Paycheck Protection Loan Forgiveness is a Shitshow

Written by SK Ashby

The Paycheck Protection Program (PPP) distributed funds in the form of forgivable loans that may be forgiven if applicants used most of the money to cover the cost of payroll during the coronavirus pandemic with a patchwork of ad-hoc rules and exceptions complicating the entire process.

Applicants who received PPP funds can now apply to have their loans forgiven, but that process is apparently broken as well. As of about two weeks ago, the Small Business Administration (SBA) had not processed a single application for forgiveness and some banks are now telling their clients not to bother.

The Government Accountability Office said in a report released Monday [September 21st] that the SBA had received roughly 56,000 applications as of Sept. 8. The GAO report did not mention any approvals, and other lenders said they know of no applications that have made their way through the review process.

“We’re not aware of any specific actions by SBA on submitted applications,” said Eric Asgeirsson, president and CEO of, the American Institute of Certified Public Accountants’ business and technology arm. [...[

Still, some lenders are advising borrowers to delay their applications because of the lack of communication from the SBA.

First Choice, for instance, is no longer encouraging borrowers to apply as it awaits responses for the applications it has already submitted.

So, this is a problem, but it became even more staggering to consider when I remembered that the SBA approved literally millions of PPP loans and a significant number if not most of them are supposedly forgivable. The SBA has not acted on a single one yet out of just 56,000 applications and it's nearly October.

It's now easier to understand why Treasury Secretary Steve Mnuchin is lobbying for automatic forgiveness for most loans; it's because if they aren't automatically forgiven the process could take years if not the entire next presidential term.

Loan recipients have until the end of the year to apply for forgiveness, but I find it difficult to believe that deadline will not be extended for a significant amount of time if not another year. This is a logistical nightmare and thousands if not tens of thousands of business owners are going to be on the hook one way or another. Some may end up wishing they had never applied.