Justin Ward inside Bridgton Books, which he has owned for 27 years, on Monday, May 18, 2020. Ward received full forgiveness for his government loan in December. Credit: Lori Valigra / BDN

The U.S. Small Business Administration said it will open an online portal on Wednesday so small businesses can directly apply to have pandemic loans forgiven rather than going through their bank first.

Maine companies took out 19,471 federal Paycheck Protection Program loans this year alone that were worth almost $1 billion as of May 31, according to the SBA. Most of those were for $150,000 or less. Those smaller loans will be eligible for forgiveness via the new portal.

The SBA doesn’t have state data on loan forgiveness yet, but figures from some large Maine-based banks indicate it has been a slow process with many borrowers not yet applying for forgiveness.

Bangor Savings Bank disbursed 7,981 loans worth $591 million in the first two rounds of paycheck protection loans that started in 2020, Jim Donnelly, chief commercial officer at the bank, said. While 94 percent of the first round of loans from early 2020 have been forgiven, only about one-third of second-round borrowers have submitted applications for forgiveness so far. Almost all of those have been approved, he said.

Camden National Bank disbursed 4,382 paycheck protection loans worth $330 million as of June 30, Renee Smyth, chief experience and marketing officer for the bank, said. Of those, about 63 percent have been forgiven. Most of those forgiven were first-round loans.

The second-round loans require that businesses incur a 25 percent reduction in revenues to qualify for forgiveness. The portal can score loans as pass or fail, the SBA said. If the loan passes, the lender doesn’t need to double check the applicant’s revenue figures. If it fails, the borrower will need to provide more documentation of the revenue reduction.

Banks will have to opt in to the program to allow the SBA to directly forgive borrowers, but Camden National does not plan to do so, saying its own system has been “efficient and effective.” Bangor Savings said it also didn’t opt in.

The federal loan program, which sent more than $3 billion to Maine businesses overall, was a lifesaver for many small businesses that were able to use the money to keep paying employees during the COVID-19 pandemic. But both the program and the forgiveness application have been fraught with confusion as the SBA intermittently tweaked the requirements to simplify them.

Justin Ward, who has owned Bridgton Books for 27 years, initially was concerned about getting forgiveness for the $15,000 loan he got last year.

“I got the first application for forgiveness, but my manager said ‘don’t do that, there’s going to be a simpler one,’” he said.

It was simpler, and he was granted forgiveness for the full amount in December, a few weeks after he had applied.

The SBA expects the new portal will result in more applications being processed, Diane Sturgeon, director of the SBA’s Maine District Office, said.

“We expect to see even more small-dollar loans, which are what the majority of our [paycheck protection] loans in Maine are, processed,” she said.

The Paycheck Protection Program ran out of money in early May for most businesses except for community financial institutions.

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Lori Valigra

Lori Valigra, senior reporter for economy and business, holds an M.S. in journalism from Boston University. She was a Knight journalism fellow at M.I.T. and has extensive international reporting experience...