About 2 million business owners who took out loans through the Paycheck Protection Program will soon be able to apply for loan forgiveness directly through the Small Business Administration (SBA) rather than their banks.
The direct forgiveness portal is open to borrowers with loans of $150,000 or lower.
This is a departure from the Trump administration’s policy of having banks act as the go-between for the SBA and borrowers. The SBA designed the offering to streamline the process and take pressure off smaller lenders.
The move comes as the agency seeks to wind down the COVID-19 rescue program. There are about 7.1 million PPP loans that remain outstanding and about 6 million are for $150,000 or less.
Eligible borrowers will receive an email from the SBA with a link to the online portal, said the SBA’s Patrick Kelley. The application for forgiveness should take less than 10 minutes to complete, Kelley said. The SBA has created a customer service line to answer borrower questions.
Banks responsible for originating the PPP loans must opt into direct forgiveness before their borrowers can use the SBA’s online platform, which could potentially limit the initiative’s reach.
The SBA portal begins accepting applications for forgiveness Wednesday, Aug. 4.
Source: Wall Street Journal