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As the number of applications for Paycheck Protection Program loans decreases, some banks are transitioning to helping borrowers secure forgiveness for the loans rather than add new requests to their pipelines.
Others continue accepting applications from clients as well as non-clients. Some have put restrictions on applicants, such as the location where their business is based.
When Hancock Whitney began accepting applications in the program’s initial launch on April 3, the bank said that “due to very high demand, at this time we are only able to process Paycheck Protection Program applications from current business clients with active deposit accounts.”
Chief operating officer Shane Loper said Monday that the flow of new applications has slowed over the past week. Hancock Whitney is shifting to helping its 12,000-plus borrowers who received a total of $2.4 billion in loans navigate the forgiveness portion of the program.
Each bank that participated in the PPP program will process a forgiveness application for their borrowers, Loper said.
“The clock starts on the 8-week forgiveness ‘covered period’ when the borrower received the loan proceeds from the bank,” he said. “Many small businesses that received PPP loans received them in early April, and their forgiveness ‘covered period’ will be coming up in late May and the first week of June.
“Although the SBA has not finalized the forgiveness rules, we are preparing now to be ready to process our 12,000-plus borrowers’ forgiveness applications when the rules are finalized,” he added.
JP Morgan Chase appears to be taking a similar approach.
“The vast majority of loans Chase submitted to the SBA have been funded, and we continue to process loans for clients and submit to the SBA,” executive director Greg Hassell said Monday.
Many banks are still accepting applications until the $310 billion allocated for the second round of the PPP runs out.
Capital One Bank is accepting new applications from eligible customers “and will continue to do so until funds for the program are exhausted,” the bank’s website said Monday. So is Fidelity Bank, a spokesman said Monday.
Metairie Bank is still accepting applications on its website for businesses based in the greater New Orleans area.
“The volume of applications has slowed significantly, so eligible borrowers who act quickly to gather the necessary documents and apply online should be able to secure their funding for a PPP loan,” Metairie Bank president and CEO Ron Samford said.
Home Bank is accepting applications from businesses based in Louisiana, according to New Orleans market president John Zollinger.
IberiaBank is still processing new applications from clients and non-clients, with no new restrictions. Applicants can contact their local banker or apply on the bank’s website, a spokeswoman said.
Loper advised borrowers to review a PPP Q&A document that SBA frequently updates on its website to understand guidance on the loans. Forgiveness requirements are expected to be published in the coming weeks.
“As banks prepare for loan forgiveness, they will provide more information on the forgiveness application process to borrowers,” he said.
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