Funding Circle (LSE: FCH), an SME lender that facilitates loans in both the US and parts of Europe, announced on Wednesday it has received approval to issue Paycheck Protection Program (PPP) loans through its online lending platform. As previously reported, the PPP is part of the $2 trillion CARES Act aimed at getting small business owners back on their feet and millions of Americans back to work during and following the COVID-19 pandemic.
Speaking about the approval, Bernardo Martinez, Managing Director of Funding Circle US, stated that the PPP is a vital part of ensuring “main street small businesses” retain their employees.
“We are glad to be able to offer this government-guaranteed forgivable loan that can provide critical capital to small business owners coping with this unprecedented period of economic upheaval.”
The approval comes just days after Funding Circle decided to pause its secondary market due to the COVID-19 pandemic. The lender revealed in a blog post:
“In light of the current situation, we have decided to initially take a prudent approach and extend this tightening, strengthening our criteria for businesses from vulnerable areas of the economy. We have also adjusted our pricing—taking into account how the economy may perform—to maintain projected returns for new loans at current levels. We are focused on originating loans that we expect to be resilient during this period.”
Funding Circle then reported that as a regulated entity, it wanted to ensure that loans that are bought and sold on the secondary market are priced fairly. For the time being, investors may not sell loan parts nor purchase existing loans. Active listings will be delisted.