The SBA Payment Protection Program (PPP), part of the government’s $2.2 trillion CARES Act, was created to give small business the funding to survive the Coronavirus shutdown. Its intent is to keep workers employed.
The $349 billion program’s first round began April 3 and was to run through June 30. However, in just two weeks’ time the program reached its limit. The second round started April 27 and still has funds available, $126.5 Billion as of May 7.
First Round Stats:
Loan Count: 4,341,145
Approved Dollars: $513,271,131,359
Lender Count: 5,496
Second Round Stats:
Loan Count: 2,571,167
Gross Dollars: $188,943,588,568
Lender Count: 5,463
Why Q2 is helping FIs and small businesses
In response to the challenges facing small businesses following the effects of COVID-19, its mission to strengthen financial institutions (FIs) to help strengthen their communities led Q2 to create two purpose-built SBA Payment Protection Program (PPP) solutions for origination and loan forgiveness. In part, the lack of clarity on SBA PPP guidelines – combined with FIs’ need to be prepared to meet customer requests – led Q2 to provide options for taking on volumes of small business applications, proactively managing the loan forgiveness process, and accessing coaching assistance.
With the regularly changing guidelines, Q2 can push updates directly to our solution to confirm documentation requirements to make sure the small business application is processed and ultimately, loan forgiveness protocols are met. And in the process, Q2 not only helps FIs, but small business owners who are not fully aware of rules and stipulations for the loans they have applied for or received.
Our solution—CL Originate—addresses both SBA PPP loan origination and loan forgiveness.
Quickly accepting PPP applications
The challenge of supporting SMBs in need of funding, accelerating the applications, and empowering FIs to participate in PPP led Q2 to create an API-based, configurable loan origination solution that so far has taken billions in PPP applications. From kick-off to go-live, the Q2 Cloud Lending solution can begin accepting applications in just four days.
Creating a path to Loan Forgiveness
Loan Forgiveness starts once the borrower receives funds from the SBA. We understand that small business borrowers are uncertain about what is required to gain forgiveness. This challenge can put FIs at risk – tying up capital while dealing with high-volume low interest rate loans during a crisis situation can be problematic to say the least.
Proactive compliance
There is an important need to ensure that documentation is accurate during the beginning, middle, and end of the 8-week loan forgiveness period. That’s why the Q2 solution focused on “proactive compliance” promotes permissible usage
Preparing for what’s next
FIs need to prepare for potential audits from the SBA over the next two years. Our solution will provide an ironclad audit trail, saving staff from spending hours preparing for an audit.
As noted, Q2 actively monitors guidelines and provides automated updates to its Loan Forgiveness solution. As recently as May 15, the SBA released the Loan Forgiveness Application for Paycheck Protection Loans which, we can only assume, will serve as de facto guidance on forgiveness. Q2 is actively taking in these new guidelines and updating the Loan Forgiveness solution for our customers.
Assistance for commercial banks
The Fed has also launched several emergency loan programs that have generated unprecedented demand from commercial banking customers. To help FIs manage the resulting increase in customer request volume, we’ve developed the PrecisionLender CARES Edition to assist with each step in the process. This solution enables bankers to move quickly and confidently using Andi®, PrecisionLender’s virtual deal coach. The software is updated, free of charge, and can be put to use whenever a federal program is added or updated.
Q2 gives your FI the flexibility you need for decision strategies and processes while providing you the speed to market the CARES Act SBA loan programs demand.
Learn more about how Q2 delivers for businesses everywhere during the COVID-19 pandemic.
