13 Apr Resource Roundup – FinTech Joins PPP
It’s fair to say that the Paycheck Protection Program’s launch hasn’t been perfectly smooth. The adjustment period as lenders familiarize themselves with unprecedented terms and the enormous volume of demand created a significant bottleneck. As some experts have warned, banks are prioritizing applicants with whom they have existing relationships. The systems to process all of this didn’t immediately exist.
After weeks of lobbying, FinTech (technology that supports banking and financial services) companies, including PayPal, Intuit, and Square, have been authorized as PPP lenders. Many have also joined the fray as facilitators of the loan application process.
This gives businesses some new options, which might be helpful if your bank is balking. In a letter to lawmakers last month, an alliance of FinTech leaders called Financial Innovation Now outlined the capabilities of their industry. Specifically, digital payroll records, analysis, and delivery systems help remove friction, they say.
“Collectively, FIN member companies alone have a direct deposit and underwriting capability with over 20 million small businesses. FIN estimates that our companies could rapidly disburse approximately $100 billion in capital to vulnerable small businesses, in many cases within weeks. Through payment processing data and other technologies, these alternative online lenders have direct visibility into real-time hardship of a small businesses and they have the credit models and the digital infrastructure to move money rapidly.”
“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,” says Nat Hoops Executive Director of the Marketplace Lending Association.
“Our goal is to get relief money into the hands of as many eligible applicants as possible, as fast as possible. Validation of payroll information is necessary to complete the PPP application. For QuickBooks Payroll customers, the customers’ data is already in the QuickBooks system. As a result, we are well positioned to help expedite the loan application process for this group. One in 12 American workers are paid through our payroll systems, which makes this an impactful place to start,” says Luke Voiles, VP and Business Leader of QuickBooks Capital.
This Forbes article provides a list of FinTech companies helping with loans. If you do explore alternative, non-bank lending options, exercise caution to avoid scams. This Inc. article outlines some steps to take to protect yourself in a fraught lending market.
Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.