The Small Business Administration said Tuesday that it has approved more than 400,000 Paycheck Protection Program Loans for approximately $ 35 billion since the program reopened on Jan. 11.
“Prior to this latest round of PPP, the SBA supported 5.2 million PPP borrowers and provided more than $ 525 billion in economic relief to small businesses and other eligible businesses,” Tami Perriello, SBA deputy administrator, said in a Tuesday Explanation.
SBA, she said, “is committed to ensuring compliance reviews are conducted on the front end. The SBA is also committed to addressing issues more efficiently to ensure fair and equitable access to small businesses in every community. “
The SBA said it is “immediately addressing” PPP loan verification to enable efficient second-draw PPP loan application processing by:
- Conducting a national call to provide lenders with additional information to help resolve the first-drawing PPP loan check and potential holds affecting the approval of second-drawing PPP loan applications;
- Providing the Agency’s field service team with information to help lenders and borrowers understand the issues and provide the appropriate answers to resolve them; and
- Providing additional guidance to PPP lenders on the review and settlement process.
SBA said its review of initial PPP loan drawdowns identified anomalies – mainly data mismatches and eligibility concerns – in approximately 4.7% of the data submitted by lenders.
“These concerns require follow-up between the lender and the borrower so that borrowers can access a second round of loans,” SBA said.
The SBA said it is taking “steps to improve” the review of initial PPP loans so that small businesses have as much time as possible to access PPP funds.
The Biden-Harris administration is working with SBA “to find immediate solutions to improve eligibility, compliance, integrity and promote transparency,” said SBA.
Initial Draw PPP Loans are intended for borrowers who did not receive a PPP loan prior to August 8, 2020.
Second Draw PPP Loans are for eligible small businesses of 300 employees or fewer who previously received a First Draw PPP Loan.
“These borrowers must use or have used the full amount of their First Draw loan only for approved uses and demonstrate a reduction in gross earnings of at least 25% between comparable quarters of 2019 and 2020,” the SBA stated. “The maximum amount of a PPP loan for the second drawing is $ 2 million.”