The Small Business Administration officially opened its Paycheck Protection Program loan forgiveness portal to lenders Aug. 10. And of the 5.2 million loans approved under the program, the agency has received only 56,000 forgiveness determinations from lenders so far.
That number, from a Government Accountability Office report published Monday with data through Sept. 8, shows just how slow the process may be for the SBA and bank lenders to wade through the millions of PPP loans approved before the program expired Aug. 8. Thus far, a little more than 1% of approved loans have resulted in formal forgiveness requests by a lender through the first week of September, Washington Business Journal reports.
However, the GAO report doesn’t offer any information on whether the SBA has begun processing or has approved any of the forgiveness determinations from lenders. The SBA declined to provide that information after repeated requests. Per the GAO report, the agency was still developing its review and oversight process for PPP loan forgiveness as of Aug. 14.
Ultimately, the PPP loan forgiveness process requires the small business to fill out an application and submit it to the lender, which then has 60 days to render its decision. That decision is then sent to the SBA, which has 90 days to process and finalize the application and reimburse the bank for the loan. There is also an appeals and review process, should either party disagree with the SBA’s or bank’s findings, and that could take years to play out.
Some of the biggest PPP lenders say they will not share information on the number of PPP forgiveness applications they have processed, or whether any of their customers have been granted loan forgiveness. Banking giant Bank of America Corp., which approved 343,626 PPP loans, the second-largest number behind JPMorgan Chase, says it has begun accepting loan forgiveness applications, but would not share figures.
The lack of clear data, as well as the small number of lender decisions sent thus far to the SBA, shows a tenuous PPP forgiveness process, one that got a delayed start given that the five largest lenders did not begin accepting applications on the day the SBA opened its forgiveness portal. Read the full story.
