WASHINGTON—The Treasury Department said it plans to begin forgiving loans granted to small-business owners under the Paycheck Protection Program later this week or early next week, following complaints from both financial institutions and borrowers that the process has become bogged down.
A Treasury spokesperson said the applications are generally expected to be approved quickly, with the exception of loans above $2 million that will get added scrutiny, according to the Wall Street Journal.
“The ultimate success of the program will depend on forgiveness, so small-business owners are eager to learn of [Treasury officials’] decisions,” Kevin Kuhlman, senior director of government relations for the National Federation of Independent Business, told the Journal.
Since it launched an online portal for loan forgiveness in early August, the Small Business Administration has received more than 96,000 applications from businesses seeking to have their loans forgiven—but none had been approved, William Manger, SBA’s chief of staff and associate administrator, told House lawmakers last week, the Journal reported.
Those applications represent roughly 2% of the 5.2 million loans, worth $525 billion, issued under the program before it expired on Aug. 8, the report added.
“The Treasury’s announcement comes amid a crescendo of calls for additional small-business assistance as many continue to struggle with the impact of the COVID-19 pandemic,” the Journal noted.
Both CUNA and NAFCU have consistently called for simplification of the PPP loan forgiveness process.