Federal Reserve Bank of San Francisco research found that fintech lenders were critical to delivering PPP loans to underrepresented populations including Black-owned businesses during the pandemic. The research indicates that about 1 in 4 Black-owned companies applied with fintech lenders.

According to research from the Federal Reserve Bank of New York, 95% of large bank applications came from applicants who had an existing relationship with a bank. Fintech lenders were able to bridge the gap and provide financial support to underserved applicants, particularly those without a direct relationship.

According to the Federal Reserve Bank of San Francisco, fintech lenders’ loan sizes were smaller and the number of loans increased 5X from Round 1 (where fintechs were not initially included) to Round 2, while large banks’ loan sizes and amount remained relatively the same. The smaller loan sizes and larger quantity of loans facilitated by fintech lenders highlights how crucial fintech was in getting these financial lifelines to more and more small businesses with fewer employees that were most in need.