P.P.P. loan forgiveness portal opens, but big banks opt out.
In an effort to speed up the cancellation of Paycheck Protection Program loans, the government on Wednesday opened an online portal through which small businesses that have borrowed up to $ 150,000 can request their loans be canceled. .
The Small Business Administration, which administers the program, hopes the new system will streamline the process for both borrowers and for the program’s nearly 5,500 lenders, who have collectively made $ 11.8 million in government-guaranteed loans for a total of $ 800 billion between April 2020 and May 2021. So far. , each lender had to set up its own process for collecting loan forgiveness requests and sending them to the SBA for approval.
The new system “will make forgiveness easier for millions of our smallest businesses,” said Isabel Casillas Guzman, director of the agency. About 92 percent of the program’s loans fall below the portal’s $ 150,000 limit.
But there is a sticking point: lenders must also agree to use the portal, otherwise the service will not work for the borrower. So far, around 900 lenders have signed up, but many of the program’s biggest lenders, especially the big banks, disagree.
Several lenders have said they prefer to stick with their own processes, fearing that directing clients to the SBA portal could be confusing. Banks are also reluctant to rely on an agency that has struggled throughout the pandemic with buggy and overloaded technological systems.
Many lenders “tested the capabilities of the portal during its first launch period and provided positive feedback,” said Matthew Coleman, spokesperson for the agency.
JPMorgan Chase, the program’s biggest lender, said it was “too early to say” if he would participate in the portal. “We are evaluating all aspects of the process and in the meantime continue to encourage our clients to request forgiveness through our platform,” said Elizabeth Seymour, a spokesperson for the bank. Bank of America is also not participating at this time, a spokesperson for the bank said.
A few major lenders, however, are enthusiastic. Adam Seery, chief operating officer of Harvest Small Business Finance, said his company hopes to use the new portal to process forgiveness requests for most of the 430,000 loans it has made this year.
“So far this has been a great success and it will save months of processing time,” he said of the tests Harvest has carried out over the past few weeks. Harvest has submitted its first batch of around 30 applications this week and is hopeful that those loans will be canceled soon.
Almost 80% of the 5 million PPP loans granted last year have been totally or partially canceled, according to the latest data from the agency, but very few borrowers this year have started the process. Most have until next year to apologize before they have to start repaying their loans.
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