Square, PayPal and Intuit QuickBooks approved to hand out SBA loans
PayPal, Intuit QuickBooks and Square are among some of the first non-bank fintech lenders to be approved by the US Small Business Association’s (SBA) coronavirus lending programme, CNBC reports.
After campaigning to be involved in the US government’s Paycheck Protection Programme (PPP), these firms have finally been given the green light to distribute some of the $350 billion allocated to small businesses.
As well as acting as a direct lender, Intuit QuickBooks says it will also process payroll information to help more small businesses to get approved.
“This is a race to save jobs in the present and for the future,” says PayPal CEO Dan Schulman.
“We are eager to deploy our capital and expertise to do our part in helping small businesses survive this challenging period.”
Head of Square Capital Jackie Reses echoes Schulman’s sentiment. “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.”
For weeks, these and more fintechs have been vying for inclusion in the US government’s stimulus plans. Financial Innovation Now, an industry group which represents the likes of Square, Intuit, PayPal and Stripe, sent a letter to US Congress on 20 March asking for its members to be included in the country’s emergency government funding.
The letter said small businesses are “not well served” by traditional financial institutions, and that existing federal small business loan programmes would not deliver funds “soon enough”.
“Any federal small business loan programme must leverage digital advances in the marketplace to ensure that stimulus can reach those business most in need,” the letter concluded.
As the government looks to solve its small business relief channels with fintech, it’s still open to speculation whether it will also utilise fintech to tap America’s unbanked population.
A bill introduced last month by the Senate Banking Committee will allow unbanked people to set up ‘FedAccounts’ – or ‘digital dollar wallets’ – where they can receive COVID-19-related relief payments. These accounts will then continue to operate post-coronavirus, with the potential of a digital dollar still firmly on the drawing board.
In the meantime, a couple of digital banks have taken it upon themselves to try and get stimulus paychecks to their customers early.
Chime has tried to do this by fronting the money itself. Using its overdraft feature SpotMe, it gave 1,000 of its eight million users a $1,200 paycheck advance.
Now it is enabling 100,000 customers to take out $200 beyond their account balances, again through its SpotMe feature.
Fellow neobank Current received stimulus checks for some 10,000 of its users on Friday and has made the funds available to users instantly.