London Daily

Focus on the big picture.
Thursday, Jul 30, 2026

PPP Scammers Made Fintech Companies Their Lenders of Choice

PPP Scammers Made Fintech Companies Their Lenders of Choice

In April the Paycheck Protection Program was under fire for moving too slowly and leaving too many people out.
In April the Paycheck Protection Program was under fire for moving too slowly and leaving too many people out. Part of the $2 trillion Cares Act, it was set up to offer forgivable loans to small businesses such as restaurants and hair salons that would help keep them afloat through the Covid-19 lockdowns in the U.S. Banks were initially in charge of administering the government-backed payments. In an effort to distribute the desperately needed money faster, web-based companies were later allowed into the program. Grateful businesses praised their speed.

It turns out scammers found them useful, too.

Financial technology companies handled 75% of the approved PPP loans that have been connected to fraud by the U.S. Department of Justice, a Bloomberg analysis of more than 100 loans at the center of the cases shows. The fintech companies arranged just 15% of PPP loans overall. They include Kabbage and BlueVine Capital, as well as banks and nonbank lenders that work with such companies, including Cross River Bank, Celtic Bank, and Ready Capital.

In many cases, a simple Google or state records search would have suggested an applicant’s business didn’t exist or was dormant. One borrower facing charges allegedly got approval for $3 million from Ready Capital Corp. for a business in Beaumont, Texas, even though the company had no website or presence on social media and the business address provided, according to Google Maps, was for a single-family residence. (Investigators intervened before the loan was funded.) Another borrower in Little Rock, Ark., received almost $2 million from Kabbage Inc. and BlueVine Capital Inc. for businesses that weren’t in good standing with the secretary of state.

Borrower fraud doesn’t mean lenders broke the rules of the program, and they haven’t been accused of wrongdoing. The U.S. let them rely on self-certifications by applicants attesting that they were eligible for the loans. A spokesperson for Ready Capital says it “implemented due diligence measures and complied with SBA directives to expeditiously provide relief to small businesses.” Kabbage and BlueVine also say they took steps to scrutinize applications.

But the need for speed may have had unintended consequences. “The fraud checks didn’t really occur upfront,” says Bill Phelan, senior vice president at PayNet, a unit of Equifax Inc. that helps lenders assess the risk of business loans. “The impetus was to get the money out the door and help businesses survive.”

Bloomberg examined hundreds of pages of filings and cross-referenced them with public records to identify the lenders involved in the criminal cases. The analysis focused on instances in which loans had been funded or approved and the type of lender could be identified.

The cases brought by the Justice Department represent about $175 million in alleged fraud, which is a small fraction of the $525 billion in loans approved through one of the biggest government relief programs in history. But PayNet says that among loans for $150,000 or more, about $20 billion worth—or up to 5%—raise some red flags.

At the start of the PPP, run jointly by the Department of the Treasury and the Small Business Administration, many of the largest banks prioritized existing customers to avoid fraud or money-laundering risk. That left small businesses without a banking relationship scrambling to get money before it ran out.

Emissaries from the fintech sector appealed to authorities, saying they could reach vulnerable businesses. They got the green light on April 14, by which point almost two-thirds of the first round of $349 billion in funding had been allocated. Lawmakers later made an additional $320 billion available. Fintechs dominated that second round, which ended in August. Kabbage, which had never before processed an SBA loan, surpassed megabanks to become the second-biggest PPP lender by application volume, approving funds for almost 300,000 businesses. More than 75% of applications that flowed through Kabbage were approved “without human intervention or manual review,” according to a report from the company. The median approval time: four hours.

A Kabbage spokesperson says data and technology allowed it to conduct “rigorous verification checks” that “go well beyond the minimum requirements issued by the SBA.” Kabbage conducts additional verification analyses after loans are approved but before they’re disbursed.

All over the internet, anxious business owners swapped tips about which lenders had the easiest application processes and which were taking on new clients. Borrowers talked about online lenders approving their loans in as little as an hour. One whose application was processed by BlueVine received SBA approval so fast the person wondered if something had gone wrong.
Newsletter

Related Articles

0:00
0:00
Close
Early-Release Scheme Faces Fresh Scrutiny as Reoffending and Prison Recalls Rise
Police Phone Checks Followed Report on Murder of MI5 Agent Inside Sinn Féin
Drought Status Extended Across All of Wales as Heat and Dry Weather Deepen Environmental Strain
Record-Low Danube Exposes Probable Mammoth Remains in Bulgaria
US Says It Has Carried Out Heavy Strikes on Iran After Attempted Attacks on Its Forces
The chief executive of the popular gaming company laid off many employees and his pay rose to 38 million dollars
UK Employment Holds Steady as Wage Growth Remains Moderate
England to Introduce Artificial Intelligence into Secondary School Curriculum
Wales Launches £1.2 Billion Industrial Regeneration Programme
High Court Upholds UK Digital Surveillance Framework
Northern Ireland Reaches Budget Agreement on Infrastructure and Public Sector Pay
Home Office Expands Digital Border Checks Nationwide
UK Approves Major North Sea Wind and Carbon Capture Project
The World's Most Terrifying Smartphone: Recording, Documenting, and Reporting to the Regime
Scotland Approves Major Renewable Energy Expansion
UK and United States Sign AI and Semiconductor Cooperation Pact
UK Treasury Tightens Fiscal Controls After Gilt Market Volatility
Bank of England Holds Interest Rates at 4.5%
UK Unveils £10 Billion NHS Funding Overhaul and Workforce Reform
The AI User Nightmare: Private Claude Conversations Leaked to the Internet
UK: Former Football Association Leaders Call for World Cup Boycott Over FIFA Privatization Plan
Forbidden Love: China severs millions from their virtual partners
Over 24 Hours in the Air: Qantas Airbus Completes Record-Breaking Test Flight
Prince Harry Faces Significant Legal Costs After Insurance Shortfall
FirstGroup Sells Rail Software Business to Tracsis for £48 Million
Victoria and Albert Museum Staff Vote for Strike Action
Norwegian Teenager Convicted Over Contract Killing Plot in Britain
Royal Mail Raises Bulk Mailing Prices by 30%
Immigration Remains Britain's Top Public Concern, Ipsos Survey Finds
Prime Minister Says Social Care Reform Must Precede Assisted Dying Legislation
Ofgem Proposes Steep Grid Connection Charges for New Data Centers
Major Cyberattack Compromises UK Education and Police Data
Government Reviews Jurisdiction Over Crimes Involving US Military Personnel
England Declares Widespread Drought After Record Dry July
UK Commits £8.4 Billion to Dreadnought Nuclear Submarine Program
Zuckerberg Opposes US Ban on Chinese AI Models and Warns of Regulatory Capture
Massive Wildfires Ravage Southern Europe: Fatalities in Greece and Evacuations Across France, Spain, and Turkey
NHS Leaders Warn Royal Mail Tariff Increases Will Raise Administrative Costs
Immigration Remains the Public's Top Concern in Britain, Ipsos Poll Finds
Britain Approves 16 New Grid Storage Projects to Strengthen Electricity Network
London-Listed Merger Activity Climbs Even as IPO Market Remains Weak
Institute of Directors Warns High Energy Costs and Taxes Continue to Weigh on UK Businesses
North Sea Industry Calls for Faster Approval of £10 Billion Rosebank and Jackdaw Projects
UK Inflation Eases to 2.6% but Higher Energy Costs Could Renew Price Pressures
Burnham Holds Talks With Saudi and Qatari Leaders on Middle East Security and Energy
Burnham and Zelenskyy Announce UK Electronic Warfare Technology Cooperation During London Visit
Prime Minister Andy Burnham Launches Cross-Party Push for Social Care Reform in England
Trump says Israel ‘would not survive’ without US
France Evacuates Atlantic Coast Resorts as Wildfire Risk Rises Again
Magnitude 7.1 Earthquake Strikes Kumamoto as Rescuers Search Collapsed Buildings
×