As Congress Considers PPP Changes, SBA Announces Loan Forgiveness Process

The Small Business Administration late last week reaffirmed that borrowers have the responsibility to calculate loan forgiveness under the Paycheck Protection Program and that lenders are only responsible for making a “good faith review” of any documents a borrower submits.

“If the Lender determines that the borrower is entitled to forgiveness of some or all of the amount applied for under the statute and applicable regulations, the Lender must request payment from SBA at the time the Lender issues its decision to SBA,” the agency said, in its most recent guidance released.

Even as the SBA released guidance to lenders, the entire loan forgiveness process remains in a state of flux. Congress is preparing to open negotiations on the next economic stimulus bill. Legislation that would make the loan forgiveness process automatic for borrowers with loans under $150,000 has been introduced in both houses. The Credit Union National Association and the National Association of Federally-Insured Credit Unions, as well as banking trade groups, support that legislation.

The SBA, in its guidance, states that if a lender finds errors in a borrower’s calculations, the lender should work with the borrower to correct those problems. Lenders must submit a forgiveness decision to the SBA within 60 days of receiving it from a borrower. At the same time, lenders must request payments from any loan that is forgiven.

SBA also announced it is partnering with a financial services technology provider – Goldschmitt-CRI – to make available a secure platform for forgiveness applications. That platform will be available on August 10 as long as Congress does not make changes to the forgiveness process that would necessitate changes to the platform.


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