SBA and Treasury unveil simplified PPP remittance documents
The Small Business Administration (SBA) and the Treasury Department launched a simplified version of his forgiveness request for Paycheck Protection Program (P3) loans of $ 50,000 or less in an effort to ease the burden on lenders and small businesses.
From the origin Request for 11 pages was released on May 15, P3 participants complained that the forgiveness portion of the federal aid program is too onerous and places significant resource constraints on banks and small businesses. Professional banking groups have welcomed the new two page form but continue their pressure for other measures of Congress.
- “We are committed to making the PPP forgiveness process as easy as possible while protecting against fraud and embezzlement,” Treasury Secretary Steven Mnuchin said in a statement Thursday. “We continue to favor additional legislation to further simplify the pardon process.”
The streamlined forgiveness process will affect 3.57 million of the 5.2 million loans made under the program, which aimed to help small businesses overcome economic hardships caused by the coronavirus pandemic, according to the SBA.
About $ 62 billion of the $ 525 billion in PPP loans that have been made total $ 50,000 or less, the SBA said.
“It will make a big difference to the industry as a whole, but it will vary from bank to bank,” said Bill Byrnes, managing director specializing in risk and compliance at Protiviti, a global consulting firm. “In fact, this translates to a more streamlined process for lenders on over 68% of all loans issued.
“Lenders will still have the burden of receiving up to 5.2 million claims that they need to process, but the level of work that needs to be done is drastically reduced for up to 3.57 million of those claims,” he said. he declared.
The new directions will affect half of the PPP loans processed by First Resource Bank, a community bank that operates in Pennsylvania.
“At the start of PPP forgiveness, borrowers sent us hundreds of pages of documents to substantiate their forgiveness request, which was totally over the top,” said Lauren Ranalli, president and chief financial officer of First Resource Bank.
The streamlined process will help small businesses, Ranalli said.
“This will provide much needed help to smaller borrowers to allow them to focus on running their business,” she said. “This streamlined process will help the SBA process millions of PPP pardon requests that would otherwise have unnecessarily slowed down the process for all lenders and borrowers.”
Trade groups credited the SBA with making the changes, but called on Congress to take further action.
Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey reiterated her organization’s call for a higher automatic forgiveness threshold.
“To ensure that small businesses and community banks can focus their resources on economic recovery, Congress should immediately pass legislation to make it easier to cancel loans of $ 150,000 or less,” she said. said in a press release.
The Consumer Bankers Association (CBA) and the Bank Policy Institute (BPI) asked Congress in June to pass a law automatically canceling PPP loans of $ 150,000 or less.
“This threshold would represent 85 percent of total PPP recipients, but less than 26 percent of PPP loan dollars,” the groups wrote.
CBA President and CEO Richard Hunt has said he appreciates the SBA’s new streamlined process, but said the measure does not go far enough.
“[I]It is obvious that congressional action is needed for the real streamlined forgiveness that mom-and-pop businesses need, ”he said.