The Small Business Administration officially opened its Paycheck Protection Program loan forgiveness portal to lenders on Aug. 10. And of the 5.2 million loans approved under the program, the agency has received only 56,000 forgiveness determinations from lenders so far.
That number, from a Government Accountability Office report published Monday with data through Sept. 8, shows just how slow the process may be for the SBA and bank lenders to wade through the millions of PPP loans approved before the program expired Aug. 8. Thus far, a little more than 1% of approved loans have resulted in formal forgiveness requests by a lender through the first week of September.
However, the GAO report doesn't offer any information on whether the SBA has begun processing or has approved any of the forgiveness determinations from lenders. The SBA declined to provide that information after repeated requests. Per the GAO report, the agency was still developing its review and oversight process for PPP loan forgiveness as of Aug. 14.
"According to SBA officials, SBA intends to put all lender decisions granting full or partial loan forgiveness through an automated review tool provided by one of its contractors, and — when requested by borrowers — to review lenders’ decisions to deny loan forgiveness," according to the GAO report.
Ultimately, the PPP loan forgiveness process requires the small business to fill out an application and submit it to the lender, which then has 60 days to render its decision. That decision is then sent to the SBA, which has 90 days to process and finalize the application and reimburse the bank for the loan. There is also an appeals and review process, should either party disagree with the SBA's or bank's findings, and that could take years to play out.
Some of the biggest PPP lenders have said they will not share information on the number of PPP forgiveness applications they have processed, or whether any of their customers have been granted loan forgiveness. Banking giant Bank of America Corp., which approved 343,626 PPP loans, the second-largest number behind JPMorgan Chase & Co., said it had begun accepting loan forgiveness applications, but would not share figures. Pittsburgh-based PNC Bank, also among the top PPP lenders with 73,925 approved loans, said the same. Truist Bank said it had not begun accepting PPP loan forgiveness applications.
The lack of clear data, as well as the small number of lender decisions sent thus far to the SBA, show a tenuous PPP forgiveness process, one that got a delayed start given that the five largest lenders did not begin accepting applications on the day the SBA opened its forgiveness portal. Small-business advocates and some lawmakers have pushed for automatic loan forgiveness for some recipients, arguing that even the streamlined forgiveness process published by SBA over the summer was too difficult and onerous for small businesses.
A difficult path to forgiveness could result in what banking industry groups have called PPP "fatigue," according to the GAO — meaning those lenders may be less likely to participate in future rounds of the program, if Congress were to authorize any.
But hopes for another round of forgivable loans are fading as the election approaches. Despite support from lawmakers in both parties, a new PPP round has remained part of larger stimulus measures that have failed to win enough support for passage. Senate Republicans introduced a so-called "skinny" stimulus with pared-down spending, but it was quickly defeated. An earlier Republican proposal called the HEALS Act did not receive a vote, while a Democrat-led stimulus package, the HEROES Act, passed the House in May, but did not come up for a vote in the Senate.
