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Date: Jun 30, 2020 @ 04:00 PM

By: John Stanfield

The original intent of the Payment Protection Plan (“PPP”) loan program was to provide a simple way to access capital quickly during a very uncertain time in our history.  Save for a few snafus that were largely due to the sheer volume of submission to the SBA, it largely went well. 

Part of the reason it went well is the application to the SBA was very simple and straightforward.  It was a two-page application with basic information, a simple calculation to get to your eligible loan amount, and generally straightforward reps and warranties the borrower had to sign off on.

However, everything Congress and the SBA got right with the loan application they are getting wrong with the forgiveness application.  It is an eleven page document with complex calculations, voluminous documentation request, and ambiguous at best terminology that has borrowers throwing their hands up and seeking help from their CPAs and attorneys, which is going to be a costly solution for the borrower (recently the forgiveness application was shortened to five pages – though shortening it did not necessarily make the calculations any easier).

The complexity of how to calculate the payroll costs on the forgiveness application cannot be overstated.  The borrower will have to calculate full time equivalency employee counts for three separate periods, consider safe harbors, and track all employee costs on a per employee basis during the forgiveness period which often comes from several sources. For example, large payroll providers (e.g. ADP) are providing reports to calculate forgivable payroll amounts, but health benefits are an eligible payroll cost.  So, what happens if you do not use ADP for your employee’s health benefits?  Then, the reports from the payroll provider are minimally incomplete. 

There are several service providers out there providing “calculators” which often rely on the borrower to do all the heavy lifting and are really nothing more than a web form that puts the numbers on the SBA form.  Additionally, most of these providers are technology companies and not lenders.  They do not appreciate the intricacies of small businesses and their financials. 

To address all this complexity, LQD Business Finance has created the LQD PPP Forgiveness Platform that utilizes data integration and automation to deliver increased efficiency and accuracy at a very affordable price. LQD Business Finance is the only service that delivers a complete forgiveness package to include (i) the PPP Forgiveness Determination Report, which provides the summary calculations for each criteria and the forgiveness amount, and which has direct links to all of the supporting documentation, (ii) a completed and automatically generated PPP Loan Forgiveness Application, and (iii) assembled and cloud-accessible verification and backup documentation files.

Using data integration and automation, we can largely eliminate the tedious and error-prone manual processes currently being employed, saving several hours or borrower time while increasing accuracy. The LQD PPP Forgiveness Platform calculates eligibility through multiple factors in addition to API available data, providing greater verification and eliminating bottle necks and moats.

LQD’s Online Customer Portal makes the process of integrating data and dynamically tracking and submitting documentation seamless and our Customer Success Team will enable us to quickly respond to customer issues and inquiries.

Offering a free and premium option to accommodate all of the needs of the borrower and lender, LQD Business Finance also offers an audit protection program with the premium package, under which LQD will defend any future SBA PPP audit on the company’s behalf, ensuring that risk related to verification or miscalculation is minimized.

Finally, LQD Business Finance is not just a software or technology company. As a leading fintech lender, LQD Business Finance has five years’ experience dealing with small business borrowers and solving for the numerous reporting and documentation challenges surrounding small business lending. With the LQD PPP Forgiveness Platform, you do not just get technology, you get a team of portfolio management, borrower support, and technology professionals. LQD Business Finance is offering live demos of the LQD PPP Platform.

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