The SBA recently launched a direct PPP loan forgiveness portal in an effort to streamline the loan forgiveness process.
This is really good news, in our opinion, especially if you applied for the first or second draws of the Paycheck Protection Program.
We know many of you have had issues applying for PPP loan forgiveness through your participating lender or bank.
And those issues range from them not accepting forgiveness applications or just not providing clarity on the forms required for forgiveness.
It’s honestly just been a hassle for a lot of business owners to successfully get their PPP loan forgiven.
So if you were 1 of the millions of small business owners who received the Paycheck Protection Program loan or PPP loan, this update is specifically for you.
If you recall, the Paycheck Protection Program was released to help small business owners retain their employees and remain in business.
Now it was set up to be a “forgivable” loan.
This means once the funds were received, you could apply for forgiveness and not have to pay any of the loan back, if the funds were used for payroll and other qualifying business expenses.
The Problem with Applying for Forgiveness from Banks
Prior to this update, forgiveness could only be applied through your lender or bank.
And this has presented huge administrative problems.
Many business owners have been unable to apply for forgiveness through the bank because:
- banks have been closing their forgiveness applications,
- delaying the loan forgiveness process, or
- even partially forgiving loans without explanation.
The New SBA PPP Direct Forgiveness Portal
Now, due to this SBA update, forgiveness is directly available through the SBA’s new PPP loan forgiveness portal, if your PPP loan was under $150,000.
The goal of the SBA’s portal is to ease the burden on banks by allowing small businesses to directly apply for forgiveness from the SBA.
Who Can Use the PPP Loan Forgiveness Portal?
Specifically, the portal will simplify forgiveness for smaller businesses, including sole proprietors.
The vast majority of businesses who applied for the PPP loan received loans under $150,000.
In fact, the average loan size was $42,000. So for most of you, applying directly through the SBA is a viable option.
And considering the forgiveness process is already difficult as it is…
…having this portal option is awesome news and will help millions of businesses to get back to what they do best and that’s running their businesses.
The new PPP loan forgiveness portal will begin accepting applications from PPP borrowers on August 4th of 2021. Simply go to the SBA website to apply.
In addition to this new platform, the SBA is setting up a customer service team to answer questions and directly assist borrowers with their applications.
Again, that’s more good news, considering banks have been a little unaware of what the SBA has been asking for in terms of forgiveness applications.
You can now bypass the middle man or ‘the bank’ and speak directly to the SBA regarding your PPP questions.
And this is the number and times you can contact them with your questions.
The SBA also released a user guide for the portal. And it’s designed to walk you through step by step how to register on the new platform and apply for forgiveness.
Another detail to consider is that lenders are required to opt into this program through the SBA.
Lenders actually have a separate portal they have to register through in order to opt-in.
What this means is that, as a borrower, you have 2 options to apply for forgiveness.
- One is through the new SBA PPP loan forgiveness portal site.
- And the second is through the lender you applied from.
Either option works perfectly fine. Some borrowers have not had any issues with their bank and would prefer to apply through that route.
For many others, this is not the case, and applying through the SBA’s portal would be better.
But if you do want to apply for forgiveness directly from the SBA, your bank or lender has to opt-in.
Only borrowers with participating lenders in the SBA’s portal can use the portal to apply for forgiveness.
According to the SBA’s most recent press release, currently, 600 banks have opted in which would allow over 2 million borrowers to apply through the portal.
This is roughly 30% of loans under $150,000 that haven’t applied for forgiveness.
However, if you navigate to this link and download their list of participating lenders, you will see that there are almost 900 lenders listed.
So there is a good chance that your lender is participating in the SBA’s direct loan forgiveness program.
If you don’t see your lender listed, we’d recommend calling them and asking if they plan on opting in and when they expect to do so.
Get Ready to Apply
If you do plan on applying for forgiveness and are patiently waiting for the SBA’s portal to become available…
…there are a few things you can do to prepare and submit your application as soon as it becomes available.
For borrowers with loans under $150,000, you can fill out Form 3508-S and this represents the short-form version of the loan application.
Some documents you would need to include in your forgiveness application are:
- Bank statements or third-party payroll service provider reports
- Payroll tax filings
- State quarterly business and individual employee wage reporting
- Business rent payments
- Business utility payments
- Covered operating expenses
- Covered supplier costs
The specific documents that are required will depend on the information provided on your original PPP loan application and how you used the funds.
But you can start gathering this information now so once the portal opens, you can submit your application right away.
That’s all we have for this post. We hope you found it helpful.
But if you have any questions or if you have had issues getting your PPP loan forgiven, then work with our tax consultants today.
Our expert team can definitely help you with your concerns about taxes and more. Contact us now!