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The U.S. Small Business Administration has a new process to speed up loan forgiveness applications for small businesses, but Arkansas bankers remain frustrated with the agency's approval process.

The process to forgive Paycheck Protection Program loans remains slow, and the Small Business Administration is reluctant to give out any detailed information related to its approval of applications, the bankers said Tuesday.

Last week, the Small Business Administration issued a simpler forgiveness application form for borrowers who received less than $50,000. Bankers across the state were hoping for more.

"What came out Friday was kind of an in-between," said Kevin Hester, chief lending officer at Home BancShares Inc., which owns Centennial Bank. "It wasn't everything we hoped for, but it does provide some help for those borrowers of under $50,000."

The new process fell short of what the banking industry advocates -- a simple form for borrowers of loans under $150,000. The small business would sign a certification that the money was used properly for payroll and critical expenses such as rent and utilities. With that, smaller businesses could avoid having to submit detailed documentation.

Under the new process, small businesses that borrowed under $50,000 do not have to calculate salaries for full-time employees and other payroll data, but some documentation is required.

"It wasn't all the relief we were hoping for, but it is certainly better than what it was," Hester said Tuesday.

Bankers are frustrated with the forgiveness review and approval process, which the Small Business Administration first announced would begin Aug. 10. There has been little action since, judging by the number of applications approved.

"It's been frustrating for all banks and our customers," said Jon Harrell, chairman and chief executive officer of Generations Bank in Rogers. "There's been a cat-and-mouse thing going on throughout this whole process, but the wheels seem to be turning now."

Small Business Administration approval is sluggish at best, bankers say.

Generations Bank has submitted about 50 Paycheck Protection Program loans for forgiveness approval; it has heard back on 10 and has been reimbursed for one loan, according to Luke Colley, market president for Rogers and Bentonville. Those submissions began back in August.

Centennial Bank has made 8,500 Paycheck Protection Program loans and submitted applications for about 2% of those in a process that began about a month ago. The bank has received approval for one loan.

"They haven't been approving loans since Aug. 10," Hester said. "We got our first approval from SBA last week."

Under its rules, the Small Business Administration has 90 days to act on a forgiveness application. Centennial has asked the agency for an average wait time or how long it might take to consider applications.

"All they'll tell us is they have 90 days; that's it," Hester said. "It seems like they haven't been ready to work through applications until about 10 days ago. We do know they are working on them, but the backlog has got to be huge."

Nationally, the Small Business Administration has approved 5.2 million Paycheck Protection Program loans for small businesses. The program was set up in April to help small businesses keep workers employed during the pandemic.

Arvest Bank has submitted about 800 forgiveness applications and had approval for one of those as of Friday, according to Marcus Guinn, commercial loan manager for northeast, central and southwest Arkansas.

"Submission has been smooth and fairly straightforward," Guinn said. "We expect to see a continued increase in this activity in the coming days and weeks" with the simplified submission process the Small Business Administration announced last week.

Arkansas Capital Corp., which has issued about 800 Paycheck Protection Program loans, has not yet submitted a forgiveness application.

Chief Operating Officer and President Sam Walls is still hopeful Congress will make it easy for borrowers of less than $150,000 -- which is the great majority of the 43,669 loans approved in Arkansas -- to sign a simple certification that the money was used as intended and avoid providing detailed documents about the loan spending.

"That will save the borrowers and bankers like us a lot of time," Walls said. "One of the few things that both parties in Congress, and even the White House, seem to agree on is to make it easy for a blanket forgiveness of loans under $150,000."

So far, there's been a lot of discussion about that issue but no agreement.

Treasury Secretary Steven Mnuchin, in addressing the guidelines for loans under $50,000 last week, indicated more change could be on the way.

"We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds," he said in a news release. "We continue to favor additional legislation to further simplify the forgiveness process."

While the process has been frustrating, Colley said, the loans have saved jobs. He estimates the 460 loans Generations Bank has made kept about 4,000 workers employed.

"We were willing to deal with the challenges just knowing that we were able to help our businesses and keep people at work," he said.

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