The Small Business Administration says that more than 340,000 applications have been received from borrowers for forgiveness of Paycheck Protection Program loans.
The loans of $150,000 or less were pushed out at the peak of the pandemic, as businesses and the economy was largely shut down.
With outstanding debt saddling millions of disadvantaged and underserved small businesses, increasing the rate of forgiveness to PPP borrowers will have an immediate effect in helping the smallest of small businesses recover from the pandemic and access other resources.
Before this if a business did not apply for forgiveness within 10 months of the end of the covered period- those businesses could have owed principal and interest payments on the loans.
“We are incredibly excited that in just two weeks, the Direct Borrower Forgiveness Portal is providing small businesses with a streamlined, user-friendly way to apply for forgiveness and receive relief on these essential PPP loans,” said Patrick Kelley, Associate Administrator for SBA’s Office of Capital Access. “Already, we’ve seen hundreds of thousands of borrowers navigating quickly and easily through the process, and we continue to proactively help borrowers apply through extensive outreach and webinar trainings. We encourage all lenders to opt-in to this tested portal.”
In the two weeks since the portal opened, the SBA has received over three times the number of submissions than the top 10 PPP lenders who are not participating in Direct Forgiveness, putting us on pace to close out forgiveness for the 3.4 million direct forgiveness borrowers by the end of the year. Currently, more than 1,230 PPP lenders, representing over 50% of outstanding loan forgiveness applications, have opted-in to the Direct Borrower Forgiveness Portal.
“The direct forgiveness platform has been very effective and efficient in processing applications from tens of thousands of our PPP borrowers already. This has been tremendously smooth for our borrowers, our institution, and for SBA,” said Chris Hurn, CEO of Fountainhead. “Our borrowers’ feedback has been universally positive about its ease of use in completing their applications within mere minutes. We’re very proud to have played a small part in helping make this a reality.”
Before direct forgiveness, borrowers had to take the initiative to download forgiveness forms or get forms from their banks to complete and submit. Some lenders had not yet built the technology or processes to even begin accepting forgiveness applications, and many did not actively reach out to borrowers to help them through the process. Forgiveness was not user-friendly, which is why millions of borrowers, including over 700,000 loans made in 2020, had yet to submit their one-page application.
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