- Lenders have often turned to software to allow them to automate some processes of Paycheck Protection Program loan applications
- Banks are preparing for a new round of PPP applications even as they process forgiveness applications for previous loans
- SBA has barred automated loan applications from its online portal, but lenders can still use the software to prepare loan applications
Banks often turned to software to help them process the surge of loan applications under the Paycheck Protection Program, and lenders will likely continue to embrace commercial automation in the future.
As business restrictions impacted the revenues of millions of businesses during the first months of the COVID-19 pandemic, PPP was introduced to offer companies forgivable loans to help preserve their payrolls and meet other expenses. The program proved popular, quickly exhausting its first round of funding and ultimately serving more than 5 million companies, and the high demand put additional pressure on the lenders who had to process these applications.
Even as lenders continue to process forgiveness applications, a new round of PPP funding has become available to both first-time borrowers and repeat borrowers who can demonstrate that they experienced a serious loss of revenue in 2020. The program also comes with a number of key changes to who is eligible and what the funds can be used for.
The situation can generate new confusion and strain for lenders, but software can help streamline the process. Several software companies offer services that automate the underwriting process, accelerate the review and processing of paperwork, and make it easier to accept applications, originate loans, and keep up with updated rules.
Banks have either updated their own services to create more of a digital lending process or contracted with vendors to assist them. They often expect to keep this infrastructure in place for commercial loans in the future, especially as the pandemic has accelerated interest among borrowers to apply for loans online.
There are certain limitations to the automated process, though. The Small Business Administration barred robotic process automation from its E-Tran system last April after it was overwhelmed by automated submissions. Despite this order, lenders were still able to use automated processes to help prepare applications for PPP loans. Some banks have also tried to connect with borrowers in person to introduce them to the digital tools instead of having them go through the entire process with no human contact.
