Banking platforms aimed at small businesses are tweaking their offerings to accommodate clients scrambling for the Small Business Administration’s Paycheck Protection Program loans.  

“As soon as we saw the PPP was moving, we made a pipeline between us and Radius [Bank] to allow our customers to get into the queue for loans,” said Eytan Bensoussan, co-founder and CEO at the SMB banking startup NorthOne. “We did everything we could to message people proactively to get ahead. The first moment someone is concerned, we want an email in their inbox.” 

The fact that many digital-only SMB banking platforms don’t offer lending products is a problem for clients who have shuttered their operations due to the COVID-19 crisis. Through partnerships and new messaging, these companies are striving to gain favor with small business clients who prefer a digital-only platform to a legacy bank. 

New York-based NorthOne, which has gained more than 130,000 clients since launching last summer, already partners with Radius for its back-end banking services. Bensoussan said NorthOne wanted to funnel customers to a bank with a digitally native PPP application, and the Radius partnership meant NorthOne customers, who have already cleared some compliance hurdles, can apply quickly.  After Radius stopped taking new PPP applications on April 27, NorthOne developed a partnership with Cross River Bank for clients to apply for the SBA program.

Bensoussan said NorthOne created an in-app tab on its platform linking customers to the Radius PPP application. “Lots of businesses didn’t even know where to find an application,” he said. “There was so much shock at how quickly this was moving.” 

San Francisco-based Azlo, an online subsidiary of BBVA, is using its partnerships with the small business lending fintech Kabbage and the lending marketplace Fundera to connect clients with PPP loans. Cameron Peake, Azlo co-founder and CEO, said Fundera previously funneled SMBs looking for bank accounts to Azlo until the pandemic reversed that flow. But Azlo began alerting customers to the partnerships through links on its central hub and its blog, and said it is now seeing a 50% growth in weekly new users. 

According to Peake, 10% of Azlo customers had visited the company’s landing page within three hours of launching the partnerships the day after the PPP went live. “We’re really trying to provide as many resources and options for [clients] as we can,” she said. 

See also: SMB banking startups face new challenges as clients struggle

Novo, an SMB banking startup based in New York, stood up its own PPP application in only 48 hours but ended up scrapping the launch because the company couldn’t gain API access to the Small Business Administration’s E-Tran system. Instead, the company ended up guiding clients to Fundera and Cross River Bank to apply for PPP loans. Novo founder Tyler McIntyre  said Fundera was appealing for clients because its marketplace features many lenders for small businesses. 

Novo used in-app messaging and changes to its website to guide clients to PPP applications. McIntyre said the company has seen a spike in new clients and is getting “several thousand” applications each month, and its average deposits year to date have gone up 40%.  

Despite the push by SMB banking startups to guide clients to PPP loans, small businesses are still at the mercy of an SBA system that has been plagued by bottlenecks, slowdowns and reports that some banks prioritized larger loans during the first round of the PPP.  

“Across the board it was a massive failure,” McIntyre said of the first round. “By the time 1099 [workers] and contractors could apply, they were buried in the line.”