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The more than 41,000 small businesses in Arkansas that received Paycheck Protection Program loans can now apply to have those proceeds forgiven.

Approval could take up to 150 days though federal loan officers said they hope to act quickly on requests. Even so, bankers participating in the program said Monday that they have not received final regulations detailing how they get a borrower's application reviewed and approved.

Borrowers can have up to 24 weeks of payroll and other essential business expenses forgiven, meaning they don't have to repay the funds. The U.S. Small Business Administration has been in charge of the loan program.

"I would suggest strongly if you have disbursed all your funds, to get that application to your lender quickly," Herb Lawrence, a loan officer in SBA's Little Rock office, said Monday. "You don't have to sit and wait 24 weeks to apply."

Borrowers must work through their lenders to have loans forgiven, SBA officials said Monday. Borrowers submit the application to the bank that approved the loan and the lender then works with SBA on review and approval. Loan recipients have 10 months, from the day they received funds, to apply for forgiveness.

"The lender is the primary source [of contact], not the SBA," Lawrence said.

Banks have 60 days to review the application and SBA can take up to 90 days to approve it. "Some of our lenders have thousands of PPPs ... and we did have to give them time to process," Lawrence said.

The forgiveness process is opening just as the lending portion of the paycheck program ends. Today is the last day for small businesses to apply for a paycheck protection loan. Last-minute applications are still being processed, officials said Monday.

In Arkansas, paycheck loans have been granted to 41,449 businesses for a total of more than $3.2 billion, according to the SBA. The average loan is $80,000.

Lenders expect most borrowers will seek forgiveness, according to Craig Calafati, senior lender at Arkansas Capital Corp., which helped small businesses in Arkansas obtain 650 paycheck loans.

"We believe that virtually every business that received a PPP loan will apply for some level of forgiveness," Calafati said.

The lending program began with a bumpy start back in April and the opening of the forgiveness process is tricky as well – borrowers can apply for funds but lenders don't yet have complete guidance on how to work with SBA to approve forgiveness applications.

"As has been the case with the PPP program from the start, there have been bumps along the way," said Lorrie Trogden, president and Chief Executive Officer of the Arkansas Bankers Association.

"The latest bump being that customers can now apply for forgiveness, but banks lack guidance concerning where and how they will submit forgiveness applications," Trogden said.

SBA officials acknowledged Monday that the process is a work in progress. "This is actually evolving," said Richard Duda, a loan officer in the Little Rock office. "We have not had any forgiveness [applications] submitted to SBA yet."

Though the beginning of the forgiveness process has been less than ideal, Calafati noted bumps should be expected given that more than 4.6 million loans have been handed out nationwide in about three months.

"When you consider the magnitude of the undertaking that this entire PPP program has become, it is truly astounding that the process has functioned as well as it has," Calafati said.

Edward Haddock, head of the SBA Arkansas office, said banks should have the final regulations in the next couple of weeks.

In the interim, lenders are setting up internal processes to move the forgiveness approvals along speedily. "As they have from the beginning, banks will continue to work with their customers to make the PPP process as smooth and as seamless as they can," Trogden said.

The federal agency rolled out a simplified EZ forgiveness application for borrowers on June 17 and is now spreading word that the process is open. "We are glad to see a simplified application to help our small businesses here in Arkansas," Haddock said in a statement.

SBA's Arkansas office will conduct hour-long webinars every day this week to help small businesses navigate the forgiveness process. More information is available at sba.gov/coronavirus.

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