Millions of small businesses that received money from the Paycheck Protection Program in order to stay afloat during the coronavirus pandemic will soon be able to use an online portal to apply directly for loan forgiveness.
The Small Business Administration announced Wednesday the direct portal, which is slated to open Aug. 4, will be available to business owners with PPP loans worth less than $150,000. Previously, businesses could only apply for PPP loan forgiveness through their lender.
"These entrepreneurs are busy running their businesses and are challenged by an overly complicated forgiveness process," SBA Administrator Isabel Guzman said in a statement. "We need to deliver forgiveness more efficiently so they can get back to enlivening our Main Streets, sustaining our neighborhoods and fueling our nation's economy."
More than 600 banks have opted in to direct forgiveness so far, the SBA said, which will allow some 2 million borrowers to access the portal, or roughly 30% of loans worth $150,000 or less that have not yet applied for forgiveness. Eligible individuals will receive an email from the SBA with a link to the portal.
"This initiative will allow PPP borrowers to put their concerns of achieving full forgiveness behind them and focus on operating and growing their businesses again," said Patrick Kelley, associate administrator for SBA's Office of Capital Access.
The creation of the portal is designed to speed up the forgiveness process; so far, just 4.1 million loans worth roughly $394.6 billion had been forgiven as of June 30, according to tracking by the Pandemic Response Accountability Committee.
Lawmakers created the rescue fund — a vital lifeline that provided forgivable loans to businesses if they maintained their payroll — in March 2020 with the passage of the $2.2 trillion CARES Act, just a few weeks after the pandemic took hold. Twice replenished, the PPP distributed roughly $800 billion in forgivable loans to some 11.8 million businesses, according to government data.
Although the program provided critical relief to struggling businesses, it was also plagued by complaints of fraud and criticism that it overlooked the neediest businesses.