New Portal Streamlines PPP Forgiveness for Small Businesses

Published On
Aug 18, 2021

After much prodding by the construction industry and others, the U.S. Small Business Administration (SBA) is now letting businesses that took out Paycheck Protection Program (PPP) loans for $150,000 or less apply directly for forgiveness through a streamlined application portal.

The change will impact the “vast majority” of businesses still waiting for forgiveness, more than 6.5 million of the “smallest of small businesses” that participated in the program, according to the SBA.

“These entrepreneurs are busy running their businesses and are challenged by an overly complicated forgiveness process,” SBA administrator Isabella Casillas Guzman said in a press release announcing the launch. “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.”

“The simplified PPP forgiveness portal is a major win for electrical contractors, who have been on the forefront of this pandemic. It will allow our contractors to focus on their business and not government bureaucracy. NECA commends the Small Business Administration for its establishment,” said James Farrell, NECA’s executive director of government affairs.

Another industry group that lobbied for a faster forgiveness process was the Associated General Contractors of America (AGC), Arlington, Va. Overly long processing times in the months prior had proved difficult for many contractors because they had to carry loans as a liability on their balance sheets until a decision was made, AGC’s general counsel Michael Kennedy told Construction Dive.

“It’s already having a financial impact on the companies that are waiting for forgiveness,” Kennedy said in May. “We have reason to believe that it’s impacting contractors’ bonding capacity, we have reason to suspect that it’s impacting contractors’ credit ratings.”

Established by the CARES Act in 2020, the PPP was among the first COVID-19 small business economic aid programs. It provided more than $798 billion in economic relief to small businesses and nonprofits across the country, according to the SBA.

PPP borrowers can apply for forgiveness once all loan proceeds have been used, and any time up to the maturity date of the loan. If borrowers do not apply 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. Lenders are required to opt-in to the streamlined forgiveness program.

More than 600 banks, including Customers Bank in West Reading, Pa., have opted in to direct forgiveness, enabling more than 2.17 million borrowers to apply through the portal, according to the SBA. This represents 30% of loans $150,000 or less that have not yet submitted for forgiveness.

“As one of the leading PPP lenders in the nation, Customers Bank is proud to partner with SBA to deliver responsive digital loan forgiveness service to the small business borrowers,” the bank’s president and CEO Sam Sidhu said in the SBA press release. “The streamlined and efficient SBA PPP loan forgiveness portal will help borrowers and lenders move forward with economic growth and job creation following the pandemic. We encourage other lenders to join Customers Bank and opt-in to the SBA portal.”

PPP borrowers can call (877) 552-2692 to talk to a dedicated PPP customer service team at the SBA, who will be able to answer questions and directly assist borrowers with their forgiveness applications.

Overall, the SBA and lenders have worked to originate more than 11.7 million loans totaling nearly $800 billion in relief to more than 8.5 million small businesses. In 2021 alone, the agency approved more than 6.5 million loans totaling more than $275 billion, and the average loan size was roughly $42,000, compared to $101,000 in 2020.

Nearly all (96%) of the PPP loans approved in 2021 went to businesses with fewer than 20 employees, compared to 87% in 2020. A third (32%) of loans went to businesses in low- to moderate-income communities, compared to just 24% in 2020.

About the Author

Katie Kuehner-Hebert

Katie Kuehner-Hebert has more than three decades of experience writing about the construction industry, and her articles have been featured in the Associated General Contractor’s Constructor magazine, the American Fence Association’s Fencepost, the...

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