Of all the lending programs in banking history, the Paycheck Protection Program (PPP) has to be one of the most complicated ever to enthrall bankers. Consider that in the next couple of weeks, banks will be: originating the second draw of PPP (PPP2) under new guidelines; originating PPP loans under the initial set of guidelines (PPP1) to include some amendments; amending PPP1 to accommodate larger amounts; forgiving PPP1 loans and setting up to forgive PPP2 loans. It is enough to make even the most organized banker’s head spin.
The new split bipartisan Covid Relief Bill got traction yesterday and stands a good chance of getting approved in the next couple of weeks. Most versions of a new stimulus package contain the approval for the next draw of the Paycheck Protection Program (PPP). The SBA, in turn, is preparing to bring the program live around mid-January.
Last Friday night, the SBA released the long-awaited Paycheck Protection Program (PPP) application, and while it clarified some aspects of the program, its complexity also surprised many bankers. In the SBA’s defense, it is hard to strike the right balance of speed to market, simplicity, and breadth of idea inclusion, so overall, we must give the SBA high marks for this effort. Despite those marks, we have identified 15 areas where banks will need to focus on providing further education, process, or technology to make the process as efficient as possible.