The Small Business Administration is preparing to launch a streamlined application portal that will allow Paycheck Protection Program borrowers with loans of $150,000 or less to apply for forgiveness through the SBA.
As the coronavirus crisis Paycheck Protection Program ends, the Small Business Administration reported that this year 859 credit unions made almost $5.6 billion in loans to businesses to help them weather the pandemic.
The Small Business Administration improperly blocked state-chartered, privately insured credit unions from participating in the Paycheck Protection Program, Credit Union National Association President/CEO Jim Nussle charged Wednesday.
The National Credit Union Administration placed Empire Financial Federal Credit Union in Jackson, New Jersey, into conservatorship on Monday.
The Small Business Administration’s Paycheck Protection Program has run out of money for loans that most credit unions and banks would make, but PPP loans are still available through Community Development Financial Institutions, an SBA spokesperson said Wednesday.
The House Small Business Committee held a hearing on the Small Business Administration’s oversight of Paycheck Protection Program. The SBA is trying to mitigate fraud in the program.
According to the Government Accountability Office, the Small Business Administration has not conducted a comprehensive assessment of the risks of the Paycheck Protection Program because of the need for a rapid execution of the program. The GAO does not consider this an acceptable excuse and noted that an independent auditor reported multiple problems with the loan program.
President Biden on Tuesday signed legislation that will extend the deadline for businesses to apply for Paycheck Protection Program loans from March 31 to May 31.
The legislation, H.R. 1799, also allows the Small Business Administration to continue to process loans until June 30. This will allow loans that are in the pipeline on May 31 to be processed.
The Small Business Administration’s Inspector General has issued a report finding that in the first batch of Paycheck Protection Program loans last year, 4,260 borrowers got two PPP loans when they only should have received one. The SBA intends to not forgive those duplicate loans, but to prevent duplication from happening again, the SBA has added controls that are causing delays and a logjam in loan processing this cycle, raising concerns that businesses will be caught without a loan when the program ends on March 31. The House has now passed legislation that would extend the PPP to the end of May.
Financial services trade groups, including the Credit Union National Association and the National Association of Federally-Insured Credit Unions, are concerned that the Paycheck Protection Program will expire on March 31 with thousands of loans stuck with “holds” that will prevent those small businesses from getting assistance. They want all loan applications received by the March 31 expiration date of the PPP to be processed.