P3 portal problem ruins second-draw loans, advocacy group says


The Paycheck Protection Program (PPP) portal does not appear to allow lenders to download a borrower’s request for a second draw if that borrower’s first draw rebate request is still pending, said Rob Nichols, President of the American Bankers Association (ABA). wrote monday in a letter to the heads of the Small Business Administration (SBA) and the Department of the Treasury.

But one provisional final rule the issued SBA does not mention surrender of the first draw as a prerequisite for obtaining a second draw loan, Nichols wrote. Second-draw applicants need only certify that they have spent or intend to spend all of their first-draw funds by the time they receive a second infusion of funds, he wrote, citing the rule.

“This technical error leads the SBA to fail to approve a significant number of second-draw loans,” Nichols wrote, urging the agency to correct the portal’s user experience so that lenders can download borrowers’ second-draw requests. “independently” of the delivery of the first draw. status.

Nichols also reported that “Lenders receive a high number of incorrect error messages” when trying to submit claims through the portal, including messages indicating incorrect limits on second draw loan amounts or that the A borrower’s first draw is being considered when he is not.

“Attempts to obtain clarification from lenders through the portal’s messaging system have met with silence,” Nichols wrote. “Clear and specific guidelines on loan size restrictions, such as why a loan limit of $ 30,000 per employee was implemented, will allow for a more efficient loan origination process.”

The SBA worked with an entrepreneur between the end of the first iteration of PPP in August and its relaunch on January 11 to develop a new interface for banks on the portal, Politico reported. SBA and Treasury spokespersons did not immediately respond to the publication’s requests for comment.

Former President Donald Trump signed a bill at the end of December that went back and forth $ 284 billion in PPP, which has reopened in stages since January 11 – first to community development financial institutions, minority deposit-taking institutions and certified development companies, then to lenders with $ 1 billion or less in assets and, finally, to all lenders on January 19.

The program is open until March 31, but second-draw requests for loans of up to $ 2 million are limited to businesses with 300 or fewer employees who may show a 25% drop in revenue over the course of the program. any quarter of 2020 from the same quarter of the previous year. Additionally, $ 15 billion of program funding is reserved for lenders with less than $ 1 billion in assets, and an additional $ 15 billion is reserved for those with less than $ 10 billion in assets.


Previous What the coronavirus boost means for your student loans
Next Modern Tillful Small Business Lending Platform Facilitates Over $ 10 Million In Loans