All lenders are interested in knowing how their portfolio stands up against that of their competitors, but obtaining this type of competitive intelligence is usually difficult. We examined the performance of lenders’ small business portfolios in 2020 using Paycheck Protection Program (PPP) loans as a proxy. Continue reading to see the top 50 rankings.
A wealth of information regarding the PPP loans, including lenders, recipients, and loan amounts, was made public by the SBA in December 2020. We analyzed the performance of 706,000 companies in our database that obtained PPP loans from the 50 lenders with the largest loan volumes using that data in conjunction with our Merchant Transaction Signals. We analyzed the growth in card revenue at each company and used the results to compare the PPP portfolio performance of each bank. â.
During the COVID-19 pandemic, the Paycheck Protection Program (PPP) provided many small businesses with a vital lifeline. Now that the loan forgiveness process has begun, borrowers want to know which lenders are offering the best terms for loan forgiveness.
A recent report from the Pandemic Response Accountability Committee (PRAC) indicates that the top 25 PPP lenders have varying forgiveness rates. For instance, only 2057 percent of the PPP loans made by Comica Bank and 2057 percent of the loans made by Prestomos CFDI and LLC have been forgiven.
This variation could be due to a number of factors, including the lender’s forgiveness process, the borrower’s industry, and the borrower’s location. However, it is important to note that forgiveness rates are still relatively high overall, with an average of 80% of PPP loans forgiven across all lenders.
The top 5 lenders with the highest forgiveness rates are listed below. So which lenders are setting the standard for PPP loan forgiveness?
- Comerica Bank: 89%
- Truist Bank: 87%
- U.S. Bank: 86%
- JPMorgan Chase: 85%
- Bank of America: 84%
These lenders have all made significant efforts to streamline their forgiveness process and make it easier for borrowers to get their loans forgiven. For example, Comerica Bank has a dedicated forgiveness team that works with borrowers one-on-one to ensure that they have all the necessary documentation
It is crucial to inquire about the forgiveness process offered by your lender if you are a borrower with a PPP loan. To find out how your lender stacks up against the competition, utilize the PRAC’s data visualization tool.
Here are some additional tips for getting your PPP loan forgiven:
- Start the forgiveness process early. The sooner you start the process, the more time you will have to gather the necessary documentation.
- Be organized. Keep all of your receipts and other documentation in a safe place.
- Ask for help. If you are unsure about anything, reach out to your lender or a financial advisor.
Although getting your PPP loan forgiven can be difficult, keep in mind that you are not alone in this process. You can get help from resources, and you can overcome the pandemic and get your loan forgiven with a little work.
Frequently Asked Questions
Q: What is the PPP loan forgiveness process?
A: The PPP loan forgiveness process involves submitting an application to your lender with documentation that shows how you used the loan funds. Your lender will then review your application and make a decision on whether to forgive your loan.
Q: What are the eligibility requirements for PPP loan forgiveness?
A: To be eligible for PPP loan forgiveness, you must have used at least 60% of the loan funds on payroll costs and the remaining 40% on eligible expenses such as rent utilities and mortgage interest. You must also have maintained your employee headcount and salary levels.
Q: How long does it take to get a PPP loan forgiven?
A: The time it takes to get a PPP loan forgiven can vary depending on the lender. However, most lenders aim to process forgiveness applications within 90 days.
Q: What happens if my PPP loan is not forgiven?
A: If your PPP loan is not forgiven, you will be responsible for repaying the loan with interest. The interest rate on PPP loans is 1%.
Additional Resources
Everybody suffered, but some more than others
2020 was a tough year for small businesses. Not surprisingly, our data revealed that the majority of PPP loan recipients saw a decline in card revenues, or the amount of money a business makes from credit and debit card transactions, across every lender’s portfolio. Across all 50 lenders, only 35% of these PPP recipients saw card revenues grow in 2020. By comparison, 60% of the same businesses had growing card revenues in 2019.
Digging into the data, performance of PPP recipients varied substantially across lenders. The best performing lender was BancorpSouth Bank, with 45% of PPP recipients showing card revenue growth. The worst performer, Citibank, had only 29% of PPP recipients that grew card revenues in 2020.
