Square has become the latest fintech company to receive approval from the U.S. Treasury to participate in the emergency lending program for small businesses. The payments processor will roll out loan applications this week, starting off with businesses whose application data can be verified automatically.
The U.S. government launched the Paycheck Protection Program (PPP) as part of its $2.3 trillion economic stimulus package. The PPP is meant to cushion small enterprises and their staff against the economic effects of the coronavirus pandemic. Administered by the Small Business Administration (SBA), the distribution of the $350 billion kitty had been entrusted to commercial banks. However, after spirited lobbying, selected fintech firms will now get to participate.
Jackie Ress, the lead at Square Capital revealed the approval on Twitter, revealing that the firm will work with Salt Lake City-based Celtic Bank.
1/4 Square Capital has received U.S. Treasury and SBA approval to be a PPP lender, and we will start rolling out our PPP loan applications this week. We continue to work with our partner Celtic Bank as they have existing expertise as a leading SBA lender.
— Jackie Reses (@jackiereses) April 13, 2020
The San Francisco-based company will notify its clients once their applications are available via the Square Dashboard. It will start off with firms whose application data it can verify automatically.
Ress added, “We know sellers need financial support now more than ever, and we’re committed to making funding accessible to as many small businesses as possible.”
Square joins PayPal and Intuit as the fintech firms that will participate in the PPP lending. The firms have been lobbying for a share of the package through Financial Innovation Now, an industry group representing non-bank financial firms. They argued through a letter to Congress that small businesses are not well served by traditional banks. Digital platforms do a better job reaching these underserved small businesses.
PayPal recently announced that it had been approved as a PPP lender, with Intuit announcing early this week. The latter also showcased its new platform, known as Intuit Aid Assist that helps businesses calculate how much federal relief they qualify for.
And while Square expands its finance business, its digital currency business has continued to expand as well. In a letter to its shareholders two months ago, the Jack Dorsey-led company revealed that digital currency sales accounted for half of its revenue in the fourth quarter of 2019.
Dorsey commented, “The peer-to-peer transfers network continues to be our best acquisition channel. Those new to the app then go on to discover bitcoin” and other in-app products.”
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.