Short thread: The challenges these government-sponsored emergency loan programs must meet are daunting. https://twitter.com/GeorgeSelgin/status/1245691356829417472

For administrative reasons, and perhaps also to lever taxpayers' contribution, it makes sense for gov't agencies (the SBA and the Fed here) to undertake to make the loans in partnership with commercial lenders.

But then many questions arise. Who is responsible for vetting and otherwise choosing among applicants? How are profits (if any) and losses to be shared between the commercial lenders and their gov't-backed partners?

Do the commercial lenders keep the loans on their books, or merely originate and sell them to the agencies? If the last, at what price? If the first, what happens to nonperforming loans? Will the SBA or Fed buy those, and again, for how much?

Everyone wants this emergency lending to begin yesterday. But to launch it before the answers to such questions have been adequately worked out--and in a way that makes the lending attractive to all concerned--is just risking failure, which is worse than mere delay.