Major Banks Are Opting Out The SBA’s Direct Loan Forgiveness Process
At least three major banks have decided not to allow their customers to get their PPP Loans directly forgiven through the new SBA portal. This leaves business customers with no recourse if the banks refuse to forgive their loans or drag out the process.
JPMorgan Chase, Bank of America, and PNC have all decided to opt out of the program. As of the end of May, these lenders were numbers one, two, and eleven respectively in the program.
So far, lenders only representing half of the outstanding PPP Loans are participating.
Banks were incentivized to issue the loans, given the fees that they were paid, but they aren’t receiving anything to handle the forgiveness process. Since there’s no incentive to get them forgiven, most banks are understaffing their forgiveness divisions on purpose, leading to long waits and major communication problems.
What many don’t know is that participation in the government program is voluntary. Banks actually have to opt in to allow their customers utilize the SBA forgiveness portal.
The problem that the banks are having with this is academic.
Lenders participating in the forgiveness portal are still responsible for reviewing and issuing the forgiveness decisions to the SBA. They still need to make sure that borrowers meet the loan eligibility and forgiveness requirements whether they use the SBA portal or not.
As such, many banks have chosen to just use their own processes.
This means that many entrepreneurs may not be able to get some or all of their loans forgiven. Banks have been contacting customers and informing them that they shouldn’t have received their original loan amount. Even though the banks originally approved these loans and sent the money, they are saying that many of the amounts were wrong.
If this happened to you, whether you spent the money correctly or not, you won’t be able to receive full forgiveness.
At this point, if you try to use the SBA portal and are refused, you’ll now know why.
Let me leave you with this.
Chicago Aldermen and State Lawmakers have raised substantial concerns about the CPS fall reopening in a letter to the mayor. Concerned about the Delta Variant and its stronger transmission rates among unvaccinated children, the letter urges the mayor to take many additional safety precautions prior to a resumption of in-person learning on August 30th.
Those recommendations include,
1 – Having teachers and support staff members who are medically unable to return to school buildings fill positions in the new “Virtual Academy” for medically fragile students
2 – Keeping unvaccinated students 3 feet apart
3 – All persons exhibiting symptoms would be directed to quarantine, regardless of their vaccination status
4 – Conducting home visits around the year to engage families and improve attendance
5 – Hiring more clinicians. special education teachers, and support personnel to help students transition back to the classroom
6 – Completing a fall agreement between the city and CPS
This letter was signed by 23 Aldermen and 26 General Assemblymen. Does any of this seem impossibly ridiculous to anyone?
How are you possibly going to keep 5 year-olds three feet apart? How are you going to conduct home visits when you can’t even get teachers into classrooms to begin with? How are you going to hire more people when the system is already at a deficit?
Here’s my favorite. Let’s just hammer out an agreement, as if that would be easy. This smells like what PR people call “context”.
It sounds like a great reason for the union to call another strike.
I’m writing about this so that you can be ready. If the kids stay home another year, that will obviously turn the lives of parents upside down again. It’s hard enough operating a business in these trying times, but guess what. Now you also have a child care problem?
Let’s play a game of chess and think three or four moves ahead. August 30th they resume in-person learning. You cram 340K kids, most of whom are unvaccinated, into the crowded Chicago Public schools, and what do you think will happen?
Do you think that the daily C-19 new case average is going to go down? Are you kidding me? The child catches it at school, and brings it home for the whole family. Forget about it, and this won’t only be in Chicago. It will cover the entire state and millions of students.
Skyrocketing daily new case averages will be the only thing necessary for them to start shutting things down again. They may be put into a position where they have no choice.
Be ready. Fall is coming.
We’re all going to get through this. Let’s get through it together.
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