Over half or 50% of companies that applied for, and received funding via the US government’s Paycheck Protection Program were financial services providers or companies focused on related technology developments.
As reported recently, Fintech firms managed to acquire significant amounts of funding from the PPP initiative. However, cryptocurrency mining hardware and digital asset trading platforms – which are relatively smaller and emerging Fintech segments – did not receive as much as financial assistance from the PPP when compared to more established businesses.
The PPP aims to offer financial support to businesses impacted by the COVID-19 outbreak and resulting economic challenges. Loan recipients may use the funds to pay salaries to workers and maintain operations during these difficult times.
Fintech and blockchain industry firms such as LedgerX, a crypto-asset derivatives platform that has proposed a new Bitcoin Volatility Index, and leading Ethereum development studio ConsenSys are among many companies that recently applied for PPP loans and most of them appeared to have been approved.
However, many companies and projects like “privacy-first” cryptocurrency Zcoin have successfully self-funded their operations during the pandemic (and in general), according to an update shared with Crowdfund Insider.
The Zcoin developers noted:
“As a testament to the project’s mission, over $22,500 USD has been raised from 89 contributors across the Zcoin community via the Zcoin Crowdfunding System (ZCS). In just over a month, the project raised enough to fund the first phase of a comprehensive third-party audit, a critical step in the development of its next-gen privacy protocol, Lelantus.”
There were many borrowers in the US that signed up for Paycheck Protection Program (PPP) loans because they wanted to be able to make payroll, David O’Connell, a senior analyst focused on wholesale banking at Aite Group, confirmed.
Borrowers may qualify to have 100% of their outstanding loans forgiven if they are able to meet certain requirements, including using 60% (or more) of the amount received for their payroll and not reducing workers’ salaries below a certain amount.
Earlier this month, global financial service platform Kabbage announced that it has approved more than 209,000 PPP applications for $5.8 billion.