Fintech companies have finally been allowed to take part in the US government's emergency lending program following weeks of lobbying.
PayPal and Intuit QuickBooks recently announced that they have been approved to take part in the Paycheck Protection Program by the Small Business Administration. The program will provide emergency government loans to small businesses in order to help them weather the economic slowdown that has occurred as a result of the coronavirus outbreak.
In a press release announcing the news, PayPal CEO Dan Schulman explained that the company will do its part to distribute funds to small businesses in an effort to save jobs, saying:
- Technical hitches and confusion at SBA delays small business loans
- Global fintech investment plummets worldwide
- Fintech innovation can lead SMEs out of the imminent financial crisis
"Small businesses have been hit especially hard by the coronavirus crisis. There is an urgent need to help every qualified business access the funding needed to ensure that as many workers as possible keep their benefits and paychecks. This is a race to save jobs in the present and for the future. We are eager to deploy our capital and expertise to do our part in helping small businesses survive this challenging period. We are thankful to Congressional leaders for ensuring the CARES Act allowed companies like PayPal to help distribute funds quickly to those businesses that are most impacted."
In addition to serving as a direct lender for small businesses, Intuit QuickBooks has said that it will also help companies process their payroll information which is required to get approved for the US government's emergency lending program.
Financial Innovation Now
As part of the $2tn coronavirus stimulus bill, the US government has made $350bn in loans to small businesses available. The US government has asked banks for help distributing these funds but tech-focused lenders have also been pushing to be included in their distribution.
Back in March, the industry group Financial Innovation Now, that represents Square, PayPal, Intuit, Stripe and other fintech companies, sent a letter to Congress in which it asked for its members to be included in any emergency funding, saying:
“Small businesses are not well served by traditional financial institutions, nor will existing federal small business loan programs deliver funds soon enough. Any federal small business loan program must leverage digital advances in the marketplace to ensure that stimulus can reach those business most in need.”
With both banks and fintech companies now distributing funds, small businesses will likely be able to get their part of the coronavirus stimulus bill much faster than they previously would have been able to.
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After working with the TechRadar Pro team for the last several years, Anthony is now the security and networking editor at Tom’s Guide where he covers everything from data breaches and ransomware gangs to the best way to cover your whole home or business with Wi-Fi. When not writing, you can find him tinkering with PCs and game consoles, managing cables and upgrading his smart home.