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   제목: How Two Start-Ups Reaped Billions in Fees on Small Business Relief Loans


How Two Start-Ups Reaped Billions in Fees on Small Business Relief Loans


By Stacy Cowley and Ella Koeze

June 27, 2021



Though Congress approved billions in aid for small companies to help them keep paying their employees during the pandemic, there was a big problem: It wasn뭪 reaching the tiniest and neediest businesses.



Then two small companies came out of nowhere and, through an astute mix of technology and advertising and the dogged pursuit of an opportunity that big banks missed found a way to help those businesses. They also helped themselves. For their work, the companies stand to collect more than $3 billion in fees, according to a New York Times analysis far more than any of the 5,200 participating lenders.

One of the companies, Blueacorn, didn뭪 exist before the pandemic. The other, Womply, founded a decade ago, sold marketing software. But this year, they became the breakout stars of the Paycheck Protection Program, the government뭩 $800 billion relief effort for small businesses. Between them, the two companies processed a third of all P.P.P. loans made this year, the Times analysis found.

Blueacorn and Womply aren뭪 banks, so they couldn뭪 actually lend any money. Rather, they acted as middlemen, charging into a gap between what big banks wouldn뭪 do and what small banks couldn뭪 do. First, they unleashed marketing blitzes encouraging freelancers, gig workers, sole proprietors and other small merchants to apply for loans through their websites. Next, they directed those applications to lenders. In return, they took a hefty cut of the fees that lenders made on each loan.



밠illions of businesses were being left out, said Barry Calhoun, the chief executive of Blueacorn, which was founded last year solely to help companies obtain P.P.P. loans. 밫iny businesses, self-employed individuals and minority communities are left out in the cold, over and over and over. Addressing that is a core mission for us.

When the government started the Paycheck Protection Program in April 2020, it quickly found that banks, from national giants to regional players, gravitated to bigger loans to more established businesses because they were easier to make and more lucrative. The program뭩 largest lender, JPMorgan Chase, refused to even make loans of less than $1,000.

To encourage banks to lend to smaller businesses, Congress in December raised the fees for small loans. And in February, the government tweaked the program뭩 rules so that unprofitable solo businesses, which had previously been ineligible, could get loans. Suddenly, there was a lot of money to be made if only someone could get businesses in the door.

밚iterally free money for those who qualify, a Blueacorn advertisement on Facebook read. Womply banners adorned billboards and New York City buses. 밎et up to $50,000 in PPP, read one. 밃pply now!

Those appeals were wildly successful. From late February to May 31, when the program ended, the companies processed 2.3 million loans. Most were for less than $17,000, and the vast majority went to solo ventures, which are more likely to be run by women and people of color.


All that hustle had downsides, including widespread customer service failures. And some lenders now have regrets about signing rushed deals that delivered most of the profit to their partners.

Excerpts articles from The New York Times
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