Bankers can expect to spend long hours in coming weeks as they expedite applications for Paycheck Protection Program loans.
A number of lenders are looking to secure approvals for borrowers prior to the PPP’s current March 31 expiration. That could cause bottlenecks as a torrent of applications and other documents flood the Small Business Administration’s portal.
At the same time, error codes continue to cause issues.
“The resolution process … is complex,” Erik Asgeirsson, president and chief executive of CPA.com, said during a recent virtual town hall meeting hosted by the American Institute of Certified Public Accountants. “There are actually applications that have not been able to be successfully submitted into the SBA system yet. These need to be fixed.”
Those concerns will likely be covered during a House Small Business Committee meeting set for Wednesday. The panel will discuss the program’s status amid growing calls to extend its lending authority.
Lenders have expressed concerns that errors have landed tens of thousands of applications in a code-related state of limbo as the PPP’s end date nears. Program participants said the issue is making it difficult for them to fully realize the Biden administration's
“Those businesses that should have been eligible to receive PPP funds — including those in hardest-hit communities who may not have taken advantage of PPP last year — will be locked out,” a coalition of nine financial industry trade groups wrote Friday in a letter to senior leaders of the House and Senate Small Business Committees.
The group, which includes the American Bankers Association, Independent Community Bankers of America, Consumer Bankers Association and National Association of Government Guaranteed Lenders, is asking that any application submitted to the SBA by March 31 be deemed eligible for approval. That, they argued, “will provide the necessary time to allow for completion and funding.”
Several bankers have also lobbied for extending the PPP deadline.
The SBA
Biz2Credit, a fintech that is among the three biggest PPP lenders this year, with more than 182,000 loan approvals, aims to design automated fixes to its coding issues. The company, which has hired aggressively to match the expansion of its PPP portfolio, has tasked a significant number of employees with remedying error codes.
But the effort has had limited success.
“Unfortunately, most of the codes require manual intervention,” said Biz2Credit CEO Rohit Arora, adding that the persistent issues make it more likely that Congress will decide to keep the program going beyond the end of March.
Fountainhead Commercial Capital in Lake Mary, Fla., also has a team, led by Chief Operating Officer Michael Bland, set up to resolve error codes.
Bland “is working on coding almost exclusively,” said Fountainhead CEO Chris Hurn. “It’s a terrible use of his time.”
Lawmakers appear open to extending the program’s end date. Last week, Sen. Ben Cardin, D-Md., chairman of the Senate Committee on Small Business and Entrepreneurship, said he planned to hold a hearing where the issue could be discussed.
“The PPP has assisted millions of small businesses since its inception, and as vaccines become more widely available and states begin to open up, we must responsibly examine the program’s future,” said Rep. Blaine Luetkemeyer, R-Mo., and the ranking member of the House Small Business Committee.
“I look forward to doing just that during our committee hearing this Wednesday,” Luetkemeyer added.
Lenders also expressed optimism that the deadline will eventually be extended. The Federal Reserve has already agreed to keep its liquidity facility for PPP open through June 30.
“There’s a lot of bipartisan support for PPP, and small businesses are in trouble,” Arora said.
