The CARES Act created a $350 billion program to make emergency loans to small businesses impacted by the coronavirus crisis, designed to help these companies continue to pay workers and cover their rent or mortgage payments. This is officially known as the Paycheck Protection Program, or PPP.

Since the program's introduction, major banks and regional financial institutions have approved billions' worth of these loans. However, the major fintech companies had been left on the sidelines. Now, that appears to be changing.

Two men looking at a laptop on a table inside a small workshop

Image source: Getty Images.

PayPal and Intuit are now allowed to participate -- and more could follow

On Friday, PayPal (PYPL -1.12%) and Intuit (INTU -0.14%) announced that the Small Business Administration (SBA) had approved the companies to participate in the PPP.

This certainly makes sense. After all, PayPal already has relationships with millions of small businesses, especially those that primarily operate online, and the company has been providing loans and cash advances to businesses since 2013. Intuit's QuickBooks is used by small businesses throughout the U.S., and payroll data is a key component of the PPP (the loans can be forgiven to the extent they are used to cover certain payroll expenses). 

As PayPal CEO Dan Schulman said in a press release, "We are eager to deploy our capital and expertise to do our part in helping small businesses survive this challenging period. We are thankful to Congressional leaders for ensuring the CARES Act allowed companies like PayPal to help distribute funds quickly to those businesses that are most impacted."

Other fintechs could join the program in the coming days as well. Square (SQ 0.15%) has a PPP page on its website that provides details on the program and makes it clear that the company anticipates being able to participate soon. And given its payment processing relationships with millions of small businesses, as well as its existing Square Capital lending division that could facilitate the loans, it's a natural fit.