To streamline Paycheck Protection Program (PPP) loan forgiveness applications from small borrowers, the U.S. Small Business Administration (SBA) has launched a direct forgiveness portal.

The intent of the portal is to help PPP borrowers move quickly through the loan forgiveness process so that they can focus on operating and growing their businesses. The portal provides easy access to direct loan forgiveness through the SBA to the more than 6.5 million small business borrowers with PPP loans of $150,000 or less.

To use the portal, the borrower’s lender must have opted into the direct loan forgiveness program and currently, more than 600 banks have done so. Lenders can opt into this program at: https://directforgiveness.sba.gov.

Background on the PPP

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created the PPP in March 2020. It allowed the SBA to provide forgivable loans to qualified businesses that were impacted by the COVID-19 pandemic. Under the PPP, up to 60% of a loan could be used for payroll costs and up to 40% applied toward non-payroll costs such as rent, utilities and mortgage interest payments. The SBA reports that 93% of outstanding PPP loans are for $150,000 or less.

Additional funding to small borrowers was issued in late 2020 through the Consolidated Appropriations Act of 2021 which introduced the Economic Aid Act. It also extended the PPP loan program to March 31, 2021. The second PPP program draw was limited to borrowers with no more than 300 employees and it required that they demonstrate at least a 25% reduction in revenues in at least one quarter in 2020 when compared to prior quarters.

A COVID Revenue Reduction Score replaces the need for the borrower to provide documentation for the 25% revenue reduction. The SBA recognized that many small borrowers are unable to provide a profit and loss statement.

How Borrowers Can Use the SBA Loan Forgiveness Portal

  • Through the portal, the borrower must provide information normally required on Form 3508S (loans of  $150,000 or less).
  • If the borrower used a second draw of the PPP loan, they may upload documentation for the 25% revenue reduction requirement if not using the COVID Revenue Reduction Score.
  • After the borrower submits their application, their lender may approve or reject it, or require additional or corrected information.
  • Once the lender has approved the loan forgiveness, the SBA will review the forgiveness application.

The SBA is providing a live customer service team to assist borrowers and answer their questions. The customer service support line is available weekdays from 8:00 a.m. to 8:00 p.m. Eastern Time at (877)-552-2692. The SBA website also has a Direct Forgiveness Portal User Guide to help borrowers navigate the portal.

For questions related to PPP forgiveness applications or the new SBA forgiveness portal, please visit our PPP & ERC Services or call us at 617-738-5200.

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