WASHINGTON–Applicants to the newest round of the Paycheck Protection Program continue to report a variety of glitches making it difficult to complete their applications and receive funds.
According to a roundup of issues reported by applicants by the New York Times, some applications were stalled for weeks by typos, while overzealous fraud filters trapped others and a change of taxpayer identification rules snarled many freelancers and sole proprietors. Thousands of PPP applicants have been turned down because they erroneously registered as having a recent criminal conviction, the report stated.
“It’s been a nightmare,” Martha Theirl told the Times. Theirl spent hours battling three levels of customer-service support at her bank in her attempt to get a loan for her physical therapy business.
Six weeks into the second run of the Paycheck Protection Program, $140 billion in emergency aid has been distributed by financial institutions to 1.9 million small businesses.
“But a thicket of errors and technology glitches has slowed the relief effort and vexed borrowers and lenders alike,” the Times reported. “Some are run-of-the-mill challenges magnified by the immense demand for loans, which has overwhelmed customer service representatives. But many stem from new data checks added by the Small Business Administration to combat fraud and eliminate unqualified applicants.”
Changes Announced
As CUToday.info reports separately, the Biden administration has unveiled a number of changes to address some problems and ensure that the most vulnerable small businesses get priority. For two weeks starting today, only businesses with fewer than 20 employees will be able to apply for loans. Under the general rules, businesses with up to 500 employees are eligible for aid.
Also, the Small Business Administration said it will revise the way loans are calculated so that sole proprietors and other self-employed individuals, who in the past were excluded for not turning a profit.
Numerated, a technology company that processes loans for more than 100 lenders, told the Times it still has around 10% of its applications snarled in error codes, down from a peak of more than 25%.
Approximately 5% of the 5.2 million loans made last year had “anomalies,” the SBA said.
Lending is scheduled to end March 31.