Jack Dorsey’s Square will join PayPal and Intuit QuickBooks Capital in helping the US government distribute emergency funds to small businesses that are reeling from the coronavirus economic meltdown. After leading fintech companies lobbied for weeks to help distribute billions in forgivable loans by using their online platforms, the three companies were approved by the US Treasury Department to participate in a historic effort to help distribute $350 billion in emergency loans.
The US Treasury Department and the Small Business Administration launched the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act that was passed on March 27th to hand out emergency cash in the form of forgivable loans. Qualifying small businesses will have to retain all of their employees for at least eight weeks.
Without seasoned teams in place to reboot the economy, the coronavirus could deal yet another blow, potentially forcing employers to rehire and retrain. The stimulus program is designed to mitigate the turmoil, minimize disruption and maintain the integrity of small businesses so that they can resume full functionality once the lockdown orders are removed and people can return to work.
Distributing billions in funds, however, is proving to be a herculean task for the federal government, which lacks the infrastructure to automate and expedite the process, delivering cash swiftly to businesses across the country. Partnerships with traditional banks to distribute the emergency aid are proving to be equally frail, opening the door for a boost from Silicon Valley tech giants.
Square announced its approval into the program on Monday, following PayPal and Intuit which joined last week. The three companies are now non-bank SBA-approved lenders for PPP, allowing small businesses and other eligible applicants to apply for the federal relief directly through their portals.
The designated funds are earmarked for sole proprietors, self-employed workers, small business owners with employees, and independent contractors, offering low-interest loans that may be 100% forgiven.
According to a statement from Square, its team of developers are “sorting through the details” for eligible participants to speed up relief efforts. Although the company is not yet accepting applications, it plans to notify sellers on the platform as soon as they’re available.
PayPal reportedly began disbursing funds to applicants on Thursday and QuickBooks is also gearing up to accept applications.
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