May 6, 2020
By: Caity Witucki
Contributing Editor, C-Suite Wednesday
C-Suite Wednesday – Fintechs Take Lead in Establishing PPP Loan Forgiveness Apps
The Paycheck Protection Program (PPP) was designed to extend a lifeline to small businesses affected by the coronavirus pandemic, allowing them to keep employees on the payroll. However, as reports of publicly traded companies and large chains returning their PPP loans fill the headlines, many small businesses fear that they may become ineligible for forgiveness if they inadvertently misuse their loans. To give small businesses the confidence they need to use their PPP loans and aid lenders in calculating forgiveness, several fintechs and larger banks have begun working on web-based applications that track dispersed PPP funds.
One such fintech is Alpharank, an established company that primarily does customer journey mapping and marketing attribution data analysis for banks and credit unions. Once launched, Alpharak’s new PPP loan tracking application will run on a lending institution’s website, pulling in spending data from a small business borrower’s transaction accounts. The small business borrower will then be prompted to make attestations which are then organized by the application and given to the lending institution to fulfill SBA’s reporting requirements.
Other fintechs are working on similar applications. Boss Insights’ new BossCARES platform offers a user-friendly dashboard with real-time verification of payroll, rent, utilities, and mortgage data for compliance purposes and Numerated has expanded its existing SBA lending platform to help lending institutions automate the PPP forgiveness process.
Although fintechs are the leading producers of PPP loan forgiveness applications, community banks and credit unions have the most to gain from adopting PPP tracking software. According to a recent study conducted by Cornerstone Advisors and Autobooks, 47% of small businesses say they are likely to look for a new banking relationship this year, and the launch of PPP has already pushed many small businesses toward community lending institutions. As a result, community banks and credit unions who properly manage PPP loan forgiveness are likely to maintain their relationship with those new customers.