SoftBank-Backed Lender Facing PPP Probes Goes Bankrupt (1)

SoftBank-backed small business loan servicer KServicing filed for bankruptcy after the company, which holds old loans made by online lender Kabbage, was weighed down by allegations of overly lax lending under the US government’s Paycheck Protection Program.

KServicing is in the process of winding down after Kabbage’s teams and technology were sold to American Express Co. about two years ago for around $750 million. KServicing’s business now mostly consists of servicing a $1.3 billion portfolio of Covid-era small business loans backstopped by the federal government, court papers show.

The company is focused on minimizing any impact the bankruptcy filing will ...