After the bank originally issued him a $6,812 PPP loan, he was later told he was only eligible for $1,795.53 in forgiveness. That’s what happened to Warren Davis, owner of fundraising consultancy Warren Davis Consulting, LLC, who received his loan from Chase and was recently told the bank won’t let him seek forgiveness directly from the SBA. But many told The Intercept that they used the money correctly and had fully expected to have their entire loans forgiven. Some banks have been contacting small business owners in recent months and telling them that they shouldn’t have received the original amount they received - which the banks themselves approved - and requiring the owners to pay back the difference. Related Banks Are Reversing Course on PPP Loans to Small Business Ownersįor some business owners, being cut off from the SBA’s direct program could mean they can’t get some or all of their loans forgiven at all. In an email sent to a small business owner, it said simply, “e’re continuing with our simple process and not participating in the new SBA direct program.” In response to a request for comment, a Chase spokesperson said over email, “Chase customers should submit their forgiveness applications through our platform,” adding, “We have a simple process that takes under 10 minutes to complete.” We would therefore still need to ensure borrowers meet loan eligibility and loan forgiveness requirements regardless of whether we chose to use the SBA forgiveness portal or not.”Ĭhase offered no explanation in its correspondence to its customers. When asked for an explanation as to why the bank decided to bar its customers from the SBA’s direct forgiveness option, a PNC spokesperson pointed to a statement that said, “enders that participate in the SBA’s forgiveness portal are still responsible for reviewing and issuing forgiveness decisions to the SBA. In a statement, SBA Associate Administrator for the Office of Capital Access Patrick Kelley said, “We encourage all lenders to opt-in to this tested portal.” He noted that lenders continue to opt in and that the agency is conducting outreach to encourage them to participate. “Forcing lenders to opt-in to the process, could have been disruptive,” said SBA spokesperson Terrence D. And at least three major ones have refused. Congress had, at one point late last year, considered automatically forgiving all loans under $150,000, but it never followed through.īut there was fine print in the SBA’s recent announcement that many may have missed: Banks actually have to opt into the direct process for small business owners to access it. In response, the Small Business Administration, the government agency tasked with running the program, announced in late July that it would offer small business owners who took out PPP loans of $150,000 or less a way to bypass intransigent banks and seek forgiveness directly from the agency. ![]() ![]() Of the total PPP loans that have been issued, less than half have been forgiven thus far. Banks were incentivized to issue PPP loans through the fees they generated, but they don’t receive any fees to push forgiveness through, and they’ve dragged their feet. The loans were made with the promise that they would be forgiven and essentially turned into grants if used properly.īut many small business owners have struggled to get their loans forgiven by the banks that issued them. “Now you guys want to come back at me for it.”Įarly in the pandemic, small business owners were urged to flock to the Paycheck Protection Program. “It’s PNC’s fault I got this money,” he said. ![]() Grund still hasn’t had his $5,000 PPP loan forgiven and was instead told by PNC that his “Correct Maximum Loan Amount” was just $917, leaving him on the hook for the rest. PNC recently sent an email to Jesse Grund, owner of personal training studio Unconventional Strength in Orlando, Florida, saying, “Considering we have already built a streamlined end-to-end digital portal and associated review process for your PPP forgiveness application we will be opting out of using the SBA’s forgiveness portal.” All told, lenders representing just half of all outstanding PPP loan forgiveness applications have opted in, according to the SBA. As of the end of May, JPMorgan Chase was the top PPP lender, followed by Bank of America in the No. They are major players in the program, which Congress created to offer businesses loans to spend on payroll and other qualified expenses to help weather the shutdowns.
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