The PPP program was created as an SBA-backed loan to help businesses retain employees throughout the COVID-19 pandemic. Small businesses across the United States have taken out millions of these loans to help keep them running during the pandemic. Now the banks and lending institutions need to figure out how to process the backlog of forgiveness requests efficiently. Most lenders do not have efficient technology assisting in gathering the supporting documentation. Meanwhile, the process of staying SBA compliant is a challenging one. Lenders are also stressed while working to fulfill the compliance of the Forgiveness Program and support their new 7A and 504 loans. This is creating an administrative nightmare as well as a poor customer experience.
Having the right technology and tools in place can help lenders simplify the process by streamlining documentation and while remaining SBA compliant. As lending institutions struggle to navigate the elements of the 3508(s) form and forgiveness process, it's important to consider the potential risks and challenges associated with the PPP forgiveness program.
Let’s take a look at some of the challenges currently faced by financial institutions and how modern technology can address these potential difficulties and concerns.
Obtaining Information Securely
Many banking and financial institutions struggle with obtaining information from borrowers in a secure, timely, and effective manner. Without the proper technology in place, it can be difficult for banks to gather appropriate data while simultaneously meeting the needs of their SBA customers.
Current systems and tools lack the necessary infrastructure to support relaying information between borrowers and lenders. Without these channels in place, it can cause various issues related to efficiency, customer experience, lost documents, and a lack of communication.
Banks often use proprietary systems or SAAS models that are not fully supported or lack the necessary data for communication between borrowers and lenders. As a result, lending institutes end up using email, phone, and FTP sites to retrieve information outside of traditional PPP systems. This can create a poor and inefficient customer experience for both lenders and borrowers.
Automation of Electronic Forms
Internal PPP software often fails to automate communication with the Guidehouse or SBA APIs. Using the right PPP technology can help capture and streamline the submission of data between banks and the SBA. As a result, the borrower and lending institution can’t expedite the forgiveness process with minimal system inefficiencies. The lender must manually type all the information into the SBA’s Forgiveness Portal.
Instead of spending countless hours using unreliable websites and ineffective loan forgiveness software—users can quickly submit information in a single application that eliminates redundancies and potential data errors.
As a result, platforms can solve many of the problems commonly encountered within the PPP loan forgiveness process.
Sending Data to the SBA
PPP loan accounting should be a simplified process in theory, but software and system issues can complicate problems. Although PPP loans have 5-year terms with a 1% interest rate—portfolio managers often have to perform calculations manually which takes additional time and effort.
If loans are fully forgiven only a single payment from the SBA needs to be posted to the original loan record. On the other hand, the SBA says loans that aren’t fully forgiven have to be serviced and all loans must be posted to 1502 reports and subsequent monthly reports. Using the right forgiveness software and technology can help to minimize these potential inefficiencies and documentation issues.
Simplify the Loan Forgiveness Process
Having the right technology in place can help lending institutions alleviate the problems commonly associated with gathering data and documentation. Using the right PPP systems software can ease the borrower experience as a means of streamlining the forgiveness process.
Using end-to-end SBA-specific software to service SBA 7A and PPP portfolios can help provide lending institutions with the confidence needed to meet SBA-specific guidelines and requirements concerning the 1502 Report. The PPP Forgiveness Portal is an application functioning seamlessly with Loan Manager accounting systems to help eliminate costly errors while improving audit guidance within existing Microsoft Windows environments.
By automating the submission process to the SBA lending institutions can save time and money while improving application and processing efficiency. With unlimited lender reviewers, a lender can mobilize many employees to help bolster the PPP Forgiveness Portfolio. Documents can be signed immediately using DocuSign technology and saved in Loan Manager. Protect your PPP guarantees, ensure audit compliance, and compile documents seamlessly using PCSF Solutions technology systems.
Why Choose PCSF Solutions?
PCFS Solutions provides end-to-end SBA-specific software solutions to help you service SBA 7A and PPP portfolios. Our proprietary system technology provides lender servicing teams, portfolio managers, loan operations, and executive teams with the support needed to meet SBA-specific requirements.
Eliminate costly accounting errors, lost guarantees, and gain improved audit guidance all while using your existing Microsoft Windows environments.
For more information about how PCFS Solutions may be able to help your team manage PPP and 7A SBA loans, set up a demo with one of our experts for additional guidance and support.
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Topics: PPP Forgiveness