The SBA has announced that it will launch a new PPP forgiveness portal on August 4, 2021. This portal will allow certain small business borrowers to apply for forgiveness directly with the SBA.
Who will qualify to use this portal?
Lending institutions will opt to participate with the new SBA direct forgiveness portal. Borrowers should reach out to their lenders or look for upcoming communications with their lenders to determine if their lender is participating.
This new portal will be exclusively for PPP loans of $150,000 or less. Borrowers with loans in excess of $150,000 will still be required to apply for forgiveness directly through their lender.
This new portal will effectively skip the step of an initial review by the borrower’s lender and expedite the PPP forgiveness timeline significantly.
Other changes to the PPP Program
The SBA also announced changes to the deferral period for PPP loan payments during the appeal process of a denied PPP loan and the streamlined forgiveness for second draw PPP loans.
Who will qualify for second draw streamlined forgiveness?
Under the original rules of the PPP second draw program, borrowers were required to submit documentation to prove a reduction in revenue of at least 25%. Although the SBA requirement stated this information was to be submitted at loan forgiveness, some lenders required the information at the time of PPP second draw loan application.
In the new Interim Final Rule (IFR), the SBA will allow borrowers of loans $150,000 or less who did not submit the revenue reduction at the time of loan application to use an alternative form of revenue reduction confirmation. This alternative form will be a score assigned by an SBA independent contractor. The score will be based on a variety factors including, the industry, geography, business size and economic and operational status of the business. Borrowers who submit their forgiveness directly through the SBA portal will be able to review their score as a part of the submission of forgiveness. If the score meets a minimum requirement, the borrower will be permitted to use the independent scoring, rather than submitting documentation, to substantiate the reduction in revenues to qualify for PPP second draw forgiveness.
Who will qualify for extended PPP loan payment deferral periods?
The IFR also provides for an extended deferral period of PPP loan payments if a loan’s forgiveness denial is under appeal with the SBA.
Borrowers of PPP loans were provided with a loan payment deferral. The borrowers were not required to make any payments on the PPP loans for the covered period (up to 24 weeks from the date of loan funding) plus an additional ten months after the end of the covered period. Borrowers should attempt to apply for forgiveness prior to the end of the deferral period.
If borrowers do not apply for forgiveness by the end of the deferral period, they will be required to make payments on their PPP loan. Any payments paid on loans that are then forgiven will be remitted back to the borrower at the time of forgiveness.
How can Mitchell Wiggins help?
Our PPP Task Force can assist in your PPP forgiveness process, through consultation or full completion of the forgiveness package. Please complete our contact form to get in touch with our PPP Task Force or reach out to your Mitchell Wiggins team directly.