The demand for PPP loans is extremely high. To meet the volume of needs, financial institutions can automate the lending process to get capital into the hands of small business owners quickly. There is an obvious emphasis on speed for this program. In fact, the Treasury just stated that the first disbursement of the loan must be made no later than 10 days after the loan is approved. No matter how proactive your financial institution is in gathering borrower documents, it doesn’t eliminate the fact that a lender will have to input this information later. Financial institutions must automate PPP loans to serve your local small businesses effectively and ensure they have the resources needed to thrive.
Manual data entry and re-keying borrower information are both time-consuming and prone to error, further delaying borrowers from receiving loans promptly. Automating PPP loans is mutually beneficial to both the borrower and the lender. By using a third-party system, such as Sageworks SBA Lending solution, lenders can provide a portal for borrowers to apply for a PPP loan directly through the financial institution’s website – especially beneficial during social distancing. Borrowers can submit supporting documentation and make eligibility elections directly through the website, and applicants and participants can e-sign directly through the online application.
For a PPP loan, eligibility is essentially equal to approval for the program. When the application is submitted, the lenders can provide borrowers with almost immediate feedback that they have been conditionally pre-approved for the loan, or that their application is under review if they are ineligible.
Creating an automated, digital process is critical not only for lenders’ immediate needs, but also for reporting weeks later, as loan forgiveness comes into play. In the Abrigo system, for example, lenders can report and track the PPP pipeline, and each application that comes through this program will be flagged that it came from the PPP, so it is easy to locate for reporting.
Once the lender has applied the decision to approve the loan, it will then move to the closing process, where the lender submits an application for guarantee to the SBA through the E-Tran portal. Abrigo customers are able to quickly push the application data collected directly into E-Tran, where the data will repopulate.
E-Tran, the SBA’s application portal, has been the subject of many frustrations due to technical problems and login confusion. If your financial institution wants to lend PPP loans, an important step early on in the process is to ensure that the institution already has an account set up through Capital Access Financial System (CAFS). If a lender is unable to access E-Tran, there are several steps to take to troubleshoot the issues.
Throughout the weekend, many financial institutions were unable to access E-Tran, due to the crush of applications submitted, which slowed the system to a halt. Monday, technical errors continued, as E-Tran was down for a good portion of the day. E-Tran is mission-critical for the PPP loan initiative to work. There is no way to know when it will go down or how long it will be down for. Although this is frustrating, if a lender is an Abrigo user, then he/she does not have to worry about losing data once it’s saved within the Sageworks SBA platform. When E-Tran is back online, the lender will be able to resume and push the data into E-Tran to be executed.