After opening-day fiasco, SBA upgrades lender portal with Amazon assist

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There is cautious optimism that rapid-fire improvements to the Paycheck Protection Program's portal will address a series of issues that bedeviled the effort's first week.

The $349 billion stimulus program, being run by the Small Business Administration and the Treasury Department, went live Friday. Since then, the SBA's 7(a) processing system, known as E-Tran, has frustrated lenders faced with login problems and a crash that kept participants out for up to four hours Monday.

The headaches prompted SBA to work with Amazon Web Services to develop a new gateway that went live Wednesday morning.

Sen. Marco Rubio, R-Fla., included a fingers-crossed emoji in his tweet announcing the upgrade.

An SBA official, who asked not to be named, said the agency had been working to construct “a new streamlined point of entry for E-Tran.” The SBA believes the new gateway should prove “particularly useful” to new lenders who lack a pre-crisis background making 7(a) loans, the official said.

“It expedites new lender ability to process loan guarantee requests by providing direct access to E-Tran,” the official said.

That would be welcome news to banks that have been trying to access E-Tran, but have been unsuccessful because it requires an authorization number.

The problem is that “no one seems to know where [the number] comes from if you are a non-SBA lender,” said Maria Amoruso, chief marketing officer at NexTier Bank in Kittanning, Pa.

“While we have been approved as a non-SBA lender, we have not received access to the non-SBA portal,” Amoruso said, adding that the $1.4 billion-asset NexTier has “close to 600 loans” it could process. “We continue to look for some guidance … but know that the federal and local representatives are swamped with the number of inquiries.”

“No one at SBA is able to say what that” authorization number is, Kristen Stogniew at advisory firm Saltmarsh, Cleaveland & Gund, tweeted Wednesday afternoon, adding that many non-SBA lenders in Alabama, Florida and Georgia still can’t get through. “Day 6 of this mess and it’s getting old.”

To be sure, it was a big demand for E-Tran to handle the PPP volume. As of Wednesday afternoon, the SBA had received about 381,000 loans totaling $100 billion from more than 3,600 lenders. By comparison, the SBA backed $25.4 billion in 7(a) loans in its busiest fiscal year.

The Treasury, meanwhile, has asked Congress to commit another $251 billion to the program.

“SBA has been tasked to increase its capacity by a factor of at least 50 times,” said Javier Saade, a partner at Fenway Summer Ventures in Washington. “All of its credit programs combined put out about $25 billion a year. The task at hand is $350 billion in eight to 12 weeks.”

A digital upgrade was "highly needed due to the amount of dollars, number of loans and the short window lenders have to deploy them,” added Saade, who was the SBA’s associate administrator and chief of investment and innovation from 2013 to 2015.

“I think a parallel system is a wonderful idea,” said Chris Hurn, CEO of Fountainhead Capital in Lake Mary, Fla. “E-Tran has been very clunky. I was very worried about it. This is a good step.”

Amazon did not respond to a request for comment.

Even when it’s functioning, E-Tran is often slow, but “that’s to be expected with this kind of a surge” in volume, Hurn said.

The system improvements, along with many of the private-sector applications being developed to speed the PPP's operation, could propel a more fundamental and much-needed digital transformation, pushing 7(a) closer to fintech in its functionality, said Eden Amirav, CEO of Become, an online platform for small and midsize companies.

The SBA has always been characterized “by a big gap” technologically, Amirav said.

“It’s a great loan, but the complexity and hard time you had to go through to submit it” turned off potential borrowers, Amirav added. "Businesses need their money right away."

The new lender gateway comes at a particularly important time, Hurn said.

The agency provided guidance Tuesday on the promissory notes it will accept for PPP loans, settling a question that had kept many lenders, including Fountainhead, on the sidelines. The SBA is also expected to provide the application forms necessary for fintech lenders to join the program by the end of this week.

“I think you’re going to see a lot more money released next week,” Hurn said. “I’m pretty sure of it.”

Paul Davis contributed to this report.

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