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PayPal, Square Start Lending to Small Businesses Hurt by Virus

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PayPal, Square Start Lending to Small Businesses Hurt by Virus

Article by Olivia Rockeman and Ed Ludlow. Bloomberg

(Bloomberg) — Financial-technology firms PayPal Holdings Inc., Square Inc. and Intuit Inc. are starting to lend to small businesses that couldn’t get access to coronavirus relief funds through the biggest U.S. banks.

Fintechs had been pushing to provide emergency loans to small businesses since mid-March, more than a week before passage of federal legislation that created the Paycheck Protection Program. The companies have said that they can approve loans faster than traditional banks and reach the most vulnerable businesses but ran into obstacles before getting Small Business Administration approval.

“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.” […]

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