Small Business Administration Behind in Reimbursing PPP Loan Payments

If you borrowed money to pay your employees during the pandemic through the U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and still have not been reimbursed for your payments, even though your loan was forgiven, you are not alone. The SBA failed to meet the deadline for it to submit more than US$66.4 billion in PPP forgiveness payments to lenders, according to a report released last week by the Office of the Inspector General (OIG).

The report found the SBA did not meet the 90-day requirement 98.2% of the time for repayment of loans of more than $2 million that already have been forgiven. The OIG recommended that the SBA develop a plan to ensure that the remaining PPP forgiveness reviews and remittances are completed within 90 days as required by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The SBA agreed with the report finding and recommendation but stated in its defense that 85% of manual forgiveness reviews completed in 2021 were finished in 90 days or less. The remaining 15% took longer than 90 days due to compliance or eligibility issues the SBA needed to research and resolve.  

As failing to complete reviews or remit payment promptly creates uncertainty for borrowers and PPP lenders, the SBA needs to monitor loans with outstanding loan forgiveness applications, according to the OIG. A high risk of fraud is associated with these loans.