PayPal, Square, and Intuit Approved as Direct PPP Lenders

In April 2020, the Small Business Administration approved PayPal, Square, and Intuit as direct lenders in the Paycheck Protection Program (PPP), enabling them to distribute emergency coronavirus relief funds to small businesses. This was a landmark regulatory step, as fintechs were granted the ability to originate SBA-backed loans alongside traditional banks. Each company leveraged its existing small business platform — PayPal's merchant network, Square's seller ecosystem, and Intuit's QuickBooks customer base — to rapidly deploy capital.

The move effectively embedded lending into platforms that millions of small businesses already used for payments and accounting. Financial terms followed standard PPP guidelines with 1% interest rates and potential loan forgiveness. The approval demonstrated regulators' willingness to expand fintech participation in critical financial infrastructure during a crisis, setting a precedent for broader embedded finance adoption.

The initiative helped address capacity bottlenecks at traditional banks that were overwhelmed by PPP loan applications.