Banking institutions push Treasury, SBA to resolve ‘systemic’ small business bank loan glitches

In the most current model of the popular software, the SBA worked with a contractor to establish a full new interface for banking companies. While it seems to be doing work more smoothly than in advance of, Monday’s letter confirmed that lenders are dealing with a whole new set of technical problems.

The concern problems applications for enterprises that received PPP financial loans final calendar year and are now implementing for a 2nd round of support, which was licensed underneath financial reduction legislation enacted in December.

Nichols said the Paycheck Defense software portal was not letting financial institutions to post next-draw mortgage purposes if a business enterprise previously applied to have its first PPP financial loan forgiven and that application is still pending with SBA. It can be a trouble since the program’s principles don’t require forgiveness of the initial loan as a prerequisite for in search of a second personal loan.

“This technical mistake is leading SBA not to approve a major amount of 2nd Attract Loans,” Nichols said in the letter. “We urge SBA to correct this technical error and permit a loan provider to add a borrower’s second attract PPP bank loan application irrespective of the status of the borrower’s 1st Attract Financial loan forgiveness application.”

In the letter, Nichols said the bankers’ group was trying to flag troubles “that we believe that are systemic and call for the quick focus of your agencies to guarantee having difficulties small firms can access this crucial federal lifeline.”

He also cited worries that loan companies are receiving a substantial variety of incorrect error messages when they aid PPP financial loan applications by the SBA’s portal, which includes messages that point out incorrect limitations on mortgage quantities or that a borrower’s very first PPP loan is beneath assessment when it is not.

“Moreover, attempts to get clarification by loan providers via the portal’s messaging technique have been met with silence,” Nichols said.

Spokespeople for the SBA and Treasury did not promptly respond to requests for comment.