clipboard with loan application on it

The Paycheck Protection Program loan forgiveness process is facing delays and complications as banks grapple with unresolved questions and what many describe as conflicting information, according to a report Sunday by Politico.

More than 5 million small- to medium-sized businesses, including many long-term care operators, received $525 billion over the course of four months from the PPP, a pandemic-relief initiative passed by Congress in March. Yet as of Thursday, the Small Business Administration program, which promised loan forgiveness as long as businesses used 60% toward payroll and 40% to other allowable expenses, has yet to accept or reject any of the 96,000 received forgiveness applications.

Banks, which loaned their own money with the expectation that it would be repaid by the government, have been submitting applications for loan forgiveness to the SBA since Aug. 10. But many lenders told the news outlet that the agency has been silent on whether any of the applications will be accepted.

The warnings from lenders are raising new doubts about the implementation of the small business rescue effort, which was seen by many as a success.

The delay also is causing issues for business owners who are urgently trying to complete the loan forgiveness process as they work to sell their businesses amid ongoing fiscal pressures from the pandemic. 

Adding to the frustration is a growing list of unresolved questions from banks about how to handle forgiveness applications. Banks say they have gotten conflicting information from various SBA officials. 

“Unless we get something both from a legislative perspective and from the Treasury and SBA to make this process a little easier, it’s going to be a struggle,” Naeha Prakash, associate general counsel of the Bank Policy Institute, told Politico.