There is obviously a lot of confusion regarding the forgiveness issue for the U.S. Small Business Administration’s Paycheck Protection Program loans. The ultimate fallout of this is the significant non-productive time requirements lenders are going to have to devote to address the wide range of confused and frustrated questions they will be asked by the borrowers.
There are now three different forgiveness applications:
Borrowers are confused about the supporting documentation requirements and are calling their lenders for clarification. If the borrowers choose not to file a forgiveness application and they don’t sign any related loan documents, the lender will have to file a claim with the SBA. Again, this is a very staff-time-consuming and therefore expensive exercise to manage. Lenders will have to pursue the SBA claim because there will not be any other recourse.
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