Why Thoroughness and Accuracy are the Keys to Having Your PPP Loan Forgiven

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noviembre 10, 2020 | Escrito por Alan Lane-Murcia, gerente del programa de la SBA

Paycheck Protection Program (PPP) loans were Small Business Administration (SBA) loans authorized through the CARES Act that helped American businesses cover up to eight weeks of payroll, rent and utility expenses and interest on mortgages during the first stages of the pandemic.

With no fees, collateral or personal guarantees required and interest rates of 1%, PPP loans were essential in keeping thousands of companies from laying off employees or going out of business altogether. Most importantly, borrowers could have their PPP loans forgiven prior to maturity by applying to the SBA, verifying that all employee retention criteria were met and that funds were used for eligible expenses.

Sounds simple enough, right? Not exactly.

Since PPP loans were first announced, financial lenders around the nation scrambled to get their clients’ applications in and approved. What was initially an “all hands on-deck” situation has since calmed as loans were approved, businesses reopened, and the world slowly shifted into a new normalcy.

As one of the nationally recognized SBA lenders in the United States, First American Bank swiftly assembled a dedicated team of experts to provide its clients clarity and confidence while navigating the loan application process. In present day, we now dedicate ourselves to the loan forgiveness process. Our experts include the bank’s senior analysts, lenders, and executives who have over a decade of experience in administering SBA loans.

With our team, we were able to successfully originate 2,247 loans accounting for over $400,000,000 funded. For reference, this approximated two years of loan production completed in a few weeks. With our greatest priority being to help our smaller business clients with the greatest need, well over half of our loans were under $50,000.

As we move forward, it is no secret that the SBA’s anticipated loan forgiveness process has been a moving target. As a result, many borrowers and lenders have struggled to determine exactly what steps they will need to follow to receive loan forgiveness.

With the SBA’s primary focus in the spring being to get funds into the hands of businesses that desperately needed them, determining how exactly those loans would be forgiven was left unfinished. Now that we have overcome the first hurdle, it is time to conquer the next. So, what exactly do we know about PPP forgiveness at this point?

For businesses seeking PPP forgiveness, the primary challenge is ensuring accurate documentation. Good recordkeeping is vital in receiving loan forgiveness, as well as, utilizing the right software to manage all the information. Clearer calculations translate into better reconciliation between a business’s supporting internal documentation and the SBA application, which means faster approvals for forgiveness.

We want all of our clients to receive the forgiveness to which they are entitled, so we are being extremely proactive in understanding and communicating the process. We will be diligent to ensure every forgiveness application is right the first time. Our software guides the customer’s filing so there is no question with the SBA about the forgiveness calculation.

First American Bank’s 15 years of experience as an SBA preferred lender is also key to ensuring maximum forgiveness for each of its clients. The bank has never taken a “one-size-fits-all” approach. This experience includes knowledge of all of SBA loan programs (e.g., 7a, Export Working Capital, CAPLines, Express, and International Trade loans) across all the bank’s business lending groups as well as knowing how to interpret the SBA’s rules and how to implement new guidelines.

The point of the PPP loans was for them to be forgiven if payrolls were substantially maintained. Our goal is to help all our customers have as much of their loan forgiven as possible so they can then shift their focus to their recovery. Customers have over a year from the time their loan was funded to apply for forgiveness. Therefore, the key to forgiveness is diligence, not haste. At First American Bank, we will not start processing the forgiveness of a loan until we have been provided a complete application. Once we have ensured accuracy and completion of supporting documentation after a thorough review process, we will pass it along to the SBA and await their final decision.

To speak with an SBA loan expert at First American Bank, contact us here.

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