- The U.S. Small Business Administration is opening a streamlined application portal that will allow businesses with Paycheck Protection Program loans of $150,000 or less to apply for forgiveness directly, according to a Wednesday press release. The portal will begin accepting applications on Aug. 4, and be able to service about 6.5 million borrowers.
- The SBA has also created a PPP customer service team that will answer questions and directly assist businesses with their loan forgiveness applications. Operators can call this team at 877-552-2692, Monday through Friday from 8 a.m. to 8 p.m. EST.
- The vast majority of PPP borrowers waiting for forgiveness have loans of $150,000 or less, SBA Administrator Isabel Casillas Guzman said in a statement. The SBA approved over 6.5 million loans totaling more than $275 billion. In 2021, 96% of loans went to businesses with fewer than 20 employees (compared to 87% in 2020).
By giving restaurant operators a direct line to the SBA to submit forgiveness applications, rather than relying on banks as intermediaries, restaurant owners around the country could learn of their loan's status more quickly. This could be crucial to the financial health of many eateries as the industry contends with rising inflation, supply chain disruption and historic labor pressure — all of which are heaping unexpected costs on weakened operators.
If a restaurant can learn whether they are forgiven faster, it could avoid the need to set aside funds to cover the loan and instead put that cash toward pressing needs, such as utilities, hiring bonuses or other debts.
"This initiative will allow PPP borrowers to put their concerns of achieving full forgiveness behind them and focus on operating and growing their businesses again," Patrick Kelley, associate administrator for SBA's Office of Capital Access, said in a statement.
The question of forgiveness for PPP loans was so stressful for many restaurants, especially during the program's first iteration, that some opted not to use PPP funding to avoid debt that could potentially shutter their businesses. PPP later amended their loan requirements to be more flexible, which helped cash-strapped restaurants put money toward more utilities in addition to payroll costs.
Though many restaurants complained that PPP's requirements did not mesh well with the realities of running a restaurant business — especially when so many operators were employing skeleton staffs for off-premise-only service during the early months of the pandemic — these loans were a valuable stopgap for an industry in free fall.
But even after PPP and the first (and only) iteration of the Restaurant Revitalization Fund, restaurant associations argue the industry needs more federal intervention to kickstart recovery. Legislation to inject an additional $60 billion into RRF has been proposed by members of Congress, but in the meantime, a streamlined PPP loan forgiveness option could ease financial burdens and anxiety for restaurants big and small.