Online Portal for PPP Loan Forgiveness

Mark Your Calendars as the Online Portal for PPP Loan Forgiveness Processing will Be Launched this August 2020

The long-awaited portal for processing Paycheck Protection Program (PPP) loan forgiveness is scheduled to be launched on August 10, 2020. The US Small Business Administration (SBA) recently announced that it will begin accepting PPP forgiveness applications on August 10, which will allow lenders who seek approval of PPP loan forgiveness decisions to electronically submit their applications, by batch or by individual entries, using the application programming interface that will be made available on the same date – August 10.

On July 23, all lenders participating in the Paycheck Protection Program in regards to PPP loan forgiveness were issued with a procedural notice that it will soon be accepting forgiveness applications. Before this procedural notice was sent out, the agency was not able to provide comprehensive guidelines on how they will be receiving and processing forgiveness applications from lenders, other than the guidelines in managing procedural gaps.

Here are the highlights of the recent procedural notice from SBA:

An online portal dedicated to process submissions of forgiveness applications will be launched on August 10 – the same date when SBA will start accepting forgiveness applications from lenders.
This online platform will only be open to lenders and not among individual PPP borrowers.
Before August 10, 2020, SBA is poised to send email instructions (to the PPP loan lenders) for using the portal, which will include the link to the platform on the SBA website.
The deadline of submissions is subject to extension as new legislative amendments to the forgiveness process may be adopted and implemented changes to the system.

As part of the preparations, lenders should be reminded of the following important points regarding PPP loan details, which impact the agency’s decision on their forgiveness applications:

It is the responsibility of the PPP borrowers to calculate the specific forgiveness amount that applies to them or their entity.
It is the responsibility of the PPP borrowers to prepare the forgiveness application and submit it to the lender.
Then, the lender is expected to do a thorough review of the application “in good faith”, determining the accuracy and completeness of the borrower’s calculations and supporting documentation.
In the event that errors are made known to the lender, it must work with the borrower to make all the necessary updates to the application before it goes to the SBA. Lenders are given up to 60 days to review the borrowers calculations and documentations and submit the application to SBA.
After the lender approves all the application requirements provided by the borrowers, it must submit to SBA in whole or part. Otherwise, it must deny the borrower’s application.

SBA usually observes up to 90 days to process a PPP loan application. It may review the loan size at its discretion. It had previously announced that it intends to automatically review all loans over $2 million, both for eligibility and forgiveness requests, in which case it will notify the lender so the lender can notify the borrower. At this point, additional supporting documents may be asked. On the other hand, within this 90-day period, for the approved PPP loans, SBA is also expected to remit to the lender the appropriate forgiveness amount with interest through the date of payment. In cases when the loan amount remains unforgiven, the borrower will begin an equal monthly loan payment of the principal with interest for 18 months.

With the anticipation built on the launch of the online portal for processing forgiveness applications to the SBA, please be reminded that August 10 is not the deadline of loan forgiveness application. It is understandable that many lenders and borrowers will be anxious and keen to complete the process as soon as possible, but under the CARES Act and SBA rules, the 10-month period after loan disbursement still applied for loan forgiveness applications. Hence, if the borrower submits a forgiveness application within those 10 months, they may choose to defer payment until such time that SBA has approved full or partial forgiveness of their loan. In the event that the application is denied, then the borrower would have to follow the original terms of loan payments, which were given when the PPP loan was approved.

In this light, SBA’s announcement of the launch of the online portal and the start of accepting and processing PPP loan forgiveness applications on August 10 may disappoint borrowers or employers who have already used up all their PPP funds. The absence of the SBA guidelines on forgiveness application had greatly contributed to such confusion. In the event that the Congress manages to pass a new law that changes the PPP system, an extension to the August 10 date of launch may give the SBA a good opportunity to complete and disseminate their promised and much-awaited guidance on this subject.

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