August 10, 2020 is a red-letter day for the Paycheck Protection Program (PPP).
That’s the date the Small Business Administration (SBA) plans to launch its much-anticipated portal through which lenders will seek approval of their PPP-loan forgiveness decisions.
Accessing the Loan Forgiveness Portal
In a July 23 announcement, the agency said it plans to email instructions for using the portal to lenders before the launch. Lenders will then be able to electronically submit applications individually, or in batches using an application programming interface that will be made available on the portal.
The SBA said it is working with financial services technology provider Goldschmitt-CRI, a firm based near Washington, D.C., to provide the platform. Only PPP lenders will have access to the portal.
Lenders can use the platform to submit data and documentation, monitor the status of forgiveness requests and interact with the SBA in case of an inquiry or a loan review. PPP lenders registered in E-TRAN, the system the SBA used to accept the loan requests, will receive a welcome email from the agency with instructions on how to access the portal, according to the notice.
The centerpiece of the federal government’s small business relief efforts – and its goal to incentivize employers to keep workers on the payroll - the PPP has already guaranteed more than $520 billion in loans to nearly five million borrowers. The SBA initially released a PPP loan forgiveness application May 15, then updated the form, and finally released an “EZ version” for certain borrowers, about a month later.
Blanket Forgiveness Proposal
Keep in mind: A bill in Congress, the Paycheck Protection Small Business Forgiveness Act, proposes blanket forgiveness for loans of up to $150,000. The American Bankers Association, Bank Policy Institute and Consumer Bankers Association have jointly asked for blanket forgiveness for loans of up to $350,000. While PPP loan forgiveness is vitally important for both borrowers and their advisors, long-expected FAQs expected to clarify many PPP-related issues are still to come from the SBA and Treasury. In addition, the loan forgiveness application has not been updated to reflect the recent five-week extension of the program’s deadline to August 8, 2020.
As Congress debates a new round of COVID-19 relief, which is expected to include a second PPP initiative more targeted than the first one, major changes relaxing the forgiveness requirements for the smallest loans may be ahead. SBA and Treasury are not expected to release the expected 25 to 30 FAQs before President Trump signs new relief legislation.
Even if the FAQs do come out, the SBA said the platform’s opening date is subject to extension if legislators make changes to the process that affect the system.
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