Update April 27 3:48 p.m. EDT: This post was updated to include Reliant Funding.
If you've had trouble getting a Paycheck Protection Program (PPP) loan through a bank, you may have another option: fintechs. The Small Business Administration has approved a number of fintech companies to give loans--either through the companies themselves or via their partner banks--and they might prove easier for business owners who don't have longstanding relationships with a traditional bank.
While President Trump is expected to sign off Friday on an additional $320 billion in funding for the PPP, lenders currently have a backlog of applications. Like the initial $349 billion allocation, this new money is unlikely to last long.
Alexander Tiktin, a bankruptcy, restructuring, and creditors rights attorney at Davidoff Hutcher & Citron, says that he's started advising clients to look to fintechs for funding. "Based on our experience," he says, "fintech companies have been able to turn around applications relatively quickly and efficiently without too many complications." His firm works with around 300 small and midsize businesses. He notes that some of his clients who received loan approvals through traditional banks have yet to receive funds, while those that have applied through fintech companies, such as PayPal and Kabbage, have received funding within a week.
"Our technology allows us to verify high volumes of applications through automation," says Kathryn Petralia, president and co-founder of Kabbage. The company did not comment on its average wait time or how many loans it's processed.
While some fintechs, such as PayPal, Intuit QuickBooks, and Square, are functioning similarly to big banks in that they're only accepting loan applications from current customers, others are accepting loans from anyone.
"Folks that have come to Funding Circle have never been to us before," says Ryan Metcalf, head of U.S. regulatory affairs and social impact at Funding Circle, itself a fintech. "A majority of our borrowers have told us that they were turned away from their primary depository institution." Funding Circle, which the SBA approved as a lender shortly before the initial PPP funds ran out, has yet to process a loan. But the company has "thousands" in its queue, according to Metcalf.
Approved Fintech PPP Lenders
The fintechs below have been approved by the SBA and you can apply for a loan through them directly. Some of these companies will only accept applications from current customers or account holders.
- PayPal -- only to current customers
- Intuit QuickBooks -- only to current customers
- Square -- only to current customers
- Funding Circle
- Ready Capital
Fintechs Working With Partner Banks for PPP Loans
The following companies do not process SBA loans themselves. You can apply for a loan through them and they will package it and apply for a loan through a partner bank.
- Fundera -- an online marketplace for small-business loans that allows business owners to apply to multiple lenders with one application.
- Lendio -- a platform that helps small businesses match their loan applications to available financing options.
- Brex -- a financial services company that offers business credit cards and cash management accounts.
- Fundbox -- a fintech that helps small businesses with outstanding invoices optimize cash flow.
- Nav -- helps businesses with credit reports, cash-flow analysis, access to financing products, and other tools to help them get funding.
- Reliant Funding -- a fintech provider of small business loans.
Inc. will update this list as other fintechs win approval.