What Happened?

COVID-19 brought the US economy to a grinding halt in March 2020. As the virus spread across the country, governments nationwide mandated a closure of most non-essential businesses, threatening their ability to sustain payroll and the livelihood of their employees.

In an attempt to prevent widespread economic disruption, the US government passed the CARES Act to provide immediate economic assistance to those impacted by the pandemic. The legislation contained a number of support mechanisms, including increased unemployment payments, renter protection via an eviction moratorium, a freeze on student loan repayments, and homeowner assistance funds, among many others. The Payment Protection Program (PPP) was an element of the CARES Act designed to prevent mass layoffs and support small business owners through the period of lockdown.

What is the PPP?

PPP was a cornerstone program of the CARES Act, intended to help employers keep their employees on their payroll by covering up to two months of their payroll expenses with a loan that could be completely forgiven if it was spent in accordance with the program’s guidelines.

Given the severity of the threat posed by COVID-19, the government sought to create a program that focused on speed and access. PPP was designed to be an intentionally untargeted program with limited safeguards in place so as to prioritize reaching those in need as quickly as possible.

The launch of PPP was met with enormous demand and the program was renewed two times to meet the flood of applications. However, due to the structure of the program, it became clear that there was a growing divide when it came to loan disbursement, with lenders prioritizing applications for clients who would take out the largest loans and bring in the highest fees. Many were also unwilling to lend to individuals altogether.

What Was Blueacorn’s Role?

Blueacorn was founded in April 2020 with the singular purpose of advancing the original mission of PPP by democratizing access to loan relief for America’s small businesses, independent contractors, and self-employed workers – groups who are often overlooked by our traditional banking system and could not seek relief through the traditional PPP channels.

As a fintech lender service provider, Blueacorn partnered with the Small Business Administration (SBA) and CDFIs to facilitate the application for and fulfillment of PPP loans predominantly for businesses and workers who qualified as independent contractors, self-employed individuals, freelancers, and gig workers. Blueacorn saw enormous demand during this period, ultimately supporting 808,000 small business owners / sole proprietors via disbursement of $12.5 billion in SBA PPP funds.

Blueacorn’s borrowers were the people who keep our economy running and weave together the fabric of our communities: beauty salon owners, truck drivers who are operating their business off their phone in between stops, our favorite local coffee shops and restaurants that define our neighborhoods, residential construction workers, rideshare or taxi drivers, landscapers, and local delivery workers, among a variety of other professionals.