Sba Approved Lenders For Ppp Loan – By John Reosti CloseText About John twitter reosti1967 linkedin john-reosti-55798a3b September 22, 2020, 1:35 p.m. EDT 4 Min Count
Many banks, tired of waiting for legal fixes, continue to process requests for forgiveness in the Paycheck Protection Program.
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Many lenders are further frustrated by the lack of communication from the Small Business Administration.
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Kittanning, Pa.-based NexTier Bank, with $1.6 billion in assets, filed its first 95 applications in September. 15, while the $2.2 billion Asset First Choice Bancorp of Cerritos, Calif., has processed nearly 200 applications in recent weeks. IncredibleBank of Wausau, Wis., with assets of $1.4 billion, has added 50 loans since the forgiveness portal opened in Aug. 10.
“As far as we know, no one has received a pardon,” Franko added. “There’s no question borrowers are tired of waiting. We have an automated system and everything can be done online.”
The SBA, which administers the Treasury Department’s program, declined to say how many applications were received or approved. The agency has 90 days to review the files and reach a decision.
Lenders are seeking several PPP changes, including simplified application forms and forgiveness for loans of $150,000 or less.
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The ball is still in Congress’s court – and that’s not a good reality for lenders. The proposed PPP reforms have so far been stymied by congressional gridlock over the new round of economic stimulus.
“Because there is little movement in that legislation, we are actively encouraging clients to start submitting applications,” said Dan Sullivan, group director of commercial banking at NexTier. About 87% of the 1,150 PPP bank loans will benefit from the general amnesty.
Treasury Secretary Steven Mnuchin told the House Financial Services Committee on Tuesday that his agency “encourages small businesses to apply and we’re working with the SBA to make sure they can apply.” as soon as possible.” He added that the Treasury “can provide small business tools to help [amnesty] for them.”
The Government Accountability Office said in a report released Monday that the SBA has received about 56,000 applications since Sept. way to check.
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“We are not aware of the SBA’s specific actions regarding the submitted applications,” said Eric Asgeirsson, president and CEO of CPA.com, the business and technology company of the American Institute of Certified Public Accountants.
The agency launched the forgiveness platform in July as part of a partnership with fintech Biz2Credit that is used by at least 40,000 PPP lenders, said Biz2Credit CEO Rohit Arora.
The GAO report, citing concerns from business groups, noted that the lack of clarity about amnesty has led to “driver fatigue about the program.”
“I’ve noticed fatigue in the process,” said Michele Vervlied, director of SBA operations at Customers Bancorp in Wyomissing, Pa. Borrowers “really want to do it, but they want to do it in the most profitable way for them.”
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Consumers say the SBA portal is easy to use, which encourages more borrowers to apply.
“We’re happy with the stage,” Sullivan said. “It only takes a minute or two to process the application. They’ve done a great job of simplifying the process.”
Lender Source, a non-bank SBA lender that has received about 22,000 PPP loans from community banks, said it has about 1,000 borrower applications in the works, an increase from 200 a week earlier, said Luke Lahaie, the firm’s chief investment officer. Loan Source uses a platform from Biz2Credit to manage its PPP portfolio.
PPP was closed on August 8 after its lending authority was revoked. Congress is considering several proposals to restart the program, but they have also been criticized as lawmakers struggle to compromise parts of the massive stimulus package.
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More than 100 trade groups, including the American Bankers Association, Independent Community Bankers of America and the Consumer Bankers Association, sent a letter to lawmakers last week urging automatic forgiveness of PPP loans. $150,000 or less. The union estimates that the streamlined process will eliminate $7 billion in administrative costs.
However, some lenders are advising borrowers to delay their applications due to the lack of communication from the SBA.
First Choice, for example, no longer encourages borrowers to apply while it waits for responses to applications it has already submitted.
Clients work with lenders with loans over $1 million to process applications. The company will open its portal to borrowers with loans of $ 250,000 or more on October 13. All other borrowers can enter the platform on October 27.
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Southern Bancorp’s $1.7 billion property of Arkadelphia, Ark., is also in a position to hold about 1,300 PPP loans it has made.
“We told the lenders that we think Congress will act, so we’re asking them to move forward,” said CEO Darrin Williams. “Many are content to wait and hope for some kind of solution.”
Small business owners can’t wait in Congress forever, which will force many lenders to decide whether to freeze or move forward, industry observers say. As banks face a wave of applications this spring from the U.S. Small Business Administration’s Loan Protection Program, the federal loan forgiveness process is starting to pick up speed, according to bank officials.
Nationwide, 5.2 million PPP loans worth $525 billion have been disbursed. Of those, about 4.5 million were for $150,000 or less, according to SBA data. In Missouri, approximately $9.2 billion was issued in 91,500 loans.
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There are only a few PPP loans processed by Legacy Bank & Trust Co. was held by the SBA in October, but this month is a different story, said Scott Tennison, senior vice president and director of guaranteed lending.
“November is a big month of forgiveness,” he said. “We’ve seen big days, anywhere from 20 to 25 loans a day being made by the SBA.”
Tennison said Legacy Bank has approved about 600 PPP loans worth $70 million. About a quarter of them, about $11 million, were held in mid-November, he said.
They come in all sizes. I wouldn’t say they chose small ones because we have very big ones here that have just been forgiven,” he said, noting that about 75% of the bank’s PPP loan amount is about $50,000 .or less.
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In early October, the SBA began accepting PPP forgiveness applications and sending forgiveness payments. Loan recipients have 10 months from receiving the PPP loan to apply for forgiveness, according to SBA guidelines. If the debts are not forgiven, the borrowers must repay their bank with 1% interest. Eligible expenses for loans are payroll, rent, mortgage interest, utilities and transportation.
Lenders have 60 days to submit applications to the SBA once they receive them from consumers. The SBA then has 90 days to make a final decision and send the money to the bank.
Since the deadline to apply for a PPP loan is August 8, Tennison said some borrowers could still use the money early next year. As a result, the SBA can still make a decision on amnesty applications until 2022.
Tennison said that three applications are available for borrowers, with the latest, Form 3508S, released in October by the SBA in order to reduce the burden of documents for businesses and auditors. It does not require a lot of information, such as calculating the amount of forgiveness. However, all forms require a different number of documents, he said.
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Although the forgiveness process for loans of $50,000 or less has been simplified and accelerated, the banking industry does not believe that the cap is enough.
“We would still like to see that increase to $150,000,” said Max Cook, president and CEO of the Missouri Bankers Association. “That would add another 900,000 borrowers or more to the total.”
“It’s all going to be tied to the other stimulus package that’s passed,” Cook said, noting that Congress is currently in a deadlock. “It takes legal action to do that, not the administration.”
Republican and Democratic leaders are trying to hammer out a relief deal ahead of the Jan. 20 inauguration of President-elect Joe Biden. However, disagreements continue over the size of the package and whether it includes a second round of stimulus checks for eligible Americans.
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“There’s a big difference of opinion there,” Cook said, adding that he doubted an agreement could be reached before the end of the year.
Amy Unser, vice president of loan management at Central Bank of the Ozarks, said the announcement of the forgivability process is obvious given the size of PPP loans in the system.
“It’s a work in progress,” he said. “We are awaiting guidance from the SBA on clarifying some of the rules and regulations, and documentation requirements.”
Lenders and SBA officials review, in part, the borrower’s calculations and supporting documents about the amount eligible for loan forgiveness, according to the SBA. Applications are also checked for the possibility of fraud.
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By mid-November, the Central Bank had processed about a dozen applications for amnesty, and
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