In the first six weeks of operation, the U.S. Small Business Administration said more than one million paycheck protection program borrowers have requested direct remittance through a new portal.
Agency officials said the step highlights the effectiveness of the more streamlined process, introduced on August 4 to speed up approvals.
“Our innovative direct forgiveness portal is helping our PPP borrowers get back to doing what they do best – creating jobs and fueling our country’s economy,” SBA administrator Isabella Guzman said in a statement.
In Arkansas, the SBA has granted forgiveness on 41,121 loans, reaching nearly $ 3 billion, through June 30, according to agency records. The SBA has approved 77,073 paycheck protection loans in Arkansas for a total of $ 4.7 billion.
Arkansas forgiveness figures, however, do not include approvals that have been granted since the portal opened last month. “We’re on the right track with the national average and, with a straightforward pardon, I think we’re going to see those numbers increase quite significantly,” said Edward Haddock, SBA district director for Arkansas on Friday.
The direct remittance portal allows borrowers to bypass lender certification and enter paycheck protection program loan data and submit a request for approval. The portal uses a proprietary, artificial intelligence-based platform that is able to quickly determine if a loan is approved, Haddock said.
Previously, borrowers had to compile documents, submit them to their lender for review, and the bank would then conduct a more in-depth review before submitting the application to the SBA.
The Forgiveness Portal is simpler and more efficient, according to Haddock. “It has given the banks a great deal of relief from having to create their own PPP review process,” he said. “We automate the process on behalf of the bank so they don’t have to invest money in it.”
Banks must register and authorize their customers to use the direct forgiveness portal. The system is mainly used by small lenders who used a manual approval process or by banks with limited resources to invest in building a fully automated infrastructure.
According to Haddock, large institutions do not participate because they already have effective systems.
Arkansas Capital Corp. of Little Rock opted for its small business borrowers to submit applications directly.
“For us it was really about efficiency,” said Bert King, senior vice president. “SBA handles authentication and submission, which makes our job a lot easier. “
Arkansas Capital issued approximately 1,200 paycheck protection program loans in two rounds of funding in 2020 and this year.
The pardon approval is working well, King said, noting that the lender approved around 750 loans in the first program cycle in 2020 and 720 of them were granted pardons. “Our approval was 95% in the first round,” King said.
Simmons Bank has not opted for the portal, officials said on Friday. The bank already had a well-run system that paycheck protection program borrowers were accustomed to using, CFO Jay Brogdon said.
“It’s great that SBA has launched this portal, but by the time SBA made this portal available, we already had a portal available to our customers,” Brogdon said on Friday. “It’s very efficient and it’s basically the same, it’s just a Simmons portal. Our clients love it and our lenders love it.”
Customers are used to the existing system, Brogdon said. “It would have created a lot of confusion for our customers to replace an already functional portal with a new one,” he said.
Brogdon said Simmons was moving quickly to get approval for the pardon. Statistics up to June 30 show that Simmons issued $ 976 million in the first round of Paycheck Protection Program loans and that all but $ 141 million have been forgiven. Loan information provided by the bank shows a steady improvement in forgiveness approvals – $ 429 million in program loans were released from the first quarter to the second.
“When you extrapolate that to the third quarter, it won’t be much longer,” said Brogdon. Simmons will release new numbers after the current quarter ends on September 30. “I think we are a lot like the industry in terms of forgiveness trends.”
Lenders initially focused on securing forgiveness for the program’s first round of loans, as most are over a year old. The second round of loans was not closed until May 31, the latter part of the second quarter.
The SBA reports that lenders who choose to allow their borrowers to access the new portal have doubled from 600 when the portal opened to more than 1,400 today.
Paycheck Protection Program borrowers can for the first time complete a forgiveness application using a smartphone, the SBA said. The portal is available to eligible borrowers at directforgiveness.sba.gov.