Second Round of Nonprofit PPP Loans Falls Flat – WASHINGTON D.C. – The PPP lending program was scheduled to resume at 10:30 am EST on Monday, but the Small Business Administration’s (SBA) online portal seems to be having issues handling the demand. An industry source confirmed that the platform did open at 10:30 a.m. as planned, but was giving applicants an error message within four minutes. After placing a call to the SBA help desk, the source said the SBA system is down and they are unable to confirm loan numbers at this time, leaving bankers “on pins and needles.” Lockouts, login issues and sluggish systems marred the the re-opening with each bank unable to submit more than a few hundred applications. One bank was locked out of the system after submitting just 60 loans.
The Small Business Administration said “unprecedented demand” slowed their system down with more than 100,000 loans processed by more than 4,000 lenders as of 3:30 pm EST. That’s “more than double the number of users accessing the system compared to any day during the initial round of the program.”
When the program originally began at midnight on April 3, banks were still scrambling to process final guidance issued only hours before. But after two weeks of refining their systems, processing documents from hundreds of thousands of applicants, and hiring and training personnel across the country, the five largest banks had more than 1 million applications for over $100 billion ready to go by 10:30 am all backlog from the first round of applicants. During the first round of funding, some major banks said only applicants who submitted within the first few minutes on April 4 ended up getting approved. Applications that were processed later in the day (April 4) are still in line waiting, meaning that any nonprofit that actually receives funding this week most likely applied on April 4.
The Main Street Alliance, an advocacy group representing nonprofits and small businesses, argues that there are still serious problems with the program. “The dangerous inequities we saw with the first round will not be resolved” in the second round of funding, says Amanda Ballantyne, national director of Main Street. “With funding likely to run out in 48 hours, it is ludicrous that Congress thinks it has already done its job supporting nonprofits and small businesses.”
For those who have already submitted their loan applications, there is no need to resubmit one to the same lender. In addition to the guidance included in our previously issued articles, you can find the SBA Interim Rules and FAQs here for additional information.
The Interim Rules were updated on April 24, 2020, to touch on the following:
It is expected that the SBA will issue additional guidance via “FAQs” in the coming days and weeks, and we will continue to advise you as we obtain more information.
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