WASHINGTON–Financial institutions and small business borrowers continue to report difficulties navigating the Paycheck Protection Program loan forgiveness process, with the Consumer Bankers Association estimating that as many as 80% of forgiveness applications that have been submitted by small businesses are requiring additional follow-ups to reconcile errors or find missing information.
The EZ form, which allows businesses that meet certain qualifications to apply via a simplified process, is not as easy as advertised.
“Many of these are not simple issues to resolve, requiring an average of four to five communications between the small business and the bank to remedy the issue,” said CEO Richard Hunt. “The SBA EZ form is, simply, not easy for the overwhelming majority of small business owners and still requires the completion of some complicated calculations.”
As CUToday.info reported, a recent report from the Government Accountability Office revealed questions remain about the forgiveness process, pointing out that the Small Business Administration issued rules and guidance on a “rolling basis.”
The report added that “applying for loan forgiveness is more time consuming than applying for the PPP loan itself.”
‘Anxiety’ Created
The CBA noted it has joined with the International Franchise Association in requesting the Treasury Department and the SBA clarify and finalize all rules and guidance in the next wave of PPP enhancements before the program goes into effect.
Karen Kerrigan, president of the Small Business & Entrepreneurship Council, told MSNBC both banks and businesses are waiting for more clarity and potential changes to the process.
“Small business owners are keeping an eye out for additional changes to PPP and perhaps more guidance, including forgiveness simplification, and many have been advised to wait it out a bit longer — this of course has created some anxiety,” Kerrigan told MSNBC. “Banks are waiting for clarity, certainty and reassurance as well. Why expend significant resources on setting up a forgiveness system when there may be a legislative or rule change that enable a less bureaucratic and costly forgiveness system?”