Fintechs lobby for role in sending relief funds to SMEs

Fintech companies have been lobbying to disperse government relief funds to small business owners in danger of running out of cash as their businesses remain closed during the coronavirus crisis.

By using digital platforms developed by fintechs to lend money and process payrolls will be quicker than going through traditional Small Business Administration (SBA) procedures for disaster relief.

The suggestion comes amid the current hotly debated Republican economic relief package bill, under which the SBA would disseminate aid to small businesses, along with relief to workers and big companies. However, the agency has 30 days to determine relevant rules before it starts accepting applications for capital with many in the small business community admitting that by that point, particularly very small businesses with inadequate cash reserves and no money coming in, will already have closed.

According to Forbes, the American Institute of CPAs (AICPA), the International Franchise Association, payroll processor Paychex and Intuit, an accounting software provider, issued an open letter to President Trump, US Treasury Secretary Steven Mnuchin, Small Business Administrator Jovita Carranza, and members of Congress called for the government to disperse funds to employer businesses through existing payroll processors.

However, as the group noted, this help would apply only to employers, excluding freelancers.