London Daily

Focus on the big picture.
Saturday, Oct 03, 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
UK Councils to Receive Sweeping Planning Powers to Ban New Vape and Betting Shops
Chancellor John Healey Faces Tax and Pension Scrutiny Ahead of Autumn Budget
Metropolitan Police Apologise for Accidental Disclosure in High-Profile Investigation
UK Universities Report Record International Enrolment as Housing Pressure Grows
UK Logistics Firms Monitor Rhine Disruption as Low Water Threatens European Supply Chains
UK Food Industry Warns Inflation Could Approach 7%
UK Introduces Vaping Duty and Mandatory Retail Stamps
Scotland Raises Property Taxes and Expands Child Payment in Annual Budget
Greggs Plans Four Factory Closures With 740 Jobs at Risk
OECD Raises UK 2026 Growth Forecast to 1.1%
UK Inflation Rises to 3.1% as Bank of England Faces Rate Debate
Andy Burnham Criticises Brexit and Says Rejoining EU Single Market Remains an Option
UK Imposes New Sanctions on Russian Military Networks and Propagandists
UK Launches Nationwide Early-Release Prison Scheme
Andy Burnham Says Security Services See Signs of Iranian Involvement in RAF Fairford Incident
Manchester City Found Guilty on Premier League Financial Charges After Independent Investigation
Scottish Court to Rule on Bid to Force No-Confidence Vote Against Aberdeen Council Co-Leader
UK Bans Extra Charges for Seating Children Under 12 Beside Accompanying Adults
UK Introduces Vaping Duty and New Licensing Requirements
Greggs to Close Four UK Factories and Cut 740 Jobs
Hundreds of Prisoners Released Early as England and Wales Prisons Reach 98% Capacity
UK Unveils New Russia Sanctions Targeting War Funding and Shadow Fleet
Burnham Says There Are Strong Indications of Iranian Involvement in RAF Fairford Security Breach
Prime Minister Andy Burnham Raises Prospect of Reviewing Britain's Post-Brexit EU Relationship
Markets Price in Bank of England Rate Increases as Inflation Rises to 3.1%
UK Borrowing Costs Climb Toward 5.5% as Global Bond Sell-Off Intensifies
UK-France One-In-One-Out Migration Agreement Expires as London Seeks Alternative Measures
Southwest England Faces Flood Alerts After Heavy Autumn Storms
UK Expands Funding for Rapid Electric Vehicle Charging Infrastructure
Welsh Government Approves Funding to Upgrade South Wales Transport
Northern Ireland Tensions Rise as Orange Order Rejects Drumcree Compromise
NHS Leaders Back Early Design of Proposed National Care Service
More Than One-Third of Regional UK Universities Face Financial Deficits
UK Current Account Deficit Narrows as Cross-Border Financial Flows Remain Strong
Bank of England and FCA Issue New Rules for Stablecoins and Digital Assets
MI5 Warns UK Universities Over Research Links With Chinese Institutions
UK Energy Price Cap Rises 4% as Electricity VAT Is Temporarily Suspended
Equity Calls for UK Personality Rights to Protect Performers From AI Replication
OpenAI Pauses Advanced Model Training Following Safety Concerns
Scottish Government Proposes Replacing 32 Councils With Larger Regional Authorities
Ofgem Raises UK Household Energy Price Cap by 4% From October
UK Counter-Terrorism Police Continue Investigation After Five Arrests Near RAF Fairford
OECD Cuts UK 2027 Growth Forecast to 1%
Labour Says State Pension Triple Lock Remains Protected Through Current Parliament
Andy Burnham Pledges National Care Service With Free Social Care in England
Six Flags Permanently Shuts Landmark X2 Roller Coaster Following Safety Scandals
Metropolitan Police Rule Out Terrorism in Golders Green Stabbing Investigation
Lithium-Ion Battery Identified as Cause of Fatal Merseyside House Fire
UK Department Rejects New Sea Use Framework Due to Stakeholder Fatigue
Major Thames Water Pipe Burst Causes School Closures in London
×