PPP Extension Further Extends Servicing Burden for Lenders



The PPP Extension Act of 2021 was passed in late March, giving small business borrowers an additional two months to apply for much-needed PPP relief. Moving the deadline forward provides applicants with numerous benefits, but it also prolongs the challenges of PPP for participating lenders.

Extension benefits first-time borrowers blocked by eight-week application gap

While the program extension creates additional time to clear application error and hold codes, it also provides first-time PPP borrowers with the opportunity to apply for a second draw loan. The SBA requires an eight-week gap between first and second draw PPP applications. Meeting this timeline was challenging for first draw borrowers under the previous deadline. The program extension permits more borrowers to meet the timing requirement to apply for a second draw loan.

Extension drawbacks lead lenders to outsource PPP loans

Despite the many benefits of the extension, it also protracts the burden of PPP for lenders. While banks are presented with the initial obstacle of re-opening closed application portals and re-transitioning teams to focus on PPP, they are also faced with lengthening forgiveness and servicing obligations after the program ends.

Outsourcing PPP loans to a partner eliminates the onus of application processing and relieves long-term forgiveness and servicing strains. Working with a PPP partner empowers lenders to provide their borrowers with:

✓  Improved access to PPP financing and forgiveness

✓  Expert PPP application processing, service, and technology

✓  Experienced PPP support

✓  Ongoing PPP guidance as rules, regulations, and deadlines evolve

Refer PPP loans to an experienced partner

Choosing the right PPP partner provides banks and borrowers with an enhanced PPP experience. When selecting a partner, look for an expert PPP team. Consider ACAP, a non-bank PPP servicing partner whose platform was designed to support lenders and borrowers while accommodating PPP’s complex requirements.

“We’ve partnered with ACAP and The Loan Source to make the PPP application and forgiveness process simple and straightforward. We found many of our clients struggling to apply due to smaller lenders being overwhelmed, or larger banks segmenting clients into tiers. In cooperation with ACAP and The Loan Source, we give all our clients equal service and attention for their application.”
– Ted Haberfield, President of MZ North America

ACAP supported banks during the first and second waves of PPP lending. Today, the company is expanding relief-loan servicing to help drive equal access and program fairness as PPP moves forward.

“Helping American businesses and lenders who support them should be simple and less complicated. ACAP exists to make PPP lending, servicing, and loan forgiveness better,” said David Cody, co-founder of ACAP.

ACAP is a non-bank servicing partner that supports lenders with complete PPP solutions. In partnership with The Loan Source, dedicated to PPP origination, the team is committed to helping banks and borrowers by reducing risks, accelerating loan income, and improving access. Together ACAP + The Loan Source deliver PPP loan forgiveness, servicing, and robust customer support.