SBA announces steps to improve PPP review process

By Jeff Drew

The U.S. Small Business Administration (SBA) said Tuesday that it is taking steps to improve the agency’s first-draw Paycheck Protection Program loan review process so that small businesses seeking a second-draw loan have as much time as possible to access those funds.

The SBA’s reviews of initial-draw PPP loans have found anomalies — mostly data mismatches and eligibility concerns — in about 4.7% of the data submitted by lenders. In those cases, the SBA said in a news release, lenders and borrowers will be required to “follow up” before borrowers can access a second-draw PPP loan.

The PPP reopened Jan. 11 with $284 billion in funding for forgivable loans. The SBA will accept applications until March 31 — or until funds run out, an outcome that is not expected at this time.

From Jan. 11 through Jan. 24, SBA approved more than 400,000 loans for $35 billion, according to an agency report. The average loan size is $87,000.

More than 4,500 lenders have participated in the second iteration of PPP, compared to the nearly 5,500 that made more than 5.5 million loans totaling nearly $588 billion during the first iteration of PPP last year.

Bank of America has made the largest number of loans (12,353) followed by Cross River Bank (11,207) and fintech Biz2Credit (10,912 through its funding subsidiary, Itria Ventures LLC). Biz2Credit, which also ranks sixth in total amount loaned at $449.7 million, runs the CPA Business Funding Portal with the AICPA and A table listing the top lenders is available at the bottom of the article.

The SBA said it is taking the following steps to allow for second-draw PPP loan applications to be processed in an efficient manner:

  • 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.
  • SBA will 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.
  • SBA will provide additional guidance to PPP lenders on the review and resolution process.

Tuesday’s SBA announcement came the day after the American Bankers Association sent a letter to Treasury and the SBA asking them to address three “significant issues” banks have encountered that are preventing them from making PPP loans. Specifically, the ABA letter said:

  • The SBA’s PPP portal does not allow a lender to upload a borrower’s application for a second-draw PPP loan if the borrower has submitted a first-draw PPP loan forgiveness application that is still pending with the SBA. However, the interim final rule for second-draw loans appears to allow borrowers to apply for a loan if they can certify that they have spent or intend to spend all first-draw funds by the time they receive a second-draw loan.
  • More broadly, the ABA letter said, lenders are receiving a high number of incorrect error messages when they attempt to submit PPP loan applications through the portal. Error messages that banks have received may state incorrect limitations on second-draw loan amounts or that a borrower’s first-draw loan is under review when it is not under review. Additionally, attempts to get clarification by lenders via the portal’s messaging system have not been answered.
  • Another issue relates to the documentation required to show a 25% revenue reduction for second-draw loans. Guidance released early last week provided examples of what information would satisfy these requirements, but many banks had completed borrower applications prior to their release (relying instead on earlier guidance). The ABA letter asks Treasury and SBA to clarify that borrowers and lenders are able to rely on the guidance at the time the loan application is received by the lender, thereby saving small businesses countless hours of redoing applications for second-draw loans.

AICPA executives will discuss the latest PPP issues during an online Town Hall on Thursday at 3 p.m. ET. The event is free for AICPA members and $39.99 for nonmembers.

Top PPP lenders for 2021 PPP

Top PPP lenders for 2021 PPP

Source: SBA.

AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members. Go to the AICPA Town Hall Series webpage for more information and to register.

The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA,, and fintech partner Biz2Credit.

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

— Jeff Drew ( is a JofA senior editor.

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