PayPal (PYPL -3.12%) announced Friday that it had received approval from the U.S. government to provide access to loans via the Small Business Administration's Paycheck Protection Program, which helps small businesses keep workers employed during the COVID-19 crisis.
The Paycheck Protection Program (PPP) was set up to distribute loans as part of the $2 trillion coronavirus stimulus package, and will loan as much as $350 billion in relief funds to small businesses suffering from the impact of the coronavirus.
The program was designed to provide businesses with less than 500 employees access to funds equal to up to two months of payroll expenses and other allowable business expenses, like mortgage interest, rent, and utilities. The loans carry a 1% interest rate -- without requiring collateral or personal guarantees -- and are expected to be paid back over two years. However, if a business spends at least 75% of the loan to pay employee payroll, the loan will be forgiven.
PayPal has access to a large network of businesses, young entrepreneurs, and woman-and-minority-owned enterprises, noting that it has previously provided access to more than 900,000 loans and cash advances, providing access to more than $15 billion in funding to more than 305,000 small businesses.
The company previously revealed a set of measures to provide help to the 24 million merchants that accept PayPal, including waiving certain fees and deferring repayments on some business loans. This includes waiving instant withdrawal fees and those related to chargebacks, while also extending the window for customer disputes. Through a partnership with Mastercard, PayPal is also doubling the instant cash back rewards on all purchases made during the month of April for merchants that use the PayPal Business Debit Mastercard.
Intuit on Friday announced that its QuickBooks Capital had received approval to be a non-bank SBA-approved lender for the Paycheck Protection Program and Square's Square Capital said on Monday that it, too, is an approved Paycheck Protection Program lender.