This week, the SBA announced that they created an expedited PPP loan forgiveness portal for those who received $150,000 or less. The portal was created to quicken the loan forgiveness process since many banks expressed their inability to handle the verification themselves. The previous loan forgiveness process was burdensome to small businesses and small banks alike, but the SBA has changed that.
The SBA's PPP Forgiveness Portal Announcement
On July 28, 2021, the SBA released information about the upcoming PPP direct forgiveness portal. SBA Administrator Isabel Guzman said it will "simplify forgiveness for millions of our smallest businesses." She went on to say that the "vast majority" of businesses have a PPP loan under $150,000.
Since the beginning of the PPP, the SBA has approved over 11.7 million applications to 8.5 million small businesses, equaling about $800 billion in small business relief. This updated process will enable some 6.5 million borrowers, or about 77%, to apply for forgiveness through the SBA's portal.
How Does the PPP Forgiveness Portal Work?
Starting August 4th, 2021, borrowers will be able to apply for forgiveness directly with the SBA, using the SBA PPP Direct Forgiveness Portal. Borrowers will be asked a series of questions that appear on application form 3508S, updated on July 30th. We highlight the questions you will be asked below.
To use the PPP direct forgiveness portal, your lender must participate in direct forgiveness. You can check if your lender opted-in by viewing the SBA's current list of lenders participating in direct forgiveness. If your lender is not participating, you cannot use the online portal and will instead need to apply for forgiveness through your lender.
What Questions Will The PPP Forgiveness Portal Ask?
When you use the portal and apply for direct forgiveness, you will be asked questions regarding the following information:
- During which draw your loan was taken (first or second)
- Your loan amount, SBA loan number, Lender loan number, and disbursement date(s)
- Loan increase amount (if applicable)
- Number of employees at the time of loan application and forgiveness application
- Coverage period
- Amount of loan spent on payroll
Does The PPP Forgiveness Portal Require Documentation?
The easy answer is no. The SBA created this portal so that borrowers can individually attest to the accuracy of the information, thereby releasing the lenders from the responsibility of verifying it themselves. However, the SBA can audit your application and request documentation so they can verify it.
IF you are audited and/or asked to provide documentation, here is a list of documents you may need to present.
- Bank statements
- Third-party payroll service reports (if applicable)
- Tax forms
- Proof of PPP loan payment towards employee health insurance or retirement plans
- Proof of business mortgage interest payments or rent/lease payments
- Business utility payments
- Proof of covered property damage costs (invoices, purchase orders, etc.)
- Proof of covered supplier costs (copy of contract, purchase orders, etc.)
You can learn more about loan forgiveness by visiting the SBA's PPP loan forgiveness website.
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