at $2.01 billion. Cross River Bank has established a significant financial technology presence with its partnerships such as Best Egg, a digital lender. Other banks with significant fintech lending partnerships were also high on the list, such as WebBank with $1.28 billion of advances and Celtic Bank with $920 million of advances. Megabank, Citigroup Inc.'s banking unit, was second on the list with $1.34 billion in total advances, but the bank has repaid most of it with roughly $330 million outstanding.

The PPP has been immensely popular with small business struggling to survive shelter-in-place orders due to the COVID-19 pandemic, but lenders and borrowers alike have struggled to navigate the program as guidance has been slow to come or not comprehensive enough. On May 18, restaurant lobbyists pressed for easing on some regulations in a White House meeting. President Donald Trump signaled openness to the suggestion to extend the forgiveness period to 24 weeks, saying "we'll look at that very strongly," Politico reported. The SBA recently issued guidance on loan forgiveness, but stakeholders have said the guidance does not go far enough.