By now you have likely heard of the Paycheck Protection Program (PPP), an aid program administered by the U.S. Small Business Administration (SBA) to provide economic relief to businesses with 500 or fewer employees. It is one of the most popular components of the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on March 27, 2020.
Originally, the CARES Act allocated $349 billion to the SBA to distribute forgivable loans to small businesses and not-for-profits impacted by the coronavirus outbreak. However, the $349 billion was exhausted in less than two weeks after the application was first made available. However, President Donald Trump recently signed a bill to allocate another $320 billion to the Paycheck Protection Program.
There have been numerous reports about the flood of applications that poured into banks and other financial institutions when the PPP application opened. While a number of applications have been approved, hence the quick distribution of the original $349 billion, the second round of funding provides another opportunity for those who missed out the first time.
So if you had trouble getting the PPP loan the first time, you may have another option: fintech companies.
How can fintech help?
The SBA approved a number of fintech companies to provide loans – either through the companies themselves or by way of their partner banks. This may prove especially useful for business owners who do not have longstanding relationships with a traditional bank. It also presents unique opportunities for sole proprietors and independent small business owners.
When it comes down to it traditional banks experienced significant delays in the lending process because their systems were stuck playing catch up with the skyrocketing demand. Fintechs, however, already have technology on their side. The application can be streamlined for businesses that have pre-existing accounts and lending history with their payment processors, bookkeeping, and payroll services.
Companies working with fintech companies to secure a PPP loan have described relatively quick turnaround times and a more efficient and seamless process compared to banks. In addition, some applicants who went through a bank and received approval for the loan are still waiting to receive the funds, while others who applied through fintech companies received funding within a week. Even the SBA recognizes that financial technology solutions can promote efficiency and financial inclusion in implementing the PPP.
Keep in mind that some fintech companies continue to function similarly to banks in that they are only accepting loan applications from current customers, however others are accepting loans from anyone. If you are having trouble with the PPP loan process, it may be worthwhile to consider a fintech route.
Who are approved fintech PPP lenders?
Offering loans directly
The following list of companies have received approval from the SBA to allow business owners to apply for a PPP loan through them directly. As mentioned above, some of the companies on the list only accept applications from current customers or account holders, they are noted with an asterisk (*).
- Intuit QuickBooks*
- Funding Circle
- Ready Capital
Working with their partner bank
The following list of companies do not process SBA loans directly. Instead, you can apply for a loan through them and they will package it and apply for a loan through a partner bank.
- Reliant Funding
How can Squar Milner help?
If you are looking to capitalize on the Paycheck Protection Program, we are here to help. Our team of tax experts can work with you to maximize your PPP loan forgiveness and make sure you are making the most of your approved PPP loan.
To learn more about PPP loan forgiveness, check out our recent webinar or go to our Squar Milner COVID-19 Resource Center to learn more about the CARES Act, the PPP, and the other measures designed to help your business through these unprecedented times.
Still have questions about how the Payment Protection Program applies to your specific business?
Disclaimer: This material has been prepared for informational purposes only, and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional tax planner or financial planner. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.