It has been amazing to see the response of the fintech community to the COVID-19 global crisis. This is a medical crisis first, but also a huge crisis for our small business community.
According to the Small Business Administration (SBA), small businesses make up 99.7% of U.S. employer firms, 64% of net new private-sector jobs, 49.2% of private-sector employment, 43% of high-tech employment, and 42.9% of private-sector payroll. This equates to about 45% of U.S. GDP on a yearly basis!
Millions of small businesses have been crushed by state and local decisions to shut them down to prevent the spread of COVID-19. The U.S. Congress passed the CARES act, issuing $350 Billion in SBA backed loans to small businesses. Many fintechs have stepped up to help with this initiative, and have provided other needed assistance.
Not only has Square’s founder allocated $1 Billion of his Square stock to fight this virus, Square has offered to help the SBA with their loan allocations, and has waived subscription fees in March and April for sellers on their platform. You can find more information on their website here.
One of our integration partners Plaid, has told CNBC they are building a solution that would help lenders qualify small businesses for loans faster. They are doing this by allowing lenders to digitally pull payroll data for customers new to a particular bank.
“Speeding up loan processing could mean the difference between a business and its employees surviving intact, or going bankrupt and adding to the skyrocketing unemployment. We are working to enable the quick and secure sharing of payroll data so critical data can be verified instantly so funds are distributed as quickly as possible.”Plaid CEO, Zach Perret (Source: CNBC)
Another integration partner of ours, MX, put a press release out announcing a new SBA loan portal for credit unions and banks. They claim that the new portal will reduce the time of a PPP (Payment Protection Program) application from 30 minutes to 30 seconds.
“By launching a streamlined application process for banks and credit unions, we are making it easier than ever for financial institutions to get critical funds into the hands of small business owners so their doors stay open and they can meet their financial obligations, particularly to their employees.”Ryan Caldwell, Founder and CEO of MX
At Hydrogen, we are allowing government agencies, healthcare providers, and others on the frontline of the fight against COVID-19, to use our platform 100% free. This will allow them to plug into integration partners such as Plaid, MX, Yodlee, Tink, Salt Edge, Zillow, and others, to get vital financial data on customers.
We also have financial health tools, which we covered in our post on Emergency Savings. These tools can help millions affected by the work disruption to properly budget their savings now, and plan for future crises.
Finally, we offer integrations to virtual card providers, which can be used by local, state, & national governments, healthcare companies, and insurers to provide quick payouts to employees, or the general public. These cards can be used like any Visa or Mastercard, meaning money gets into the economy weeks faster than paper checks!