PayPal, Square, and Intuit Begin Lending to Small Businesses

Businesses that could not get relief funds through big U.S. banks may be very happy to learn that financial technology firms PayPal, Square, and Intuit, have began lending to them.

According to the companies, they can approve loans faster than traditional banks and reach the most vulnerable businesses.

“The PPP program has manual checks and processes that require time, and we’re doing the best we can despite having tech that can operate at scale and efficiency,” said Brian Peters, executive director of Financial Innovation Now, an industry group that counts PayPal and Square as members. Fintechs have had to “retool their lending programs to make PPP work.”

PayPal’s Chief Executive Officer Dan Schulman was on calls with the Treasury Department for weeks prior to getting PPP approval this past Friday.

According to Schulman, as many as 70% of PayPal’s small-business loans go to U.S. counties that have lost 10 or more banks since the financial crisis in 2008. The company’s loans are generally less than $25,000 each. PayPal is offering access to the PPP to its existing 10 million merchants through a relationship with WebBank.

Square also serves borrowers that “have been locked out of the financial system,” said Jackie Reses, Square Capital lead.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.