The Small Business Administration (SBA) has officially launched a streamlined Paycheck Protection Program (PPP) loan forgiveness portal.
The portal will allow small-business owners with loans of $150,000 or less to apply for forgiveness directly with the SBA. The SBA’s portal was announced earlier in July, as well as its efforts to allow small-business owners to bypass slow lenders.
The new portal will begin accepting applications on Aug. 4. Lenders will have to opt into the program.
More than 600 banks have opted in to direct forgiveness, affecting roughly 2.17 million borrowers. That’s about 30% of the loans of $150,000 or less that have not yet been submitted for forgiveness. However, that still represents just a small fraction of the almost 5,500 lenders that participated in the 2020 round of the PPP.
Lenders will still be involved in the process of loan forgiveness — as required by law — but small-business owners applying for forgiveness directly through the portal won’t interact with their lenders through it. The SBA will check those direct applications with lenders for their forgiveness decisions.
Speeding up the loan forgiveness process also helps the SBA, because the agency ultimately pays off the lender that made the PPP loan, plus any interest that accrues on the loan. It also could help lenders avoid the added costs of setting up their own separate portals and processes to expedite forgiveness.
The SBA also told lenders on July 9 it is officially withdrawing the use of a controversial PPP loan questionnaire that slowed the forgiveness process and made it much harder for larger PPP loans to get forgiveness. Read more about it here.
