With the second round of the Paycheck Protection Program (PPP) underway, small businesses that are struggling financially are eager to access additional funding, including many who took advantage of the first PPP round. But before applying for a “second draw” some of them need to clear up discrepancies in their first PPP loan.
According to loan reviews conducted by the U.S. Small Business Administration (SBA), approximately 4.7% of first round PPP borrowers have “anomalies” in the supporting documentation submitted by lenders. These problems are mostly data mismatches and eligibility issues, and must be resolved before the borrower can apply for a second PPP loan. To speed the process and allow these borrowers to apply for a second draw, the SBA is taking steps to make the review process more efficient. The SBA will:
- Host a national call to brief lenders on the PPP platform’s additional detailed information that will assist in the resolution of first-draw PPP loan review and potential holds that impact second-draw PPP loan application approvals.
- Equip the agency’s field team of lender relations specialists with information so they can provide support to lenders and borrowers in understanding the issues and facilitating the appropriate responses to resolve.
- Provide additional guidance to PPP lenders on the review and resolution process.
The SBA reports that they have approved more than 400,000 second round PPP loans since January 11, totaling $35 billion, with an average loan amount of $87,000. The SBA and U.S. Treasury has a total of $284 billion available for the new program, which runs through March 31, 2021.
If you are dealing with a first round PPP loan that is under review, or need assistance applying for a second round PPP loan, we can help. Please contact Gray, Gray & Gray at (781) 407-0300.
You can also access the recording of Gray, Gray & Gray’s January 26th “PPP Round Two: More Relief is on the Way” webinar here.