Dive Brief:

• The Small Business Administration (SBA) plans to allow 5,000 more lenders with $1 billion or less in assets, including community banks, credit unions and farm credit institutions, to access its Paycheck Protection Program (PPP) portal at 9 a.m. Eastern time Friday to submit first- and second-draw applications, the agency said Wednesday in a press release.
• All other lenders will be able to use the portal beginning Tuesday, the SBA said.
• The SBA reopened its PPP portal Monday to first-draw applications from community development financial institutions, minority depository institutions and certified development companies, then began accepting second-draw applications from those lenders Wednesday. But the agency did not detail in a Monday press release when exactly it would expand access to other lenders, leaving the timeline at "a few days later."

Dive Insight:

The gradual rollout was meant to give smaller institutions an early advantage in accessing the $284 billion shuttled to PPP through a coronavirus aid bill signed Dec. 27. But the timeline gives community banks and credit unions one business day — since Monday is the Martin Luther King holiday — to submit applications before big banks gain access Tuesday. The portal is open over the weekend, but that may mean serious overtime hours for community bank and credit union employees assigned to processing if smaller institutions are looking to submit applications while they still have first dibs on the relief funds.

PPP, during its first iteration between April and August, provided $525 billion in forgivable loans to small businesses.

The qualifiers for the second round of funds is more strict. First of all, $15 billion is required to be set aside for lenders with less than $1 billion in assets, along with another $15 billion for those with less than $10 billion in assets. Also, this round of PPP narrowed eligibility to smaller businesses — those with up to 300 employees, compared with the first round's 500-person cap — and lowered the maximum threshold for new loans to $2 million from $10 million. Applicants also must show a 25% decline in revenue in any quarter in 2020 compared with the previous year's same quarter.

Further, additional fraud filters and identity checks instituted for this round many mean a longer delay — up to five days — from paperwork submission to loan approval, the SBA warned, according to one banker.

"I'm going to go with the five-day number and if I get it in two, I'll be happy," Alan Lane-Murcia, the SBA program manager at First American Bank, told Bloomberg. "People are anxious — they need the capital."

The SBA also added to its PPP application an optional demographic reporting section in the hopes that lenders will encourage borrowers to fill it out and bolster "efforts to reach underserved, minority-owned, veteran-owned and women-owned businesses."

The agency said this week that it had forgiven more than 1.1 million PPP loans totaling more than $100 billion, although the pace of loan forgiveness may quicken once the SBA institutes a streamlined application that requires borrowers on loans of $150,000 or less simply to state the number of employees retained and the amount of PPP funds spent on payroll.

The SBA has received more than 1.3 million forgiveness applications on about $170.5 billion in funding, it said.

"SBA is continuing to work around the clock to forgive existing PPP loans and implement the next phase of this vital Program," Administrator Jovita Carranza said in a press release Monday.