Square Capital announced Monday (April 13) it’s the latest FinTech to participate in the federal Paycheck Protection Program (PPP).
In a tweet, Square Capital Lead Jackie Reses announced the San Francisco-based company, which allows anyone to accept credit card payments using a smartphone or tablet, has been approved to process the U.S. Small Business Administration loans and will collaborate with Celtic Bank of Salt Lake City to launch its program this week.
“We know sellers need financial support now more than ever, and we’re committed to making funding accessible to as many small businesses as possible,” Reses tweeted. “We will notify sellers when their application is available via Square Dashboard, starting with employers whose application data we can verify automatically.”
The company put together a guide for its merchants to follow to prepare for applying through its site for loans from the $350 billion fund administered through the U.S. Small Business Administration and part of the $2 trillion CARES Act passed in March. Square Capital joins PayPal in being able to distribute PPP loans.
Square said on its site that its “team has been busy behind the scenes sorting through the details for you … we’re working closely with our partners to understand when we’re able to help distribute this money, so we aren’t accepting applications yet.”
The company urged its customers to get their applications ready to go to expedite the process once the program is up and accepting loan applications.
The funding is for businesses with less than 500 employees and is intended to help small- and medium-sized businesses afloat by providing forgivable loans if applicants use the cash for payroll and keep employees on the job for at least two months, or to pay mortgage interest or utilities. The measure extends to sole proprietorships, independent contractors and the self-employed.
However, a PYMNTS survey of some 700 small- and medium-sized businesses found that the program might not be enough to keep companies running. The PPP program aims to provide funding for two months of employee salaries, but SMBs we spoke to say they’ll run out of money 113 days on average before they expect the pandemic will end. That will leave SMBs with a 53-day gap between the time they go broke and the time business returns to normal. Click here to read more of what our survey found.