No forgiveness: Small businesses still on hook for rescue loans

Banks say the process for converting the government-backed loans into grants has been frustrating because of a lack of communication from the Small Business Administration and the Treasury Department, which have run the effort since Congress created it in March.

“Unless we get something both from a legislative perspective and from Treasury and SBA to make this process a little easier, it’s going to be a struggle,” said Naeha Prakash, associate general counsel of the Bank Policy Institute.

Banks, which loaned their own money with the expectation that it would be repaid by the government, have been submitting applications for loan forgiveness to the SBA since Aug. 10.

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