London Daily

Focus on the big picture.
Sunday, Oct 25, 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
Department for Environment Food and Rural Affairs Implements Stricter Water Quality Regulations for British Rivers
Welsh Government Launches Major Renewable Energy Initiative to Expand Offshore Wind Capacity Along the Coast
Northern Ireland Executive Reaches Final Agreement on Comprehensive Regional Infrastructure Modernization Plan
Office for National Statistics Reports Moderate Increase in British Retail Sales Driven by Autumn Discounts
Scottish First Minister Announces Emergency Housing Strategy to Tackle Severe Homelessness Across Urban Centers
Automotive Industry Leaders in the United Kingdom Urge Government Support for Electric Vehicle Manufacturing Transition
United Kingdom and European Union Initiate High-Level Negotiations on Post-Brexit Defense and Security Pact
National Health Service England Introduces Sweeping Digital Reforms to Reduce Hospital Waiting Lists Nationwide
Chancellor of the Exchequer Outlines Emergency Fiscal Measures to Address Local Government Funding Crises Across England
Bank of England Governor Warns of Persistent Inflation Pressures Impacting Interest Rate Decisions in the United Kingdom
UK Conservative Party Suspends Former Electoral Candidate Following Undercover Investigation
Actors and Writers Condemn British Anti Terror Legislation Targeting Activist Groups and Free Speech
Central Bank and Treasury Monitor Inflation Risks as International Monetary Fund Upgrades United Kingdom Growth Forecast
Storm Boelo Batters British Isles With Eighty Mile Per Hour Winds Causing Widespread Power Outages
British Intelligence Services and Technology Firms Partner to Counter Artificial Intelligence Enabled Cybersecurity Threats
UK Consumer Confidence Falls at Fastest Rate Since Brexit Vote as Cost of Living Intensifies
Chancellor John Healey Prepares Landmark Autumn Budget Focused on Devolution and Fiscal Rules
Northern Ireland Executive Ministers Reach Consensus on Shared Economic Development Priorities to Stimulate Regional Growth in Belfast
Department for Business and Trade Finalizes Conditional Support Package for Advanced Semiconductor Fabrication Facilities in Newport
Welsh Government Unveils Regional Industrial Development Strategy to Attract Green Energy Investment to South Wales Manufacturing Hubs
Foreign Secretary David Lammy Concludes Diplomatic Mission to European Capital Cities to Strengthen Post-Brexit Defense Cooperation
Department for Environment, Food and Rural Affairs Implements Stricter Regulatory Compliance Standards for Water Utilities Across England
Office for National Statistics Reports Moderate Wage Growth Stabilization and Resilient Employment Figures Across the United Kingdom
Scottish Government and Trade Union Representatives Reach Tentative Pay Agreement for Public Sector Transport Workers in Edinburgh
National Health Service England Announces Emergency Capital Funding Allocation to Reduce Winter Emergency Department Bottlenecks
Bank of England Monetary Policy Committee Signals Cautious Approach to Interest Rate Reductions Amid Persistent Inflation Pressures
British Prime Minister Keir Starmer and Treasury Officials Finalize Urgent Fiscal Adjustments Ahead of Upcoming National Budget
Tour de France Organizers Confirm Historic Grand Depart Featuring Edinburgh and Yorkshire Stages
National Cyber Security Centre Issues Urgent Alerts Following Global Security Vulnerability in Core Programming Software
Independent Energy Analysts Warn Great Britain Faces Highest Winter Power Tariffs in Europe
Major British Defense Contractors Commit to Delivering Forty Thousand New Apprenticeships and Training Placements
New Bradford Railway Station Infrastructure Project Approved to Transform Regional Transit Connectivity Across Northern England
Welsh Infrastructure Stakeholders Press Government for Accelerated Local Sourcing in Military and Uniform Manufacturing
Scottish Council Governance Crisis Triggers High-Court Legal Challenge Over Leadership Ouster Bid
High Street Bakery Chain Greggs Announces Major Factory Closures and Seven Hundred Job Cuts
Automotive Manufacturer Jaguar Land Rover Advances Advanced Defense Technology Partnership with European Allies
Treasury and Bank of England Officials Signal Persistent Concern Over Inflation-Driven Interest Rate Path
International Monetary Fund Upgrades United Kingdom Growth Forecast While Issuing Inflation Warnings
National Health Service Leaders Warn of Severe Capacity Pressures as Early Winter Respiratory Infections Surge
Government Issues Emergency Resilience Guidance Advising All British Citizens to Stockpile Essential Supplies
United Kingdom Private Sector Growth Beats Expectations in October Driven by Resilient Services and Manufacturing
Barclays to Cut Five Thousand Jobs in Major Artificial Intelligence Adoption and Cost-Cutting Overhaul
Piper Tomahawk Aircraft Crash Near Drymen in Stirling Claims Two Lives as Investigators Deploy
North Sea Transition Authority Approves Jackdaw Gas Field Production After Ministerial Authorization
Government Injects One Hundred and Forty Million Pounds to Expand Urgent Care Ahead of Winter Crisis
Department of Health Warns Further Pay Rises Will Derail National Health Service Waiting List Targets
Major Environmental Emergency Declared in South Wales Following Aerospace Kerosene Spill
Tank Barrel Production Returns to Britain as Defence Contractors Accelerate Domestic Rearmament
Government Approves Controversial Jackdaw Gasfield Development in the North Sea
National Health Service Maternity Safety Review Condemned Over Flawed Artificial Intelligence Integration
×