In response to a letter from the American Bankers Association yesterday highlighting “systemic” issues with the Paycheck Protection Program since its reopening earlier this month, the Small Business Administration today announced several steps it will take to ensure that second-draw PPP loans can be processed efficiently.
Among other things, ABA flagged that the PPP portal does not permit lenders to upload borrower applications for second-draw loans if the borrower still has a pending forgiveness application for a first-draw loan with SBA. According to SBA, a review of the initial draw of PPP loans revealed data anomalies in 4.7% of the lender-submitted applications that will require follow-up between the borrower and lender before a second-draw loan application can be processed.
Specifically, SBA said it would host a national call with lenders to share additional detailed information that will assist in the resolution of first-draw PPP loan review and potential holds that affect second-draw PPP loan application approvals. SBA will also provide additional education to its field team of lender relations specialists to help them respond to borrower and lender issues, and will provide additional guidance on the loan review and resolution process.
During the latest round of PPP funding, SBA has already approved over 400,000 loans totaling approximately $35 billion.