SBA to Open Lender Portal for PPP Loan Forgiveness Applications
For many bankers and business owners, one of the most important pending pieces of business right now is the matter of Payroll Protection Program (PPP) loan forgiveness. If a business can meet conditions outlined by the U.S. Small Business Administration (SBA), the PPP loans can be partially or fully forgiven.
On Monday, the SBA announced that it would be opening an online portal set to open on Aug. 10 for lenders to submit loan forgiveness applications and materials. While many details still need to be sorted out, bankers see this as good news.
“We now have an avenue to at least submit that to the SBA,” said Kim Storey, senior vice president and SBA lending manager for St. Michael-based Highland Bank.
But bankers are still waiting for further guidance from the SBA on a number of issues.
“Between what I would describe as policy issues and technical fixes there are at least 25 items [where] the industry has asked for better guidance,” said Troy Rosenbrook, president of Highland Bank.
Some of those issues are no small matter for PPP borrowers.
“For example…if a business uses the 24-week coverage period and they are able to spend their funds in 12 weeks, we know they can submit their application, but do they have to maintain the same number of fulltime employees for the full 24 weeks? Or is it just 12 weeks? Or is it the date that their application is signed? Or is it the date that they actually get forgiven? That’s a big question for a lot of these companies,” said Storey.
“That’s what these business owners are struggling with,” said Storey. “You want to know what your requirements are to get total forgiveness on these loans.”
Lenders will make recommendations to the SBA on loan forgiveness.
“We go through this with a borrower and arrive at a number, whether it’s 50 percent or 100 percent or whatever the number is, and then that gets submitted to the SBA,” said Rosenbrook. “We have 60 days to submit the information once it’s completed to us and they have 90 days from that date to concur.”
Theoretically that means that the forgiveness process could take as long as five months. But Rosenbrook is expecting it to move more quickly.
“We’re not anticipating taking 60 days generally speaking and I would hope that the SBA is not anticipating 90 days,” said Rosenbrook.
As of July 24, Minnesota businesses had landed $11.2 billion through 99,640 PPP loans.
In Washington D.C., Congressional debate continues on another coronavirus stimulus package. No one knows yet what will emerge from that battle, but Rosenbrook noted that it could potentially delay the opening of the portal.
“If some of the rules change, I could see that delaying the portal opening if Congress passes a new version of the CARES Act which changes the rules,” said Rosenbrook.