CEO Statement: Kabbage Funding Update
Kabbage and the entire FinTech industry have been impacted by this unprecedented health and economic crisis. To put this into perspective, all online SMB lending platforms combined provided roughly $10 billion of working capital in 2019. The federal government’s initial response indicates that this crisis necessitates the provision of at least $349 billion in SBA guarantees to be deployed to small businesses as quickly as possible.
The funds allocated in the CARES Act have been specifically designed to be the best and most appropriate funding for small businesses to sustain their companies and employees. Of course, banks, credit unions and many others will support that effort. However, many of them lack the infrastructure to get money into the hands of small businesses fast enough to meet their urgent needs.
We officially paused Kabbage lending on Sunday, March 29 as we needed time to restructure our systems and teams to prepare to deliver billions of dollars of aid through the Paycheck Protection Program. This will hopefully begin as soon as Friday, April 3 though process challenges might make this date difficult to attain across the industry. We are always on the side of small businesses and believe strongly that these funds are absolutely the best financial product for them right now. As a result, we made the logical, responsible and ethical choice to convert all our efforts to aid the Small Business Administration in this enormous task.
Please understand these same actions have been taken industry-wide to properly redirect small businesses to the best and most appropriate emergency relief product. As an industry, we all must work to deliver an unprecedented amount of relief as quickly as possible to ensure that every small business in America can make it through the crisis.
Rob Frohwein, CEO Kabbage