PPP forgiveness — is it worth it?

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Since April 2020, the Small Business Administration Paycheck Protection Program has provided more than $525 billion in loans to more than 5.2 million small businesses — saving tens of millions of jobs in the process. The task of originating these PPP loans fell to national and local lenders, with more than 5,400 lenders across the United States reporting major pitfalls along the way.

From excess time required to originate PPP loans to the overtime hours put in by loan staff, banks are starting to quantify time and revenue loss resulting from the process of PPP lending. As PPP forgiveness begins, lenders are also beginning to dread the complexities of the program. The solution: banks are deciding to sell all or some of their PPP loan portfolios for forgiveness servicing, and some banks are beginning to consider referrals of anticipated PPP 2.0 originations to a servicing partner.

PPP Origination vs. PPP Forgiveness

Get ready for more than three times the work. Recent data shows bank employees spend an average of 70 minutes on the forgiveness process in comparison to the 20 minutes spent originating the PPP loan. In fact, lenders are reporting six requests per business hour for every 1,000 applications, with up to three requests per hour on all non-business hours — including weekends. When applications fail, due to missing information or errors, this requires an additional 15 minutes of researching, correcting, and resubmitting.

Common unforeseen forgiveness perils banks are beginning to realize:

  • No proven process in place to efficiently handle PPP forgiveness
  • Lack of experience and understanding of the covered period
  • Time loss as borrowers need to modify their application following submission
  • Difficulty and confusion interpreting applications and supporting burrowers
  • Challenges surrounding lost or forgotten passwords or important details
  • Inability to separate workflow for PPP and non-PPP lending

Get Back to the Business of Banking

This data is both insightful and daunting, however, there is a simple way out: leave the PPP heavy-lifting to the experts. ACAP and The Loan Source are partners in PPP origination, servicing, and forgiveness, with $3.3 billion in purchased PPP loans to date. Specializing in white-glove loan servicing, ACAP and The Loan Source brings the most experienced PPP team together under one roof.

When you sell all or some of your PPP portfolio to ACAP and The Loan Source, your PPP loan customers are guaranteed first-in-class servicing and the opportunity for maximum loan forgiveness. Put your customer’s experience first and get back to doing what you do best.

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Partner Insights by ACAP & The Loan Source