In the latest version of the popular program, SBA worked with a contractor to develop an entirely new interface for banks. Although it appears to be working better than before, Monday’s letter showed that creditors are facing a new set of technical problems.
The issue concerns requests from companies that received PPP loans last year and are now applying for a second round of aid, which was authorized by economic relief legislation enacted in December.
Nichols said that the application portal Paycheck Protection was not allowing banks to submit second drawing loan applications if a company previously requested forgiveness of its first PPP loan and that application is still pending at the SBA. It is a problem because the program rules do not require forgiveness of the initial loan as a prerequisite for seeking a second loan.
“This technical error is leading the SBA not to approve a significant number of second draw loans,” said Nichols in the letter. “We urge the SBA to correct this technical error and allow the lender to upload the borrower’s second draw PPP loan application, regardless of the borrower’s first draw loan forgiveness status.”
In the letter, Nichols said the group of bankers was trying to signal problems “which we believe are systemic and require the immediate attention of their agencies to ensure that struggling small businesses can access this important federal lifeline.”
He also cited concerns that lenders are receiving a large number of incorrect error messages when supporting PPP loan applications through the SBA portal, including messages that indicate incorrect limitations on loan amounts or that the first loan from The borrower’s PPP is under review when it is not.
“In addition, attempts to obtain clarification from creditors through the portal’s messaging system have been met with silence,” said Nichols.
SBA and Treasury spokesmen did not immediately respond to requests for comment.