With the passing of the CARES Act, 30 million small businesses employing nearly 59 million people will receive $350 billion in emergency funding to help mitigate the financial impact of COVID-19. However, the process is largely manual and will require 20,000 hours of in-person assessment. Some estimates indicate that the Small Business Administration (SBA) would need to increase productivity by 80 times to disburse these funds.
In an effort to expedite the distribution of this critical funding, our portfolio company Alliance for Innovative Regulation (AIR) hosted a virtual hackathon with more than 60 participants from 21 fintech companies. Participants built application prototypes to demonstrate how technology can improve efficiencies for onboarding, verification, underwriting, and distribution of funds. Jo Ann Barefoot, cofounder and CEO of AIR, stated, “this time lag will likely become the death knell for America’s small businesses. What’s needed here is a moonshot approach to help automate and simplify the loan application process to get emergency relief in the hands of small business owners as fast as possible.”
Read more about their efforts here.