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The portal will allow small business owners with up to $ 150,000 in loans to apply for forgiveness directly to the SBA.
“The new streamlined SBA Application Portal will make it easier to forgive millions of our smallest businesses, including many sole proprietors, who have used our payroll protection loan to weather the pandemic,” SBA Administrator Isabelle Casillas Guzmán said in a press release. “The vast majority of businesses awaiting forgiveness have loans of up to $ 150,000. These entrepreneurs are preoccupied with their businesses and face an overly difficult process of forgiveness. We need to more effectively offer forgiveness so that they can return to revitalizing our main streets, sustaining our neighborhoods, and fueling our country’s economy. ”
The new portal will start accepting applications on 4 August. Lenders will be required to participate in this program, what can they do here.
To date, more than 600 banks have opted for direct forgiveness, according to the SBA, affecting approximately 2.17 million borrowers, or about 30% of loans of $ 150,000 or less that have not yet been forgiven. But that still represents only a small fraction of the roughly 5,467 lenders who participated in the 2020 PPP round, according to the agency.
“This initiative will allow PPP borrowers to leave their concerns about achieving full forgiveness behind and to focus again on operating and growing their business,” said Patrick Kelly, Assistant Administrator, Capital Access Office, SBA. “We are delighted to be able to assist financial institutions in the United States with processing pardons for small business owners.”
To be clear, lenders will still be involved in the loan forgiveness process – as required by law – but small business owners applying for forgiveness directly through the portal will not interact with their lender through it. The SBA will check these direct claims with lenders for their forgiveness decision, but uses the back end of the platform instead.…
Speeding up the loan forgiveness process also helps the SBA because the agency ultimately pays the lender who made the PPP loan, plus any interest charged on the loan. It can also help lenders avoid the additional cost of creating their own separate portals and processes to expedite forgiveness.
Meanwhile, the SBA is still making changes to the process. The SBA told lenders on July 9 that it was officially phasing out the controversial PPP loan questionnaire, which critics said slowed down the forgiveness process and made it much harder to get forgiveness for larger PPP loans – something Business magazines reported in June.
The “Loan Requirement Questionnaire,” which was deployed in November, focused on the “good faith” evidence that companies were required to provide when applying for a PPP loan of $ 2 million or more, but required substantial documentation of whether what the companies subsequently did after receiving the loan, among other things. The AGC ultimately sued the SBA, claiming that the questionnaire was developed in secret and without public participation.