Since launching in early April, the Paycheck Protection Program (PPP), a COVID-19 relief initiative in the United States that provides small businesses with forgivable loans, has been met with high levels of demand and uncertainty. One recent survey indicated that 75 percent of borrowers report being confused about the program.
“We’re looking to empower the lenders to really proactively serve their borrowers and their business clients.”
– Keren Moynihan, Boss Insights
To combat some of the confusion, one Canadian startup is stepping in to help. Boss Insights, a Toronto-based SaaS company, has repurposed its existing insights software to launch a new platform that helps lenders and borrowers navigate PPP loans.
The new platform, called Boss CARES, covers the application, monitoring, and forgiveness calculation of PPP loans. Borrowers can connect their accounting, financial, and payroll systems to Boss Insights’ platform, while lenders can see that information at the company and portfolio level.
With a connection to small business payroll data, Boss Insights is addressing compliance as well as the forgiveness component of the PPP loans.
On March 27, the United States signed the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act into law. The law is aimed at supporting small businesses through the current pandemic. One of the measures in the bill is the PPP, a nearly $660 billion USD program intended to provide American small businesses with eight weeks of cash-flow assistance through 100 percent federally-guaranteed loans.
Under the terms of the program, businesses have eight weeks from the day they receive the cash to spend it in order for the loan to be forgiven. However, the program has become muddled for many small businesses as the US federal government is continually updating existing guidelines and publishing new ones. It’s up to lenders, such as credit unions and community banks, to calculate a borrower’s forgiveness on the PPP loan.
“The calculation to get that up and running is so complicated, and we’ve automated it,” Boss Insights CEO Keren Moynihan told BetaKit.
“Before COVID, there were 15,000 financial institutions lending 15,000 different ways. Now, there are over 5,400 [financial institutions] lending in one way. [It is] the equivalent of a financial flash mob,” she added.
Founded in 2017, Boss Insights aggregates real-time data on companies and provides insights for startups, accelerators, and investors. Moynihan told BetaKit the first version of Boss CARES was spun up in only four days. Since then, the US government has issued many changes, and Moynihan said Boss Insights adopted them within the week they are issued.
“We’re looking to empower the lenders to really proactively serve their borrowers and their business clients, and so switching from a regular platform to PPP [was] easy,” Moynihan told BetaKit.
“I just hope that it can inspire maybe people in Canada to consider us too.”
The Boss CARES platform launched in late April with computer technology corporation Oracle. Boss Insight’s platform includes a portal that the borrower and lender can access, and gathers data from various sources automatically to verify ongoing monitoring and forgiveness eligibility.
“I just hope that it can inspire maybe people in Canada to consider us too,” Moynihan added. The CEO noted that Boss Insights felt it needed to take the approach of finding success outside of Canada before being able to scale nationally.
Boss Insights is currently in the process of raising a $2.8 million CAD seed round, 30 percent of which is currently subscribed, Moynihan told BetaKit. She said the round has already secured debt funding from Business Development Bank of Canada, and that there are also several US investors locked in, that are waiting for a lead investor.
Moynihan said she thinks Canada has believed in the company from a grant perspective, but not a market perspective. Many members of Canada’s tech community have cited the country’s tight regulatory environment as one of the key inhibiting factors for FinTech adoption. A 2019 report from Ernst & Young found that FinTech adoption in Canada still lags behind the global average.
Koho CEO Daniel Eberhard expressed to BetaKit earlier last year that the regulatory environment in Canada has made it much more difficult to succeed as a Fintech startup, as regulators have prioritized managing risk over fostering a competitive environment.
Moynihan said Canadian banks lack the “systematic ability” to drive FinTech adoption in Canada, however, Boss Insights is currently in talks with a major Canadian bank.
“I hope that the spirit of collaboration continues after COVID,” Moynihan said. “It’s the necessity that’s making things work in this way. We’re all sort of banding together to find a common goal.”
Image courtesy Boss Insights.