The Small Business Administration today released guidance on how it will accept Paycheck Protection Program loan forgiveness applications directly from borrowers—bypassing the lending institutions—for loans of $150,000 or below. The direct borrower forgiveness process is an “optional technology solution that SBA is providing to PPP lenders that will leverage SBA’s existing and proven platform,” SBA said.
PPP lenders that opt-in to the direct borrower forgiveness program will be provided with a single secure location for all of their borrowers with loans of $150,000 or less to apply for loan forgiveness through the platform using the electronic equivalent of SBA Form 3508S. Upon receipt of notice that a borrower has applied for forgiveness through the platform, lenders will review the loan forgiveness application in the platform and issue a forgiveness decision to SBA.
SBA said it will release in the coming days additional guidance on the opt-in process, how borrowers can access the platform, and how lenders can access the forgiveness applications in the platform.
The guidance also allows borrowers who received second-draw PPP loans of $150,000 or less to be exempt from supplying required documentation proving a 25% revenue reduction in 2020 when compared to a comparable time in 2019. Instead, SBA will issue an alternative COVID reduction score based on a variety of inputs, including industry, geography and business size for each second-draw loan of $150,000 or below. The guidance takes effect immediately.
