The fintech rejigged its technology for the PPP service in less than a week.

Kabbage, the aggressive fintech that focuses on small business lending, announced it will collaborate with a technology-enabled bank and authorized lender of the Small Business Administration (SBA) to pay out Paycheck Protection Program (PPP) loans. (AP News)

The fintech did not name the lender but said an announcement from the bank would follow.

Kabbage and CARES

Kabbage is using its technology and substantial previous experience in lending to American small businesses for delivering PPP loans.

The Paycheck Protection Program is part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act signed on March 27, 2020. The program aims to support small business owners and getting millions of Americans back to work following the COVID-19 pandemic.

The fintech has already received more than 37,000 PPP loan applications worth $3.5 billion.

Kabbage CEO, Rob Frohwei, stated: “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. We have the technology to respond to this national crisis and provide equal opportunity to the millions of business owners seeking relief.”

Kabbage says it is the first fintech using automated technology to process the SBA loans. It allows tens of thousands of small businesses to submit PPP applications in minutes.

Technology to the rescue of small businesses

While traditional banks expected to take weeks to process the urgently needed PPP loans, fintechs are stepping into the breach to speed up disbursements.

Kabbage claims it was able to refit its technology and processes in less than a week. It now stands ready to allow any U.S. small business to apply for the PPP financial relief.

According to American Banker, Kabbage devised the process for applicants to upload their documents, and adjusted its procedures for Know Your Customer and Know Your Business. It also introduced optical character recognition to decipher data from uploaded documents.

Speaking to American Banker on fraud mitigation, Kathryn Petralia, a Kabbage co-founder, and its chief operating officer said:

“The bad guys always come out in full force in bad times. So we feel like we’re going to have a great line on that. It’s one of the reasons that a lot of banks today are only offering these PPP loans to their existing borrowing customers, because they know they’ve already gotten through the process of verifying those customers. And it’s too hard for them to do this at scale any other way.”

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