Small business loan program expands with PayPal, Square, Intuit

Written on May 01, 2020

A number of fintech companies can now participate in the federal government's Paycheck Protection Program (PPP), good news for scores of small business owners who might not have existing relationships with larger banks that have prioritized that in accepting applications so far.

Square, PayPal and Intuit are among a group of non-traditional lenders the Small Business Administration has now approved to participate in this $350 billion program which provides government-backed, low interest, forgivable loans to rescue small businesses crushed by the novel coronavirus' economic impact.

This news comes as the PPP is nearly out of cash and is still plagued by problems, including some that still exist with SBA's online loan application portal used by all lenders known as E-Tran.

White House economic adviser Larry Kudlow, over the weekend, said the program was estimated to run dry by Friday, and Congress is still squabbling over funding.

It's unclear what the influx of lenders and demand on an already-overburdened system might mean; still, demand for the program is high, according to these non-traditional lenders which lobbied Congress to be included in the PPP, and many intend to help the little guy, already counted among their clientele.

PayPal, which serves more than 10 million small businesses in the U.S., has started accepting applications, and according to a company spokesman, has already funded some loans.

The company is prioritizing existing customers, though not ruling out opening the door to others.

PayPal said the company’s participation in the program would mean that much-needed aid would flow to underserved communities that he called "banking deserts" — counties where banks have closed since the 2008 financial collapse.

Square — which has millions of sellers globally, with most in the U.S. — plans to start taking applications this week, saying the company sees this as a huge opportunity to help sole proprietors and independent small business owners.

Though the company will eventually be open to all small businesses, Square has planned a "rolled out application launch," prioritizing existing customers who can easily auto-populate forms, like payroll for those who use Square Payroll.

Both Square and PayPal partner with banks, Celtic Bank and WebBank, respectively.

Intuit said its Quick Books Capital program would be able to "simplify, automate and expedite the PPP application and funding process."

Like Square and PayPal, Intuit said it would prioritize existing customers, as well.

"PPP federal relief processing will initially be available for a subset of QuickBooks Online Payroll customers who will be able to begin applying as early as next week," the company announced on April 10.

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