Small Businesses, in a Holding Pattern, Agonize Over PPP Loan Forgiveness

The Paycheck Protection Program pumped $525 billion in forgivable loans to small businesses from early April through early August. The program has been praised for saving jobs and buoying struggling businesses and criticized for its clumsy rollout, fraud, and for favoring companies with established banking relationships over underbanked ventures. In a recent report, the Government Accountability Office urged the Small Business Administration to identify and respond to multiple PPP risks among other recommendations for other agencies to improve the government's response to the pandemic.

One reason the PPP was so attractive to borrowers was the potential to turn loans into grants. For that to happen, each borrower needs to complete a forgiveness application and submit it to their lender, who can work with them to make it stronger. Then the lender needs to submit the application to the SBA. The agency has up to 90 days to review it and make a decision. The SBA began accepting forgiveness applications on Aug.10.