PPP loan forgiveness portal opens, but big banks give up.

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The government announced a meeting on Wednesday to expedite the forgiveness of Payday Protection Program loans. online portal Small businesses that owe up to $150,000 can apply to have their loans canceled.

The Small Business Administration, which runs the program, hopes the new system will streamline the process for both borrowers and the program’s approximately 5,500 lenders, collectively providing 11.8 million government-backed loans totaling $800 billion between April 2020 and May 2021. Each lender had to set up its own process for collecting loan forgiveness applications and submitting them to the SBA for approval.

Isabel Casillas Guzman, the agency’s director, said the new system will “make it easier for millions of our smallest businesses to donate.” About 92 percent of the program’s loans go under the portal’s $150,000 limit.

But there is a problem: Lenders also have to agree to use the portal, otherwise the service will not work for the borrower. Until now, about 900 credit institutions signed, but many of the program’s biggest lenders, especially large banks, are not on board.

Several lenders said they chose to stick with their own processes, out of concern that redirecting customers to the SBA’s portal would create confusion. Banks are also wary of trusting an institution that has struggled with issues throughout the pandemic. buggy and overloaded technology systems.

The SBA did not immediately comment.

JPMorgan Chase, the program’s largest lender, said it was “too early to say” whether it would join the portal. “We are evaluating all aspects of the process and in the meantime continue to encourage our customers to apply for donations through our platform,” said bank spokesperson Elizabeth Seymour. A bank spokesperson said Bank of America is also not participating at this time.

Still, a few major lenders are enthusiastic. Adam Seery, COO of Harvest Small Business Finance, said he hopes to use the new portal to process grant applications for most of his company’s 430,000 loans this year.

“So far this has been a huge success and will save months in processing times,” he said of testing Harvest has done over the past few weeks. Harvest submitted its first batch of around 30 applications this week and hopes these loans will be paid off soon.

About 80 percent of the 5 million PPP loans granted last year were fully or partially forgiven. latest agency data, but few of this year’s borrowers started the process. Most have until next year to seek forgiveness before they have to start paying off their loans.

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