Online Lender Kabbage Among Largest PPP Loan Processors

For the past couple of months, the biggest story in the world of small business has been the SBA’s Paycheck Protection Program (PPP). This of course includes the program’s successes, failures, and controversies as well as the banks and other lenders who have stepped up to help their clients claim funds. Now one online lender, Kabbage, is sharing a look at how the PPP has impacted their operations and what it could mean for the future of small business lending.

The Atlanta-based FinTech has revealed that it helped process more than 129,000 SBA PPP loan applications, amounting to nearly $4 billion in funds. According to Forbes, that’ puts them in fourth place in terms of applications processed. What’s more, this was achieved in spite of Kabbage not initally being an SBA lender. Instead, the company first partnered with Cross River Bank and later Customer’s Bank before being approved to lend directly (this approval came during the second round of PPP funding).

Notably, of the $4 billion in loans processed by Kabbage, $800 million has come via yet another partnership — this one being with MountainSeed. This initiative looks like this: MountainSeed works with 135 community banks and credit unions, who have been able to offer their small business clients easier access to PPP funds via Kabbage. The result has been a win-win-win as Kabbage has seen increased volume, small banks have been able to better serve their customers, and business owners have obtained the much-needed loans. In a press release regarding their relationship with Kabbage, MountainSeed CEO Carl Streck said, “Our partnership with Kabbage is an example of how powerful FinTech collaborations can result in a meaningful, positive impact for underserved U.S. businesses.” Streck went on to note, “While the PPP process was a rocky road for all involved, we are thrilled that many of our clients are now able to serve more businesses in their communities.”

While the focus now is on getting small business owners these emergency funds, Kabbage CEO Rob Frohwein told Forbes that this episode could be an eye-opening moment for entrepreneurs. He explained, “It’s the first time for a lot of firms to realize there is life outside the big banks.” Furthermore, like Streck, Frohwein sees more opportunities for FinTechs and community banks to work together, stating, “I think you will see more community banks partnering with FinTechs going forward — FinTechs can operate anywhere, they can be present virtually around the country.”

Despite the challenges that the Paycheck Protection Program brought, it’s hard to say the end results of the program haven’t been a success so far. At the same time, the experience has also been a lesson in the power of partnerships, the impacts of technology, and of course the resilience of small business owners. As for what’s ahead, perhaps Frohwein and Streck are right in suggesting that small business lending will forever be changed for the better as entrepreneurs gain more options and better service to help them reach their business goals.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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