Millions of small businesses could soon see a simplified loan forgiveness application process after receiving funds to keep paying workers and stay afloat amid the.
The Small Business Administration announced Wednesday that it's launching a new portal for small businesses to apply directly for Paycheck Protection Program loan forgiveness through the agency. This comes as only about half of the $800 billion in so-called PPP distributed amid the pandemic has been forgiven so far.
The direct portal, which will open for applications starting August 4, will be available for businesses that had PPP loans of $150,000 or less. Previously, businesses were only able to apply for PPP forgiveness through their lender.
"The SBA's new streamlined application portal will simplify forgiveness for millions of our smallest businesses — including many sole proprietors — who used funds from our Paycheck Protection Program loans to survive the pandemic," administrator Isabel Guzman said in a statement. "The vast majority of businesses waiting for forgiveness have loans under $150,000. These entrepreneurs are busy running their businesses and are challenged by an overly complicated forgiveness process. We need to deliver forgiveness more efficiently so they can get back to enlivening our Main Streets, sustaining our neighborhoods and fueling our nation's economy."
According to the Small Business Administration, more than 600 banks have opted in to direct forgiveness so far, enabling more than 2 million borrowers to apply through the new portal. That represents 30% of loans $150,000 or less that have not yet submitted for forgiveness, the SBA said.
"This initiative will allow PPP borrowers to put their concerns of achieving full forgiveness behind them and focus on operating and growing their businesses again," said Patrick Kelley, associate administrator for SBA's Office of Capital Access.
Thewas first passed by Congress in spring 2020 as part of the first round of coronavirus relief in response to the pandemic. Between 2020 and 2021, it has provided more than 11.7 million loans totaling nearly $798 billion to help hard hit businesses.
But according to tracking by the Pandemic Response Accountability Committee, only 4.1 million loans had been forgiven as of June 30, totaling $394.6 billion.
Borrowers can apply for forgiveness once all the money they requested through PPP has been used up until that loan comes due. If borrowers have not applied for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender
In addition to launching its direct forgiveness portal, the Small Business Administration said it is setting up a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications.
While businesses can apply for PPP loan forgiveness, the program for.
However, many small businesses are still hurting due to the pandemic. A June survey by Goldman Sachs found 8 out of 10 small business respondents said their PPP funds would be exhausted by the end of July. Just 24% were confident they could maintain payroll once their PPP money ran out.