Could Fintech Companies Provide a Lifeline to SBOs Seeking PPP Loans?

How small businesses can access PPP loans through fintech providers

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Banks and credit unions began accepting applications for new Small Business Administration loans under the Payroll Protection Program on April 3, but the many small business owners have found the program’s rollout frustrating and confusing.

Guidance from banks and the SBA itself has been vague at times, and some banks have chosen not to lend under this program or have limited eligibility to customers with an existing business banking relationship.

Meanwhile, financial technology companies that serve small businesses including PayPal, Square, and Intuit have been clamoring for the chance to participate in the lending program, which is part of Congress’ $2 trillion coronavirus stimulus package.

A group called Financial Innovation (which includes those 3 companies and others) wrote to legislators last month, saying “any federal small business loan program must leverage digital advances in the marketplace to ensure that stimulus can reach those business most in need.”

Fintech companies join Paycheck Protection Program


PayPal, Square, and Intuit have now received approval from the U.S. Treasury and the SBA, and the hope is that these companies will be able to provide a faster and more streamlined path to the stimulus money small businesses need to continue making payroll. These companies likely already have data on revenue, payroll, and expenses for its business customers.

While this is the first time that non-bank institutions can lend under the SBA, PayPal has offered $15 billion in loans and cash advances to business owners since 2013, according to a press release. PayPal announced the approval on April 10.

“We have more than 10 million U.S. small businesses that are able to apply assuming they meet the SBA’s eligibility requirements,” says Joseph Gallo of PayPal.

“We have more than 10 million U.S. small businesses that are able to apply assuming they meet the SBA’s eligibility requirements,” says Joseph Gallo, senior communications manager, in an emailed statement. “We have already approved the first loans and provided funding to those businesses.”

Gallo clarified that applicants must be a PayPal business customer but they don’t need to have a prior lending relationship with PayPal.


Square, which introduced the Square credit card reader in 2009, announced its approval on Monday but its website says it’s not ready to accept applications yet. The company does have an application guide online.

“Square Capital has received U.S. Treasury and SBA approval to be a PPP lender, and we will start rolling out our PPP loan applications this week,” says Square Capital head Jackie Reses in an emailed statement.

“We continue to work with our partner Celtic Bank as they have existing expertise as a leading SBA lender. We will notify sellers when their application is available via Square Dashboard, starting with employers whose application data we can verify automatically. We expect to expand access to more small businesses soon. We know sellers need financial support now more than ever, and we’re committed to making funding accessible to as many small businesses as possible.”

Over 2 million businesses worldwide use Square Point of Sale, according to its website.


As of publication, Intuit, whose products include TurboTax and QuickBooks, had not responded to a request for comment.

Like PayPal, Intuit also announced its approval last Friday. According to a company press release, the company’s subsidiary QuickBooks Capital will be able to automate and expedite the application and funding process.

“We are focused on getting help to customers as quickly as possible as they navigate this unprecedented and challenging time,” says Alex Chriss, EVP and GM of QuickBooks in that press release. “As the financial source of truth for millions of small businesses, we have a unique opportunity to help remove friction from the system.”

One in 12 American employees is paid through QuickBooks Payroll.

Non-bank lenders may lead the way

Florida Senator Marco Rubio predicted in a tweet that once these non-bank lenders on board, “they will substantially increase the ease and availability of #PPPloans for #smallbusiness.” Rubio also tweeted on April 14 that as of close of business on Monday, over a million business businesses had been approved for $242 billion in PPP loans (over two thirds of the $349 billion Congress allotted for SBA loans in the CARES Act).

Other fintech firms such as Lendio, Kabbage, and Fundera will serve as intermediaries connecting applicants to lenders.

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