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In the latest version of the popular program, the SBA worked with an entrepreneur to develop a whole new interface for banks. While this seems to work more smoothly than before, Monday’s letter showed that lenders face a whole new set of technical issues.
The problem is with applications from companies that received PPP loans last year and are now seeking a second round of aid, which was allowed under the economic aid legislation passed in December.
Nichols said the Paycheck Protection application portal does not allow banks to submit second-draw loan applications if a company has previously requested the cancellation of its first PPP loan and the application is still pending with the SBA. This is a problem because the program rules do not require that the original loan be canceled as a prerequisite for finding a second loan.
“This technical error leads the SBA to not approve a significant number of second-draw loans,” Nichols said in the letter. “We urge the SBA to correct this technical error and allow a lender to download a borrower’s second-draw PPP loan application regardless of the status of the borrower’s first-draw loan forgiveness request. “
In the letter, Nichols said the banking group is trying to flag issues “which we believe are systemic and require the immediate attention of your branches to ensure that struggling small businesses can access this important buoy. federal bailout ”.
He also raised concerns that lenders receive a large number of incorrect error messages when they support PPP loan applications through the SBA portal, including messages indicating incorrect limits on the loans. loan amounts or the fact that a borrower’s first PPP loan is under review when it is not.
“Further, attempts to obtain clarification by lenders through the portal’s messaging system have been met with silence,” Nichols said.
Spokesmen for the SBA and Treasury did not immediately respond to requests for comment.
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