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SBA PPP loan application process is a nightmare for lenders and their customers. It doesn’t have to be.

8 minutes
The Small Business Administration, which administers the PPP, stopped accepting disaster relief applications from small businesses on April 16, after the funds from the first stimulus bill were depleted. 

The good news: additional funds are likely to be made available soon

Lawmakers appear close to approving another $310 billion for the stimulus program, which provides loans to small businesses so they can pay employees and other operating expenses. The nearly half-trillion-dollar measure would provide more funds to the Paycheck Protection Program, which was halted after it ran out of money. 

The bad news: the next round of the Paycheck Protection Program could dry up much quicker than its initial run

The initial $349 billion ran out 13 days after its launch on April 3rd, with nearly 5,000 lenders participating in the program’s initial run. And the rush for limited funds resulted in clogged processes and disappointed customers. 

By some estimates, the new funds could be gone as quickly as 48 hours after they become available. And a flood of applications is expected to further strain a portal that already struggled to handle the initial workload.

First-come-first-served: lenders with an efficient application process will be able to serve their customers better

The initial funding was approved on a first-come-first-served basis.

While that initial funding of $349 billion has been exhausted, banks must continue to process member applications under the assumption that additional funding will be authorized for the SBA PPP. 

Thousands of lenders are waiting and ready to upload to the SBA’s E-Tran system the moment it goes live. The focus of many lenders is on getting as many loans into E-Tran as fast as possible.

Banks must refine their processes to get customer applications through the portal quicker. Fully automated application processes will speed up turnaround times to net more approvals resulting in more funds available to customers.

Banks reliant on manual processes will be trailing behind their more efficient and digitally mature peers.

The SBA PPP application process is marred with inefficiencies: a view from a customer’s perspective 

Customers have been struggling with the application process due to inefficient and manual workflows at their banks.

We asked one of the applicants with a tier-1 US bank about their experience requesting a loan through the SBA PPP process, and reportedly the application took 6 days to resolve all problems. The bank required another week to process the application before submitting it to the government. That’s almost two weeks.

In the meantime, enclosed is the recently launched SBA (Small Business Administration) Application and Checklist for the PPP (Payroll Protection Program). We continue to hear problems that small businesses have had with this process that are consistent with what we experienced. Handling SBA PPP loans with PDFs that must be reformatted for submission to the government portal is leading to bottlenecks. Here are some of the stumbling blocks a typical small business owner encounters during the process:

  1. The haphazard approach means that each bank’s process is different: Sole proprietors need to open a business checking account if they have not already done so. A customer can’t send the standard SBA application (enclosed) to your bank. Each bank has created its own version of the SBA application with a different degree of usability and user-friendliness.
  2. Customers who encounter problems must restart from the beginning (i.e., need more information, reformat forms, etc.). The system does not save the information already submitted. It is not unheard of that the customer must re-enter the same information over a dozen times – a frustrating experience, to say the least.
  3. There is no remote assistance for bank officials to determine what the problem might be and to assist the customer. The customer is on their own during the application process.
  4. Documents and files that need to be downloaded need to be formatted in a specific way. Failure to correctly format results in the inability to submit.
  5. Some customers reported that they had to purchase an eSign solution just for this process, such as Adobe Acrobat (for $50/month) in order to use Adobe Sign.  It was the only way that the customer signature would be accepted.
  6. There is no way for accountants to submit information on behalf of the client. 
  7. Some banks’ usability standards leave much to be desired. For example, some banks fail to accept applications from Mac systems, accepting only applications on PC.

A sudden flood of new applications will test E-Tran’s capacity and durability.

In the meantime, it was announced recently that the SBA (Small Business Administration) may have leaked confidential information from over 8,000 PPP applicants. Any solution that handles sensitive customer data must be scrutinized and held to the highest compliance standards. Homegrown applications developed hastily by individual banks and reliant on PDF for gathering information cannot be secured in accordance with the highest data protection standards. 

The need for more efficient and effective remote digital platforms is apparent, especially in the banking sector.  

Accelerating SBA PPP loan applications with digital customer journeys

Due to the extremely high application volume for the SBA Paycheck Protection Program (PPP) loan, lenders and banks must make sure that the process is efficient and user-friendly from start to finish and ensures that all the data submitted is correct and errors are minimized in order to ensure acceptance rates. 

Not everyone interested in the SBA PPP loan will be funded. But, an efficient and quick process ensures that your customer applications will be considered first. Each bank is responsible for how it handles its SBA PPP program applications. 

EasySend is a secure and compliant no-code platform for the development of customer journeys in the banking and insurance sectors. We enable banks to quickly deploy secure, compliant, and user-friendly processes that ensure data integrity and quick turnaround times. 

With EasySend, banks can launch fully-branded and white-labeled SBA PPP processes that are user friendly, secure, and compliant, including

  • Remote assistance
  • Multi-language capability
  • Multi-signee and multi-role workflows
  • Supplemental document upload
  • Legally binding eSignature
  • Enterprise-grade security and compliance standard

Are you a bank handling SBA PPP loan application processes? The need for banks to work remotely in a quick, efficient, safe way is here to stay. There couldn’t be a more compelling time to work with EasySend. Talk to us about digitizing your SBA PPP application process.

Vera Smirnoff

Vera Smirnoff is the demand generation manager at EasySend. She covers digital transformation in insurance and banking and the latest trends in InsurTech and digital customer experience.