Late in the week, the U.S. Congress passed another coronavirus economic relief package. The legislation includes refilling of the depleted Paycheck Protection Program for small businesses, which most expect will be drained a second time — likely at a much faster rate in this latest round.

Readers of The Financial Revolutionist probably don’t need a rehashing of all the challenges that arose during the first round of funding created by the CARES Act. Suffice it to say that federal Small Business Administration loans, like many things that involve the government, come with a lot of paperwork; demand was off the charts, and the funds ran dry in 13 days.

Processing such a massive volume requires speed and agile technology — not exactly the first attributes that come to mind when thinking of traditional lenders.

For perspective, consider the following from Numerated, a fintech that offers a digital lending and sales platform for banks (and has launched a CARES Act Lending Automation solution): “In a typical year, the SBA will distribute upwards of $30B to small businesses across the country. The number as outlined in this legislation is more than 10 times what the Administration is accustomed to handling.”

When the PPP was initially introduced, The FR was among those with high hopes for the role fintechs would play in the process. 

Several fintech lenders applied to become approved and enrolled in the SBA program. They sat at a red light while traditional lenders started submitting applications to the SBA, and once the light finally turned green, the first round of funds was gone. The now-approved lenders include PayPal, QuickBooks, Square, OnDeck, Funding Circle, Kabbage, and BlueVine.

Not able to participate as a direct lender, the role for fintech during the first wave of PPP loans was focused on providing automation technology to traditional lenders and helping to pre-process loans. Many will play a similar role in the second wave. 

Still, their seat at the table seems to be growing more secure. Platform providers like nCino and Unqork have demonstrated they can quickly modify their technology to accommodate PPP processing. Others have announced partnerships with the potential to expand their reach into the lending ecosystem. 

For example, this week Boss Insights announced a collaboration with Oracle to release Boss CARES/PPP powered by Oracle Cloud, a fully automated end-to-end platform that supports the PPP. Boss Insights’ platform empowers lenders with customer arbitrage by providing 360-degree insights on businesses, helping to accelerate loans and the borrower journey from months to minutes. 

Other news came from Lendio, a free online marketplace that helps small business owners find loans. The company announced a strategic relationship with Jack Henry & Associates to provide white-labeled loan application and document gathering infrastructure for Jack Henry’s financial institution clients.

As lenders and small businesses await the opening of applications for this second round of funding, the importance of lending tech in helping small businesses access U.S. stimulus funds is clear.