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As the PPP Forgiveness Application process looms, consider automation

By Heather Bosenko, Business Lending Center Manager, Lucro Commercial Solutions

Over the last few months, many lenders stepped up to assist with providing financial relief to thousands of small businesses when the economy began to feel the impacts of COVID-19. Loans made under the Small Business Administration’s (SBA’s) Payroll Protection Program (PPP) became the most viable option for business owners since the terms came with the added benefit of potential loan forgiveness. While the SBA worked to prepare the guidelines as quickly as the laws were being passed, lenders and fintech partners were both left scrambling to assemble solutions for incoming requests.

Meanwhile, at Lucro Commercial Solutions, Corporate One’s commercial lending CUSO, we adapted our online loan application portal, the Digital Business Lending Center (DBLC), in just a few short days to include PPP loans. This quick pivot would streamline the application process and lead to more than 3,000 loans exceeding $130 million for 28 credit unions.

With the PPP forgiveness application process looming, here’s a brief rundown of what your credit union should be prepared to assist borrowers with:

  • Completing and submitting the Loan Forgiveness Application.
  • Calculating the forgiveness amount.
  • Collecting documentation to support eligible payroll and non-payroll expenses. Examples of this type of documentation include proof of payments for mortgage interest, rent, leases, utilities, and payroll.
  • Making certifications for the SBA. Certifications are statements regarding the eligibility of expenses claimed as the basis for forgiveness, the use of PPP loan proceeds for authorized purposes, the borrower’s verification of payroll and non-payroll costs and submission of verification documents, as well as the truth and correctness of all information in the application and supporting documents.

Sound daunting? Fear not, Lucro has adapted the DBLC yet again to help your credit union automate the PPP Forgiveness Application process. Making loan forgiveness a more efficient process will reduce frustration and allow your members to spend more time focusing on running their businesses. We want to help you automate the collection of applications and supporting documents to greatly reduce the need to go back and forth with borrowers.

The graphic below summarizes the features of the DBLC as compared with other digital loan platforms in the industry:

 
We’ll even provide you with a tool to help you calculate the forgiveness amount. Other loan platforms expect your borrowers to begin the forgiveness application already knowing all their calculations and whether their FTE reductions count toward Safe Harbor. Expecting this knowledge at the outset will certainly create a stressful situation for lenders and members alike.

When you consider everything your members have on the line, last-minute preparation is far too risky. As many borrowers are beginning to enter the forgiveness application period, it’s crucial that our industry is ready to respond with the same exceptional service that credit unions are widely known for.

If your credit union would like to quickly set up a custom, software-free, online business loan portal to assist with automating and centralizing the collection of applications and documents, visit www.Lucro.org/DBLC to learn more, or contact me directly at heather@lucro.org.