Lingering Problems Causing Delays in Approval of PPP Loans: Trade Groups
“CUNA member credit unions continue to be challenged by a slow approval process."
The re-invigorated Paycheck Protection Program remains beset with problems that are keeping small businesses from obtaining much-needed assistance, trade groups representing credit unions and accountants said this week.
“CUNA member credit unions continue to be challenged by a slow approval process,” Lance Noggle, the trade group’s senior director of advocacy and counsel, told the Small Business Administration this week.
NAFCU noted problems with the program as well. “We have heard that the loan forgiveness process is still in need of administrative simplification and there has been an inconsistency in length of time SBA is taking to administer forgiveness,” Brad Thaler, NAFCU’s vice president of legislative affairs, wrote in a letter to leaders of the House Small Business Committee this week.
The SBA currently is managing the second round of PPP lending. The agency said that as of Jan. 31, it has approved 891,044 loans during the second round of lending. Almost $73 billion in loans have been approved by 4,942 lenders, the agency said. At the same time the SBA is approving new loans, agency officials have still been managing the loan forgiveness process for loans made in the first round.
Noggle said CUNA members are noting several errors in SBA processing of loans, including whether the borrower is alive or dead, the number of employees an applicant may have and whether a borrower’s first loan has been forgiven.
In addition, Noggle said, credit union employees say they have been told that there is a backlog of several weeks when they call the SBA about problems with the program.
The American Institute of Certified Public Accountants also reported major problems with the second round of PPP lending. Borrowers are anxious about the delays in loan approval, Barry Melancon, the group’s president/CEO, told the SBA this week.
“We also believe that broader communication from the SBA confirming that there is sufficient funding to support all Draw One and Draw Two loan requests, along with clear communication that processing time could be one to two weeks due to the increased validation checks and reviews, will greatly reduce anxiety with small businesses,” he said. He added that it also would be helpful if policymakers made it clear there will be enough money to make loans through the end of the program on March 31.