How Much Did Itria Ventures Make From Pandemic Relief?

I. $473 million, and no outside cut

Biz2Credit is private, and neither it nor Itria has published what the PPP paid them. So the answer has to be modeled, as it was for Womply's fees: every Itria loan in the SBA's loan file, priced under the fee rule in force when it was made.

Question	Figure	Source	Kind
What did the SBA owe Itria on its 2020 loans?	$5.8 million on 3,094 loans	SBA loan-level data, priced loan by loan	modeled
On its 2021 first-draw loans?	$321.6 million on 129,177 loans	SBA loan-level data	modeled
On its 2021 second-draw loans?	$146.0 million on 40,560 loans	SBA loan-level data	modeled
What did outside researchers estimate?	$488.8 million on 177,790 loans, from an earlier release of the SBA data	Griffin, Kruger and Mahajan, working paper, Dec. 6, 2021	study estimate
What did Biz2Credit or Itria report?	no fee figure in any release or filing we found	company releases, 2020 to 2024	company
What did the group pay out, on the record?	a $33 million judgment in favor of the FTC	stipulated order, March 20, 2024	court record

The three modeled amounts add to $473.4 million, 17th among the 4,688 lenders in the SBA file (PPP lenders by estimated fees). By loan count Itria ranks 14th; by dollars, 23rd (lender page).

The series ranking of fee collectors adds agents and contractors and ranks each on its fees after documented payments to agents. There Itria is 11th, behind Womply, ranked on its billings of $1.8 billion to $2.6 billion and covered in its own piece, JPMorgan Chase, Bank of America, Blueacorn, Cross River Bank, Wells Fargo, PNC, Truist, U.S. Bank and TD Bank. Of the ten collectors in the series, it is the only nonbank lender. Eight lenders with larger modeled fees fall below it. Six of them, Prestamos CDFI, Harvest Small Business Finance, Capital Plus Financial, Benworth Capital, Fountainhead and Lendistry, paid part of their fees to Womply or Blueacorn; the ranking subtracts those payments, or uses the lender's own figure for what it retained. Customers Bank's own proxy statement gives a smaller figure than the model, and a third of the loans filed under M&T's name were made by People's United.

Itria paid no outside platform that any record shows. Its borrowers came from its parent, and how the two companies divided the money is not public. The $473.4 million is fees owed, before the cost of the staff and systems that processed the loans, which neither company has disclosed. It leaves out the interest spread described in section III.

II. What the 2021 rule paid for

The SBA paid the lender of record a processing fee on every PPP loan and guaranteed the loan in full. For 2020 loans the fee was 5 percent up to $350,000, 3 percent up to $2 million and 1 percent above that (85 FR 20811). For 2021 loans of $50,000 or less it became the lesser of 50 percent of the loan or $2,500 (86 FR 3692; 86 FR 3712). Above $5,000, the fee stopped growing with the loan.

Say a self-employed barber with no employees reported $100,000 of net profit for 2019. The most she could borrow was two and a half months of it, $20,833. Had she borrowed in 2020, the SBA would have paid her lender 5 percent, $1,042. In 2021 it paid $2,500, 12 percent of the loan.

That loan is the one Itria made most. Its four most common loan amounts are $20,833.33, $20,833, $20,000 and $20,832.50. In all, 38,033 Itria loans, 22.0 percent of its book, were for between $20,832 and $20,834, and they carried $95.1 million in modeled fees. Across the program, 11.8 percent of loans fall in that range. At Harvest, which took Womply's borrowers, the share is 39.5 percent; at Cross River Bank, 16.8 percent; at JPMorgan Chase, 3.7 percent.

Itria loans by size	Loans	Share of loans	Modeled fees	Share of fees	Fees per dollar lent
$5,000 or less	17,110	9.9%	$26.3M	5.6%	48.9¢
$5,000 to $50,000	143,528	83.0%	$355.3M	75.1%	13.6¢
$50,000 to $350,000	10,981	6.4%	$65.3M	13.8%	5.0¢
Over $350,000	1,212	0.7%	$26.4M	5.6%	2.9¢

Each of the 141,338 Itria loans made in 2021 for between $5,000 and $50,000 carried the flat $2,500: $353.3 million, 74.6 percent of Itria's modeled fees. Program-wide, 39.9 percent of PPP loans got the flat fee.

Itria's whole book came to 9.7 cents in modeled fees per dollar lent. The program averaged 4.8 cents, JPMorgan Chase 4.1 and Cross River 8.0. The lenders that funded Womply's and Blueacorn's borrowers ran higher, from 12.2 cents at Harvest to 16.5 at Benworth. Priced on the 2020 schedule, Itria's loans would have paid $223.9 million. The 2021 rule added $249.5 million.

Itria made 98 percent of its loans in 2021, and 92,741, more than half its book, were approved in February 2021 alone. That month's loans carry $249.3 million in modeled fees.

III. A platform, a lender and the Fed, under one roof

Womply found borrowers and sent them to lenders that paid it out of their fees. Blueacorn did the same for Prestamos and Capital Plus. Biz2Credit found borrowers for its own subsidiary.

In April 2020 Biz2Credit's PPP page took applications under the line "Biz2Credit is not a lender" (Biz2Credit PPP page, April 7, 2020). On May 4 it announced that its "funding affiliate was approved last Friday" as a PPP lender and estimated "upwards of $1.5 billion in demand for PPP loans from its customers" (Biz2Credit, May 4, 2020). The first Itria loan in the SBA file was approved on May 2. Biz2Credit also paid a lobbyist. Kasowitz's report for July through September 2020 lists $54,315 in income from Biz2Credit and the issue "Assist with key CARES Act provisions, SBA lender application, and Paycheck Protection Program" (lobbying report).

Applications arrived through Biz2Credit's own site, through payroll companies and through accountants. Paychex described a "Biz2Credit Integration" that let Biz2Credit "obtain required payroll data for the loan application form from Paychex Flex" (Paychex 10-Q, quarter ended Feb. 28, 2021). A portal built for CPA firms listed "Payment of agent fees for firms registered for one of the paid plans" (AICPA, CPA.com and Biz2Credit, Dec. 14, 2020). The SBA's rule let a lender pay an agent out of its own fee, and courts held that agents could not collect without an agreement with the lender (The Agents Got Nothing).

One agent's suit shows the arrangement from the other side. Lydia Smith, a consultant, alleged that she paid Biz2Credit a $1,499 subscription to use its portal, that 111 of her clients' applications were funded, and that Biz2Credit owed her $62,211.98 in agent fees, about $560 a loan (complaint, Smith v. Biz2Credit, Inc., S.D. Fla. No. 9:21-cv-82532, Dec. 22, 2021). The docket closed on January 31, 2022; we found no ruling on the claim.

The software went to competitors too. Fountainhead, one of Womply's lenders, licensed Biz2Credit's Biz2X platform in January 2021 "for handling first and second draw PPP loans" (Fountainhead release, Jan. 8, 2021). The license fee is not public.

Itria is a licensed finance company, and it borrowed against its loans from the Federal Reserve. The Fed's PPP Liquidity Facility lent against PPP loans at 0.35 percent. By June 30, 2021, it had made 192 advances to Itria totaling $4.90 billion, and $4.76 billion was still outstanding (Federal Reserve PPPLF disclosures, July 13, 2021). Itria's PPP book was $4.87 billion. Borrowers paid 1 percent interest, so at that balance the spread came to about $31 million a year before servicing costs. That is our arithmetic, and it is not in the $473.4 million.

IV. February 2021, and the FTC's $33 million

The SBA's report on approvals through February 15, 2021 ranked Itria third among lenders in the new round by dollars, with $3.51 billion, behind JPMorgan Chase and Bank of America. By count it was first: 118,355 loans, against 57,458 for JPMorgan and 66,666 for Bank of America, or 7.1 percent of all loans approved in the round to that date (SBA PPP report, Feb. 15, 2021). The final SBA file lists 82,026 Itria loans approved from January 1 through February 15. Loans cancelled after approval drop out of that file.

The Federal Trade Commission sued Biz2Credit and Itria on March 18, 2024 (complaint). The complaint alleges that the companies accepted "over 500,000 applications in the first 5 months" of 2021 while the website said "Average processing time: 12-14 business days." Final decisions took 25 business days on average, it alleges, and "roughly 40%" of applicants had their applications cancelled or rejected. Internal emails in mid-February, the complaint says, read "[w]e are drinking from the SBA firehose and our backlog is increasing every day." The companies stopped taking applications for a weekend, then decided to "open the application intake" again. Soon after, it says, the SBA flagged Biz2Credit for an "elevated number of loans in undisbursed status."

The complaint also explains why a slow queue trapped borrowers. Once the SBA assigned an application an e-tran number, the borrower could not apply through another lender unless the first one withdrew it. Internal emails, the FTC alleges, proposed an application process that let the companies "block the user's E-Tran number quickly," before underwriting. The rule paid a fee only on a funded loan and charged nothing for holding an application.

Biz2Credit and Itria settled without admitting liability. The stipulated order, entered March 20, 2024, imposed a $33 million judgment, jointly and severally, and barred misrepresenting processing times. It also required the companies to let applicants withdraw. The $33 million is about 7 percent of the modeled fees. The FTC announced it with Womply's $26 million settlement as "the largest damages amounts ever secured by the agency under Section 19 of the FTC Act" (FTC, March 18, 2024). The order lets the FTC put the money in a fund for consumer relief. We found no announcement of refunds.

V. What the watchdogs found

The House Select Subcommittee on the Coronavirus Crisis published its report on fintechs and PPP fraud on December 1, 2022. It does not mention Biz2Credit or Itria (We Are Not the Fraud Police). The Subcommittee requested documents from Kabbage, Bluevine, Cross River and Celtic Bank in May 2021. In November it added Blueacorn and Womply "after researchers at McCombs School of Business at the University of Texas issued a study." It also obtained information from Harvest, Capital Plus, Prestamos, American Express, Fountainhead, Benworth, Wells Fargo, Bank of America and CDC Small Business Finance.

That study's December 2021 version puts Itria in two of its findings. It is one of the ten lenders, all fintechs, whose borrowers' PPP job counts most often fell at least three short of the counts implied by their disaster-loan advances, on 12.8 to 54.6 percent of loans. It is also in the top ten for three of the study's four indicators of possible misreporting. The authors thanked Itria Ventures, among others, for comments (Griffin, Kruger and Mahajan, "Did FinTech Lenders Facilitate PPP Fraud?", Dec. 6, 2021).

The SBA's file shows 18,923 Itria loans, 10.9 percent, charged off, for $434.7 million. For the whole program the rate is 5.6 percent. Neither rate adjusts for loan size or borrower type. The modeled fees on those charged-off loans come to $49.2 million.

We found no criminal charge, False Claims Act suit or settlement against Biz2Credit, Itria or their officers in CourtListener's federal dockets or Justice Department releases. Borrowers who lied to Itria have been prosecuted. In Oregon, a woman who used a shell cleaning company to get nearly $49,000 from Itria in February 2021 pleaded guilty to wire fraud and agreed to pay $51,457 in restitution "to Itria and SBA" (Justice Department, April 19, 2022).

The one state order we found predates the program. In March 2020, six weeks before its SBA approval, Itria signed a consent order with California's Department of Business Oversight. The department had revoked Itria's California lending license, effective December 30, 2019, because Itria had not paid its annual assessment. The order rescinded the revocation, required the $250 assessment and imposed $3,000 in fines and penalties (consent order).

VI. What Biz2Credit said

"The largest provider of approved PPP loans" (Biz2Credit, Feb. 23, 2021). The release cited SBA data as of February 21 and 139,559 approvals. By count the SBA's February 15 report agrees; by dollars Itria was third.

"Almost twice as many approvals vs the nation's two largest banks" (Rohit Arora, the same day). Against the February 15 figures, Itria had 2.1 times JPMorgan's count and 1.8 times Bank of America's.

"98% of Biz2Credit's approvals have gone to firms with fewer than 20 employees" (the same release). In the final file, 98.0 percent of Itria's loans report fewer than 20 jobs, and the median loan reports one.

"Has arranged more than $3 billion in small business financing," since 2007 (Biz2Credit's release boilerplate, May 2020 through April 2021; example). By March 2024 the boilerplate read "more than $8 billion." Itria's PPP loans came to $4.87 billion.

"The company funded only around 30% of all the applications it received in 2021" (Biz2Credit's statement on the FTC settlement, Business Wire, March 18, 2024). The company offered that as evidence of fraud screening; the FTC counted roughly 40 percent of applicants cancelled or rejected. The same statement said that "PPP lenders like Biz2Credit made money only when they funded applications."

Itria funded 172,831. On 141,338 of them, the SBA's fee was $2,500.

Method, and what would change the numbers

Modeled fees. Each loan in the SBA's PPP loan-level file (release of September 30, 2024) is priced under the fee rule for its approval date and draw, and counted by approval year. The model assumes the SBA paid a fee on every loan in the file. Fees on loans later cancelled or reduced may not have been paid in full, so the figures are fees owed, not received. The comparison figures for other lenders use the same model and file.

Loan amounts. Size bands use the loan's current approved amount. The $20,833 ceiling is two and a half months of $100,000 in annual income, the cap on the income a self-employed borrower could count.

Our arithmetic. The 2020-schedule counterfactual reprices every 2021 Itria loan at 5, 3 and 1 percent. The PPPLF spread is 0.65 percentage points on the $4.76 billion outstanding at June 30, 2021, for one year; the balance fell as loans were forgiven.

What is not public. Biz2Credit's and Itria's financial statements; the split of fees between them; what the group paid payroll partners, accountants and other referral sources; Biz2X's license fees from other PPP lenders; and whether the FTC has distributed the $33 million.

Sources: SBA PPP loan-level data (Sept. 30, 2024), priced under 85 FR 20811, 86 FR 3692 and 86 FR 3712 (Itria Ventures lender page; PPP lenders by estimated fees; PPP fee schedules by vintage; PPP per-lender totals); SBA PPP report, approvals through Feb. 15, 2021; Federal Reserve PPPLF transaction-specific disclosures, July 13, 2021; FTC v. Biz2Credit, Inc. and Itria Ventures LLC, S.D.N.Y. No. 1:24-cv-02001 (complaint, stipulated order); FTC press release, March 18, 2024; Biz2Credit, "Biz2Credit Issues Statement on FTC Settlement," Business Wire, March 18, 2024; Smith v. Biz2Credit, Inc., S.D. Fla. No. 9:21-cv-82532, complaint (Dec. 22, 2021); House Select Subcommittee on the Coronavirus Crisis, We Are Not the Fraud Police (Dec. 1, 2022); John M. Griffin, Samuel Kruger and Prateek Mahajan, "Did FinTech Lenders Facilitate PPP Fraud?" (working paper, Dec. 6, 2021); Biz2Credit releases of May 4, 2020, Dec. 14, 2020, Feb. 23, 2021 and April 27, 2021; Biz2Credit PPP page, April 7, 2020; Fountainhead release, Jan. 8, 2021; Paychex Form 10-Q, quarter ended Feb. 28, 2021; Kasowitz LLP lobbying report for Biz2Credit, third quarter 2020; Justice Department, District of Oregon, April 19, 2022; California Department of Business Oversight consent order, March 2020. Related: Biz2Credit profile; How Much Did Womply Make From Pandemic Relief?; The Agents Got Nothing The House report is a partisan staff document released by the Democratic majority's staff in the final weeks of the 117th Congress, with no public hearing and no sworn testimony; an arbitrator refused it as "rank hearsay" that relied on companies then in arbitration with Womply, and a federal judge declined to take judicial notice of its findings (about the report).