Update on SBA Loan ForgivenessJuly 28, 2021
Later this week, the Small Business Administration (SBA) will push to accelerate the end of the nearly $1 trillion Paycheck Protection Program (PPP) by making it easier for businesses to get their loans forgiven by launching a loan forgiveness portal.
The SBA plans to launch a PPP Portal that should speed up decisions on whether the still-outstanding loans will be forgiven or if businesses will need to repay them. At present, there are 7.8 million loans remaining, worth a total of $385.4 billion.
Rather than having to apply for forgiveness with their lender, many PPP recipients will now be able to work directly with the SBA. This will apply to loans of $150,000 or less, which make up 90 percent of PPP funds distributed.
Additionally, borrowers who received a second loan (worth under $150,000) this year will no longer have to supply documentation showing they suffered a 25 percent revenue reduction in 2020. The SBA will instead determine eligibility using other factors. The SBA has told lenders that it is using a combination of data sets to make the determinations, including information based on foot traffic and credit card charging.
The SBA has already notified banks — which were responsible for issuing the government-backed loans and processing forgiveness requests — that the agency is setting up its own online, consumer-facing forgiveness platform.
Rather than forcing borrowers to apply through banks, the SBA forgiveness site will accept applications—beginning on August 4—from small borrowers directly in a format that officials estimate will take businesses just a few minutes to complete. Lenders will still have a say in whether individual PPP loans should be forgiven, but the intent is to reduce the amount of time and effort that banks have to invest in the process.