Loan Forgiveness Portal Opened by the Small Business Administration for PPP Loans
On August 10, 2020, the Small Business Administration (“SBA”) opened its Paycheck Protection Program (“PPP”) loan forgiveness portal to lenders. However, many businesses will have to wait several more weeks or months for their much anticipated loan forgiveness because many lenders do not yet plan to begin processing forgiveness applications. The postponement of forgiveness application processing is because of the possibility for changes in SBA guidance and additional legislation, including possible legislation providing for automatic forgiveness for small loans (under $150,000) and an easier process for mid-size loans (under $2 million).
As recently as August 4, 2020, the SBA published FAQs which address loan forgiveness questions from borrowers and lenders. The FAQs addresses general questions, such as which applications sole proprietors and self-employed individuals are to use, as well as specific questions relating to the various calculations required to be made in determining the forgiveness amount or the reduction thereof.
Any additional guidance with respect to submitting applications and step-by-step instructions for submissions will be published in the portal. The portal is available only to PPP lenders, who will be responsible for notifying borrowers of any SBA inquiries, rejections, or forgiven amounts. Lenders will use the portal to submit loan forgiveness decisions, supporting documentation and requests for forgiveness payments. The portal will also be the means for lenders and SBA communications, such as responding to SBA inquiries. The portal will also permit lenders to track the status of the forgiveness request.
Although many businesses are eager to have their loans forgiven, the longer lenders wait, the less surprises both lenders and borrowers will face in the loan forgiveness process.
The FAQs can be accessed here.