Over the last week, IBAT has heard from many bankers who have been surprised to learn that the number of borrowers with EIDL advances (which will be deducted from their PPP forgiveness) is greater than they anticipated.
For several months, IBAT has been sounding the alarm to the SBA, Treasury and Congress to highlight the difficult and uncomfortable position in which this leaves lenders who must inform their borrowers that a balance remains on their PPP loan.
Bills have been introduced in Congress designed to fix this issue and remove the EIDL advance impact on the forgiveness calculation. IBAT is supporting ICBA’s grassroots efforts to address this issue with a call to action for both bankers and PPP borrowers. At this point, the bill is silent on whether its effects (if passed) would be retroactive. This presents a strong case for borrowers who received an EIDL advance to hold off on application for forgiveness, in the event Congress changes the treatment of the EIDL advance in the forgiveness process. IBAT has also prepared a template letter for banks to use to communicate the forgiveness decision in instances where the EIDL amount has been deducted.