We learned ten days ago that fintech lenders would be authorized to make loans for the Paycheck Protection Program (PPP). But when the program launched last Friday there was no way for non-SBA authorized lenders to be included. It has been a frustrating few days as fintech has mainly been left out of the flurry of PPP activity.
That changed last night. The SBA sent out a notice at 9:30pm ET that fintech lenders can now apply through this application form. They also updated the FAQ document with clarification on promissory notes and the timing of the eight-week payroll period for forgiveness.
While there has been more than $100 billion in applications already taken in by banks, the PPP will remain an important program for the next several weeks. Many small business owners have been frustrated because they have not been able to submit their application through their bank. Now, with an expected flurry of fintech lenders jumping on board there will be many more options.
Funding Circle is one lender that has been trying to get approved by the SBA for some time (over a year). They have had their PPP pre-application form up since last week and have been waiting to become part of the program. They jumped on this right away last night and have already submitted their application. Ryan Metcalf, Head of Regulatory Affairs and Social Impact, told me, “We are ready to go. We have thousands of small business applications ready to submit to SBA as soon as we are approved”.
Kabbage is also applying. They had already set up a bank partnership, reported by American Banker earlier this week, to start processing applications and they indicated to me that they will also be applying so they can have a dual track to help push through more volume. Sam Taussig, Head of Policy, said, “This is what FinTech was made for — we have the technology and financial infrastructure in place to serve small business owners in their time of need.”
BlueVine will also be applying. CEO Eyal Lifshitz told me, “Our priority is to get funds in the hands of small business that are struggling as fast as possible. We believe that as a technology enabled lender with expertise in online onboarding, KYC & KYB and document processing we are strongly positioned to help.”
OnDeck and several other fintech lenders also indicated that they will be applying. Everyone echoed how important it was to help small businesses during this difficult time and that fintech was poised to be able to move quickly and create a streamlined application system.
Hat tip to Nat Hoopes and the Marketplace Lending Association, who have stayed on top of this fast-moving situation and have been a valuable resource for the entire industry. He was the first to alert me to the application being live last night. Nat sent the following statement to me, “The tech integration issues for the banks trying to participate for the first time were considerable (unique application forms not matching SBA required fields etc) but my hope is that the lessons learned in the last week and some upgrades and standardization will help speed the second iteration. I know my small biz members have billions in loan volume all teed up if it all comes together.”
While it would have been better if this application was in place a week ago so fintechs could have hit the ground running, it is better late than never. There are still millions of small businesses who are struggling to apply to the PPP so adding a group of agile, digital-centric lenders will certainly help this process.