From the beginning, the Small Business Administration (SBA) has struggled with making the Paycheck Protection Program (PPP) process easy for borrowers to navigate. One confusing question has been do businesses work through the SBA or through their lender to secure forgiveness? A new portal launched on August 4th by the SBA targets borrowers with loans up to $150,000 and allows them to apply for forgiveness directly with SBA, hopefully ending some of the confusion and simplifying the process.
Though the 2020 Economic Aid Act simplified the loan forgiveness application process for those with loans less than $150,000, the unexpected uptick in applications overwhelmed lenders’ systems. This led to a “chicken-or-the-egg” scenario where borrowers feared they would have to begin repaying the loan before forgiveness was decided.
In response to the confusion, the inundated lenders, and comments and concerns from businesses, the SBA created a portal that aligns and integrates the loan forgiveness process for borrowers and lenders. Now, banks that opt-in to participating provide a one-stop online location for borrowers with less than $150,000 in loans to apply for forgiveness within this SBA-driven platform. Lenders get to review the application and issue decisions within the same platform. This should reduce waiting time and eliminate confusion of where to apply.
“The SBA’s new streamlined application portal will simplify forgiveness for millions of our smallest businesses -- including many sole proprietors -- who used funds from our Paycheck Protection Program loans to survive the pandemic,” said Administrator Isabel Casillas Guzman. “The vast majority of businesses waiting for forgiveness have loans under $150,000. These entrepreneurs are busy running their businesses and are challenged by an overly complicated forgiveness process. We need to deliver forgiveness more efficiently so they can get back to enlivening our Main Streets, sustaining our neighborhoods, and fueling our nation’s economy.”
Some PPP lenders are opting not to participate in this portal, particularly those who have already created their own portals or are in the process of doing so. PPP borrowers should check to see if their lender has opted in on this list provided by the SBA. For more information, visit the PPP direct forgiveness portal at https://directforgiveness.sba.gov/.
We will continue providing PPP updates when significant relevant information becomes available. If you have questions about how to navigate the PPP Forgiveness Application process, or how other CARES Act incentives may apply to your business, please call on us. You can stay up to date on PPP guidance and tax issues relating to the coronavirus at our COVID-19 Tax Resource Center.