The U.S. Small Business Administration (SBA) announced changes Wednesday designed to reduce delays in the Paycheck Protection Program (PPP) approval process.
Millions of small businesses have applied for PPP forgivable loans since it reopened Jan. 11 with $284 billion in fresh funding. A significant percentage of those applications has been held up by process and system issues stemming from additional validation checks put in place to flag potential fraudulent applicants.
The AICPA sent a letter Feb. 3 urging the SBA to address the problems, which were causing the SBA’s E-Tran and PPP Loan Processing system to either reject or require more documentation for around 30% of PPP applications. Often the system didn’t allow lenders to submit the documentation or directly address other errors, such as data mismatches, that were preventing otherwise acceptable applications from being approved. The AICPA also called on the SBA to provide more frequent and clear communications to lenders and small businesses about the PPP issues.
To address the concerns raised about the PPP process, the SBA said it would allow lenders to directly certify the eligibility of borrowers for first- and second-draw loans and would not require lenders to submit supporting documentation of borrowers with validation errors until they apply for loan forgiveness. The changes are designed to speed up the flow of funds to PPP applicants while “maintaining the integrity” of the program, according to the SBA.
The SBA also said it would create additional communication channels with lenders, including an immediate call with national lenders to brief them on the PPP platform’s added capabilities.
How much the SBA changes will smooth out the application process will be revealed as the platform tweaks are implemented with lenders. Accounting firms with small business clients whose applications are on hold may want to continue to preach patience as the SBA works to improve its platform and procedures.
Despite the system and process issues, the SBA approved almost 1.3 million PPP loans totaling $101 billion from Jan. 11 through Feb. 7. The program is scheduled to continue accepting applications through March 31.
AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members and $39.99 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register.
The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.
Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA, CPA.com, and fintech partner Biz2Credit.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.
— Jeff Drew ([email protected]) is a JofA senior editor.