Louisiana lags behind the national average in canceling paycheck protection loans, but a recently introduced website seeks to change those numbers.
The national average for forgiveness of loans was 42% in July, compared to 26% in Louisiana. In Baton Rouge, 22% of loans were canceled at the end of June, while 19% were canceled in New Orleans and 35% in Lafayette.
Paycheck Protection Loans can be canceled if the money has been used for qualifying expenses such as payroll, rent, and utilities.
The US Small Business Administration has backed 11.4 million paycheck protection loans nationwide and has already canceled 7.2 million loans in early October.
This represents 65% of all paycheck protection loans distributed to small businesses across the country after the coronavirus pandemic in 2020 and 2021. The SBA expects that by the end of this year, more 90% of loans are canceled.
To help achieve this goal, a new online portal was introduced in August to allow borrowers to request a rebate. The portal is intended for loans of $ 150,000 or less, which represents the majority of debts.
The goal is to allow small businesses to apply for loan forgiveness directly.
âIt really eliminates any need for manual documents and processes,â said Patrick Kelley, associate administrator for the Small Business Administration’s access to capital office. “It has a profound impact on the pace.”
Of the 5,000 lenders who have participated in the program, 1,500 are synchronized with the online portal. The borrower’s forgiveness request can be done online via a smartphone and takes less than 6 minutes to complete.
Any borrower who does not directly request forgiveness of the loan or who does not request forgiveness of the loan from the lender may have to repay the loan with 1% interest.
According to the SBA, less than 5% of loan forgiveness requests through the program are denied.
In Louisiana, 226,588 paycheck protection loans were approved between 2020 and 2021 for a total of $ 12.3 billion. By the end of June, around $ 5.4 billion had been returned.
Before the online portal opened, 5,921 loans were canceled in the parish of East Baton Rouge out of 26,485 loans, or $ 5.4 billion. The parish of Lafayette had 4,950 remissions on 13,983 loans totaling $ 1.1 billion. In the parish of Orleans, 5,453 loans were canceled out of 27,384 loans worth $ 1.5 billion.
It was not immediately clear how many loans in Louisiana have been canceled since the portal opened.