March 10, 2021
C-Suite Wednesday — Half of PPP Lenders Say The Hold Code Resolution Process is Improving
According to the latest polls conducted during the Coleman Report Live daily show, 4 out of 5 SBA lenders are still experiencing hold code errors on 1-20% of their PPP loan portfolio. Compared to historical readings, the number of lenders in this category remains statistically consistent. However, since the SBA has adjusted the hold code resolution process by allowing lenders to resolve errors through lender certification, the number of PPP loans receiving hold codes is now trending downward.
Here are some of the other industry trends from Coleman’s recent polls:
- More than half of SBA lenders (51%) indicate that their ability to resolve certain hold codes via lender certification has improved the overall hold code resolution process. However, 40% say it has not had a significant impact and 9% say it has made the process worse.
- 51% of lending institutions cite eligibility issues as the number one reason for receiving a PPP Second Draw hold code. Other common reasons include SBA questions regarding the existence of the business or a guarantor (32%) and minor typing errors (17%).
- Despite struggles with hold codes, most lenders (69%) indicated that over half of the PPP loans they have processed this year have been Second Draw loans.
- 79% of SBA lenders say that Second Draw PPP loans are extremely important to their borrower’s economic health.
Although there has been some improvement to the resolution of PPP hold codes, small business lending trade associations have begun to express their concern regarding the upcoming March 31, 2021, PPP deadline. In a letter to Congress, a group of 10 trade associations request that any PPP loan application submitted to the SBA prior to March 31, 2021, be made eligible for subsequent SBA approval. However, Congress and the SBA have not yet publicly addressed the letter.
To receive the latest industry updates regarding PPP, join the free Coleman Report Live daily show at 1:00 PM Eastern.