Despite Own Internal Struggles, Kabbage Teams With SBA Bank To Issue PPP Loans – Forbes


With small businesses in need of government loans, Kabbage is teaming up with an SBA bank to get … [+] them in their hands.
Kabbage, the SoftBank backed online lender that just furloughed U.S. workers amid the COVID-19 pandemic, wants to help small businesses get their hands on the loans being offered via the CARES Act.
In a press release, Kabbage said it is teaming up with an unnamed technology-enabled bank and authorized Small Business Administration lender to provide small businesses with Paycheck Protection Program loans. Kabbage said it’s the first fintech using automation to enable small businesses to submit PPP applications in minutes.
The news comes as Kabbage, just like other fintechs, has been struggling as the pandemic spreads through the U.S. and around the globe. Citing an internal memo, TechCrunch reported Kabbage is furloughing a “significant number” of its U.S. employees which stood at 500 prior to the pandemic. It’s also shutting down its office in Bangalore, India. Co-founder and CEO Rob Frohwein said in the memo the duration of the furlough remains uncertain but that it’s intended to be temporary. A Kabbage spokesperson said the company has recalled a number of its furloughed employees given the PPP loans.
While Kabbage didn’t name the bank, it’s not the only fintech stepping up to ensure small businesses get much-needed loans quickly. The fintech industry as a whole has been lobbying Congress to ensure they can participate in the stimulus program, arguing they can get money in the hands of small businesses in hours rather than weeks, which is the typical time it takes for traditional banks.
Numerated, the online lending platform, told Forbes last week it has had thousands of conversations with banks, signed on more than 70 to use its digital lending platform and expects 150 to 200 banks to launch lending platforms powered by the fintech on April 8. “In a world where you can’t sit down face to face with anyone every bank in the U.S. has to buy digital technology,” Numerated CEO Dan O’Malley said at the time. “The average bank will do thousands of loans a day compared to a couple hundred loans a year.”
Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, small businesses can get loans to cover payroll, business expenses, and operations. The loans are forgivable and are aimed at keeping small businesses afloat so they can quickly get up and running again once the shelter in place orders are lifted. Small businesses were able to begin applying for loans late last week but the process has been mired with problems including websites that crashed, traditional banks that weren’t ready to accept applications and some that would only take applications from existing customers.
For Kabbage’s part, the online lender said it has already received more than 37,000 PPP applications, representing more than $3.5 billion in requested funds. “The smallest businesses in America are always the hardest hit, the most vulnerable and the most in need when a crisis strikes, and together with our bank partner, we are working tirelessly to support them,” said Kabbage Frohwein in a press release. “We have the technology to respond to this national crisis and provide equal opportunity to the millions of business owners seeking relief.”
That may be a hard sell for Kabbage. Bloomberg, citing interviews with more than a dozen Kabbage customers and employees, reported earlier this month, the online lender cut off credit to small business customers with no notice.


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