Coronavirus has put a strain on the organizations which has led to the emergence of loan applications by them for the purpose of survival. 820,000 small business loans have been allocated $205 Billion from the federal emergency funding according to the calculations of ABA Data Bank.
Funds have been allocated, but when will they actually reach the owners who need them? It could take several weeks. A sudden increase in the demand for loans has made it tougher for the traditional banks to catch up and accelerate the lending process. That is when Fintech companies come into the picture.
These companies have pre-existing technology to provide faster assistance and can provide immediate fund reliefs to account holders based on their lending history. They can make use of their systems and processes that are technologically equipped for bookkeeping, payroll and payment services. According to CNBC, the first Small Business Administration (SBA) approved non-bank lenders were PayPal and Intuit QuickBooks.
In times like these, business owners require funds on an immediate basis and relying on traditional banks has led to disappointment for many. So, how can they get access to cash sooner? Fintechs can make it possible for them. Time has come to implement “Real-Time Lending” and deliver instant approval and funds to the applicants in need. It is possible for the fintechs to do so because of their existing framework of services and now only need the backing of the Paycheck Protection Program (PPP).
These services will be immediately available to existing customers and new customers might require more time and heavy documentation. Many fintechs like FIS, PayPal, Stripe, Kabbage, QuickBooks, etc. are looking at processing PPP Loans.
How will these fintechs manage loan payments and PPP processing? Details will be available once more information rolls out. To get access to such news about the fintech industry, follow Fintechbuzz. Fintechbuzz delivers news and information on all aspects of the fintech world.