PPP companies Blueacorn, Womply added to congressional probe

PPP companies Blueacorn, Womply added to congressional probe

A congressional subcommittee aimed at investigating financial fraud during the pandemic broadened its probe into online lending this week to include two of the most prominent processors of coronavirus assistance.

Rep. James Clyburn, D-S.C., chairman of the Select Subcommittee on the Coronavirus Crisis, sent letters to Blueacorn and Womply on Tuesday requesting information about fraud prevention. Both emerged as major players that fused tech and financing to speed up lending through the government’s Paycheck Protection Program.

Womply had no lending experience before COVID-19 and Blueacorn did not exist, yet together the companies captured more than $3 billion in fees – eclipsing their direct competitors.

The startups are not banks but worked as middlemen, marketing to struggling businesses and quickly approving loans with partner banks, backed by the Small Business Administration. The companies make their money through a government-paid fee for facilitating the loans.