By Regional Administrator Justin Crossie
SBA is determined to get critical funds to the smallest of small businesses through the Paycheck Protection Program (PPP). The Agency began accepting applications for the newest round of funding on Monday, April 27. In 24 hours, SBA approved 475,000 loans for $52 billion dollars, more than seven times the number of loans the Agency normally processes during an entire year, and nearly twice the dollar amount.
Today, April 29th beginning at 4 p.m. till midnight ET, SBA systems will only accept loan applications from lenders with asset sizes less than $1 billion dollars. We know many of our smallest small businesses rely on community lenders for their banking needs. To ensure access to the PPP loan program for the smallest lenders and their small business customers we are limiting access to the loan application portal. After midnight, these smaller lending institutions will still be able to submit PPP loans, outside of this time frame.
The first 24 hours the money became available, SBA had approved $28 billion from banks with assets less than $10 billion. This represents about 60% of the total amount approved the first 24 hours.
The CAREs Act second round of funding dedicated a $30 billion dollar pot of money exclusively for small banks. Because these funds were exhausted early, the Agency stepped in to ensure small banks and their small business customers were still able to get a piece of the pie.
As the small banks continue to submit applications the money will be pulled out of the larger pot of money available for all banks. Despite the challenges smaller banks are facing they are leading the way in this second round.
Additionally, the SBA and the Department of Treasury has noted the large number of companies that have appropriately reevaluated their need for PPP loans and promptly repaid more than $2 billion in loan funds in response to updated SBA guidance reminding all borrowers of an important certification required to obtain a PPP loan.
To further ensure PPP loans are limited to eligible borrowers, the SBA has decided, in consultation with the Department of Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application. Regulatory guidance implementing this procedure will be forthcoming.
Although the reserved processing time for small banks applies today April 29, 2020, SBA and Treasury will evaluate whether to create a similar reserved time again in the future.
SBA and Treasury continue to monitor loan system performance and will continue to provide frequent updates to the lending community.
For additional information and resources visit www.sba.gov/coronavirus, and please remember to follow us @SBAsouthcentral.
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