Small Business Administration Announces Changes to PPP Approval Process

February 11, 2021

The U.S. Small Business Administration (SBA) recently announced changes designed to reduce delays in the loan approval process for the Paycheck Protection Program (PPP), which reopened on Jan. 11 with $284 billion in new funding.

About 30 percent of applications in the new round of funding were rejected or required more documentation by the SBA’s E-Tran and PPP Loan Processing system due to issues related to additional validation checks for the detection of fraudulent applications. Common issues included lenders being unable to submit documentation or directly deal with errors, such as data mismatches, for applications that would have otherwise been approved.

To address the issue, the SBA announced it will now allow lenders to certify the eligibility of borrowers for both first- and second-draw loans directly and will not require lenders to submit supporting documentation of borrowers with validation errors until they apply for loan forgiveness. The SBA stated it will also create additional communication channels with lenders, including an immediate call with national lenders to brief them on the updates to the PPP’s platform.

The SBA approved nearly 1.3 million PPP loans totaling $101 billion between Jan. 11 and Feb. 7. The PPP will continue to accept loan applications through March 31.