More details have been released on the Paycheck Protection Program forgiveness portal by the SBA. The SBA is releasing a series of forgiveness portal user guides for lenders and some the biggest features are:
- Direct Forgiveness
This allows for borrowers to apply for loan forgiveness directly with the SBA instead of going through their original lender’s portal. This will only be available to business owners with loans that are $150,000 or less, which conveniently is about 95% of loans.
- Batch Uploads
This is going to be particularly helpful to lenders who have more than 500 loan forgiveness submissions as this will allow them to elect to use the SBA portal’s batch upload option.
- COVID Health Score
This is for borrowers who took out loans less than$150,000 in value. It basically allows for them to validate their losses and get a score based on their loss in revenue during COVID. However, if this score still doesn’t seem to help, businesses can upload proof that they had a minimum of 25% loss in revenue from 2019 to 2020.
How Does This Help Lenders:
Lenders play a few important parts in this as well. They would first need to opt-in to using the new SBA portal and then ultimately it is their decision on the forgiveness of each loan that they hold. In addition to that, it will still be the lender’s job to directly take care of loan forgiveness when loan amounts are above $150,000. Once a lender has received a loan forgiveness application they have 60 days to make their decision on it, after which the SBA would then have 90 to give the refund. If there is any issue with lack of paperwork or documentation, then the borrowers would be notified so they can gather all supporting information needed. Once approved, borrowers will be told what their loan forgiveness amount is.
Since the beginning of the pandemic, through the help of lenders, the SBA has given out over 11.8 million PPP loans which equate to $780 billion. With the SBA helping to make some of these loan refunds, it will free up lenders to be able to make other loans which is overall better for them financially as well as others looking to be new borrowers.
Too Little, Too Late?
This new portal can not do anything for PPP borrowers that had already applied for loan forgiveness previously. According to the PRAC (Pandemic Response Accountability Committee) which is a group of inspectors that are tracking general government relief spending, around 4 million loans have been forgiven since April 2020. This is about half of the total loans.
Some people are wondering why the SBA chose to launch the portal more than a year after the program started, and a couple months after borrowers began repaying PPP loans that had not been forgiven.
Bill Briggs is the former director of the SBA’s office of capital access, and he believes that timing of the new portal might actually have been intentional. He says the newest round of PPP loans in January 2021 were funneled through CFI’s (Community Financial Institutions) and other lenders that typically lacked resources for something so complicated as a forgiveness portal.
This most recent round of the PPP loan process had a goal of reaching small and underserved business owners in order to help them gain access to more capital. That is who CFI’s tend to focus on to help. So much so, that they have had exclusive access to early program launching.
Another reason for the SBA’s timing could be due to their attempt to get more control over the issue as the PPP process had gone to over 5,200 lenders. The SBA had attempted to plead with businesses about applying for loan forgiveness, but many individual lenders did not have operable forgiveness portals. Briggs says that overall, the SBA is just ready to put loan forgiveness behind them and move on to other things.
Interested in PPP loan forgiveness, but not sure where or how to start? We are here to help! Contact us for a quote and learn all of the services available to help you and your small business. We can be reached at 310-534-5577 or [email protected].
Find more information from the source of this article here: https://www.inc.com/diana-ransom/ppp-forgiveness-portal-sba-new-details.html?fbclid=IwAR0-IgIj-hmM-gm-k4Eh__VpjO_UghRif9XFbg48DZZ0fbcljQA2eu0bJ1Y
