- Kabbage announced a new, streamlined process Tuesday for Uber and delivery drivers to apply for Paycheck Protection Program (PPP) loans in response to unique difficulties they face while trying to obtain federal relief because of the coronavirus.
- The process "clarifies eligibility, how to apply and will be automatically pre-populated with information relevant for independent contractors using Uber," according to a press release.
- At least 40% of Kabbage applicants are self-employed, said the company's co-founder, Kathryn Petralia. The online lender is the fourth-largest PPP provider, with more than 140,000 approved applications, she said.
Independent contractors — such as Uber drivers — have had an especially rough time during the pandemic. Besides the different rules for independent contractors to apply for federal financial relief through the PPP, drivers are facing a dramatic dropoff in revenue.
Uber cut 14% of its workforce as fewer people used the ride-sharing service amid concerns about the spread of the virus, The Wall Street Journal reported last month.
"Most independent contractors had difficulty accessing PPP funding through their bank," Petralia told Banking Dive in an email. "In the best of times, these businesses are underserved by traditional financial institutions and that trend continued during the pandemic."
One of the biggest challenges facing Uber drivers was whether or not they qualified to apply for PPP assistance.
"Partnering with Uber opened an opportunity to serve more independent contractors that may not know they qualify, how to apply, or who will accept their application," Petralia said. "We simplify all of this for them."
Because of the many independent contractors and self-employed individuals applying for PPP assistance through Kabbage, the fintech lender has ramped up automation to simplify and streamline the process, Petralia said.
"Over 90% of all approved self-employed businesses that applied through Kabbage had an automated experience," she said. "Our median loan size is $13,500 and over 80% of all customers have 5 or fewer employees."
Kabbage’s application streamlining comes after the fintech lender briefly paused lending to some of their existing small-business clients at the end of March to "restructure" their systems to meet PPP demand.
The fintech also furloughed an unknown, "significant" number of employees, closed its Bangalore, India, office, and cut pay to executives, according to TechCrunch.
Kabbage CEO Rob Frohwein said he hopes more Uber drivers will apply for PPP assistance through Kabbage now that the process is simpler and more stable.
"With more than $100 billion left in the PPP, there is a meaningful opportunity for the self-employed to still apply and receive funding," he said. "With Uber, we aim to provide hundreds of thousands of more independent contractors access to federal funding."