The Philadelphia Business Journal published an article that I would like to share with you entitled SBA has opened its PPP forgiveness portal. Here's why many small businesses will have to wait. Author Andy Medici explains why some small businesses may have to wait to submit their Payroll Protection Program (PPP) loan forgiveness applications.

Although the Small Business Administration (SBA) officially opened its forgiveness portal to lenders on August 10, many lenders will likely wait, according to banks and experts. That is because the potential for shifting guidance, new legislation, and a desire to fully prepare for a flood of applications means banks have little incentive to launch right away.

Wells Fargo said in a statement it was waiting on additional guidance from the SBA regarding forgiveness and couldn't confirm a date when it will begin processing forgiveness applications. JPMorgan Chase & Co., the largest single processor of PPP loans, said it would not have its forgiveness process up and running until late August or early September.

Bank of America also was not accepting forgiveness applications, saying it was "communicating directly with clients with additional instructions on how and when to apply.” Truist Bank and PNC Bank both said they would begin accepting forgiveness applications from small businesses later this month.

Those five banks, the top five PPP lenders by total dollar amount, accounted for 968,109 PPP loans through July 31, according to SBA data, or about 19% of the more than 5 million PPP loans made through that date. The SBA approved a total of $521.3 billion in PPP loans through that date.

Richmond, Virginia’s Atlantic Union Bank, which processed an outsized number of PPP loans for a bank its size, said it would begin accepting forgiveness applications on August 19, with CEO John Asbury saying they are live testing the portal.

“We will send email invitations to PPP borrowers to begin the forgiveness process, and will do so in daily batches in order of the loan funding date [with the earliest first],” Asbury said in an email, but added if forgiveness rules change, they will update the portal accordingly. “We are watching the pending legislation in Congress with great interest as it could substantially reduce the forgiveness application process, particularly for loans less than $150,000 if passed.”

Automatic loan forgiveness for smaller loans is just one of the many changes Congress is contemplating for the PPP, which includes different streamlined loan forgiveness rules depending on the size of the loan, the ability for some small businesses to draw extra money on their first PPP loans and the ability to get an expanded set of costs forgiven, among others.

JPMorgan stated that while it was monitoring Congress, it would not wait for legislation as it builds its portal. However, if loans below $150,000 were automatically forgiven, that would account for about 90% of its PPP loans.

We will continue to update you on new developments. Please visit our COVID-19 Resource Page for more alerts.

Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at Richard.Higgins@MCC-CPAs.com. I can be reached at Marty.McCarthy@MCC-CPAs.com. As always, we are happy to help.