More than 96,000 requests for Paycheck Protection Program loan forgiveness have been submitted to the Small Business Administration since early August, but none were approved — but that’s about to change.
The Treasury Department said that PPP requests will start to be approved and paid late this week or early next, the Wall Street Journal reported. The move comes as banks and small businesses have raised concerns about the onerous process of applying for forgiveness.
Forgiveness for smaller PPP loans is expected to be processed quickly, while loans above $2 million will face additional scrutiny. Loans of $2 million or more account for just 0.6 percent of the 5.2 million that have been approved, and 20 percent of total funds disbursed, according to the SBA. The average size of a PPP loan is $101,000.
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Recipients of larger PPP loans include a wide range of real estate-related businesses, according to data released by the agency in July. The program expired in August, with about $130 billion in funds yet to be allocated.
Lawmakers continue to debate additional small-business relief measures, including allowing eligible businesses to receive second PPP loans, or providing blanket forgiveness for loans of less than $150,000.
In a late August survey, 44 percent of PPP borrowers told the National Federation of Independent Business that they would apply for a second loan if it were made available, and 84 percent of respondents said they had already used their first loan.
Jack Murphy, president of business banking at Citizens Financial Group, said at a conference Tuesday that the forgiveness process has been unexpectedly complex. “It’s taking us two weeks to process an application,” he said. “Four to six contacts between small-business owners… and the folks that are trying to process the forgiveness applications.” [WSJ] — Kevin Sun