PayPal has received approval to provide small business loans through the government’s Paycheck Protection Program, a pillar of the $2.2 trillion stimulus package to alleviate economic stress from the coronavirus pandemic.
The digital payments company on Wednesday quietly began offering the loans to the more than 10 million merchants using PayPal’s platforms in the U.S., and began disbursing the money to applicants Thursday, a PayPal spokesperson confirmed.
The approval from the Small Business Administration, announced Friday, makes PayPal one of the first non-bank lenders to be certified by the SBA. PayPal extends the small business loans through its partner bank, WebBank.
PayPal anticipated receiving early approval to participate in the PPP loan program following encouraging comments from government officials, including a recent tweet by Senator Marco Rubio that cited the company as one of “multiple fintechs” that were “ready, able and willing to process PPP loans.”
PayPal would not confirm the total amount of money it has already agreed to lend to applicants, but said there is no cap on how much money it is willing to loan. Since 2013, the company has made more than $15 billion in loans through its PayPal Working Capital program, making PayPal one of the top five small business lenders in the U.S. Each loan averages $25,000 in size, far smaller than the loans offered by major banks, which tend to be upwards of $100,000.
In an interview with Fortune last week, PayPal CEO Dan Schulman said he and his employees were working “literally 24 by 7” to be able to offer PPP loans through the SBA, as well as to allow recipients of individual stimulus checks to receive their money digitally through PayPal and its payment app Venmo. “We think that we can be a great platform for the distribution of those,” Schulman said. (People eligible for the checks can now provide their direct deposit information using a PayPal account in lieu of a bank account through a new IRS portal launched Friday.)
“Because the sooner we can get those loans into the hands of small businesses, the more quickly we’re able to get those disbursement checks into the hands of those who most need them, the better off our economy and our country will be,” Schulman added.
Only existing PayPal merchants are currently eligible to apply for the PPP loans, which the company aims to send to qualifying small businesses within 24 hours of their application.
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