New programs should simplify, speed up PPP forgiveness process
Two recently launched programs by the Small Business Administration (SBA) should ease the Paycheck Protection Program (PPP) forgiveness process, CUNA wrote to the House Small Business Committee Wednesday. Credit unions facilitated more than 200,000 PPP loans that averaged $47,000.
“The SBA has issued thirty interim final rules addressing PPP, creating a program whose rules of operation are under constant flux. Although somewhat unavoidable given the speed of development and implementation of PPP, this has created a significant burden for credit unions,” the letter reads. “Credit unions’ desire is to help their member businesses that have outstanding PPP loans apply and receive forgiveness for these loans, which provides maximum relief as was intended by Congress.”
The most recent final rule introduced a COVID Revenue Reduction Score that can be used at the time of forgiveness to document the required revenue reduction for second-draw PPP loans of $150,000 or less where the borrower did not provide documentation of revenue reduction at the time of the loan application.
The SBA also launched in August a direct borrower forgiveness process to provide PPP lenders with the technology platform to allow their borrowers to apply for loan forgiveness for loans of $150,000 or less directly to the SBA. The platform will provide a single secure location for its borrowers with PPP loans of $150,000 or less to apply for loan forgiveness when a lender opts-in to the direct borrower forgiveness process.
“Credit unions hope that these two new programs simplify and speed up the PPP forgiveness process,” the letter reads. “As you continue your work to provide relief to small businesses and communities around the country, we encourage the Committee to explore the effectiveness of recent changes to the program.”