Government Watchdog: PPP Forgiveness Complexity Creates Burden

Applications for Paycheck Protection Program loan forgiveness are more time-consuming than actually applying for the loan itself and require more lender review, according to a report Monday from the Government Accountability Office. While the GAO noted that this is in part due to requirements in the CARES Act, which created the PPP, the Small Business Administration estimates that borrowers will need three hours to fill out the standard forgiveness form.

“[L]enders are to do a good-faith review of loan forgiveness applications and make a decision about whether the loan should be forgiven,” GAO noted. “Although SBA states on its standard loan forgiveness application that it will take borrowers three hours to complete, representatives from one [trade]association heard from lenders that it could take 15 hours for some borrowers to complete. . . . Representatives from a lender association estimated it could take 50-75 hours for lenders to review a complex forgiveness application and the supporting documentation.”

ABA and the state bankers associations support bipartisan legislation that would streamline the process, forgiving PPP loans of less than $150,000 after borrowers complete a simple, one-page forgiveness application. ABA is urging Congress to advance these bills as standalone measures in the waning days before Congress’ preelection recess.