The Small Business Administration is reporting significant progress forgiving Paycheck Protection Program loans.
The agency reported late Monday that it had forgiven more than 1.1 million PPP loans totaling more than $100 billion. At the time of its last update, on Nov. 22, the SBA had forgiven about 367,000 loans totaling $38.4 billion.
The updated report comes as the SBA relaunches the portal for PPP applications. About 5.2 million PPP loans totaling $525 billion were approved between April 3 and Aug. 8, when its funding authority lapsed.
Congress allocated another $284.5 billion as part of the stimulus package signed into law on Dec. 27. The SBA reopened its lending portal Monday to community development financial institutions, minority depositories and other mission-based lenders. Lenders with less than $1 billion of assets can access the portal on Friday; everyone else will be able to process applications on Tuesday.
“SBA is continuing to work around the clock to forgive existing PPP loans and implement the next phase of this vital Program,” Administrator Jovita Carranza said in a press release.
The pace of forgiveness may accelerate in coming weeks, after the SBA provides a streamlined process for PPP loans of $150,000 or less. The blanket forgiveness provision was included in the new stimulus law.
The SBA issued guidance providing streamlined forgiveness for loans of $50,000 or less in October.
Several PPP lenders, including the $9.2 billion-asset W.T.B Financial in Spokane, Wash., and the $1.4 billion-asset Sunrise Banks in St. Paul, Minn., have suspended processing forgiveness applications for loans of $150,000 or less in anticipation of new guidance. At the same time, forgiveness for larger loans is proceeding smoothly, they added.
“The SBA has been quite responsive,” Sunrise Chairman and CEO David Reiling said. “That process has been going quite well.”
The same appears to be true for W.T.B, the parent company of Washington Trust Bank.
“We did 5,500 loans in the first phase for $1.3 billion. Of that we’ve submitted over 2,000 loans and received payments on 1,656 loans,” Chief Operating Officer Jack Heath said. “The process seems to be moving very smoothly.”
The $132 billion-asset Navy Federal Credit Union, one of the biggest credit union PPP lenders, also reported good success with its effort.
“Forgiveness is tracking very well for us,” said Tony Pica, the Vienna, Va., credit union’s vice president of business solutions.
The PPP offers small businesses impacted by the coronavirus pandemic loans of up to $10 million. As part of the new stimulus law, existing borrowers than can demonstrate a $25% year-over-year reduction in gross receipts during one quarter in 2020 can qualify for a second-draw loan of up to $2 million.
Proceeds spent on covered expenses, including employee compensation and benefits, mortgage interest, rent, utilities and personal protective equipment, are eligible for forgiveness.
The SBA opened its forgiveness portal on Aug. 10, but activity remained limited for several months as businesses delayed filing in hopes a streamlined application would be extended to cover larger loans.
The agency said it has received nearly 1.4 million forgiveness applications for about $170.5 billion.
