5 Reasons to Sell Your PPP Portfolio and Get Back to Banking


5 Reasons to Sell Your PPP Portfolio and Get Back to Banking

Banks of all sizes are selling their PPP portfolios and outsourcing servicing. Should you, too? Like most lenders, you may be less than prepared to handle the complicated and detailed PPP forgiveness process. You may also be eager to realize your loan income early, which is possible when you decide to reduce risk and sell your PPP loans.

Truth is: national and community banks have played a big role in supporting small businesses through PPP lending; now is the time to liberate lenders and get back to banking. One way to accomplish this is by selling your PPP portfolio to a non-bank partner that exclusively buys and services PPP loans, such as ACAP & The Loan Source, which is a partnership that seeks to ease the PPP burden most banks are feeling as deadlines approach and forgiveness begins in a challenging Covid environment.

Consider Northeast Bank’s recent sale of $457.6 million in PPP loans, which immediately off-loaded the servicing responsibility and forgiveness process, allowing the bank to realize the loan income early. “The loan sale will result in a significant gain in the current quarter and provide additional liquidity for the bank to originate and purchase loans,” said Rick Wayne, Northeast Bank president & CEO.

1. Eliminate any future risk associated with PPP. Ever-changing SBA rules make PPP servicing and forgiveness a moving target for banks. Why risk it? Northeast Bank eliminated risk while ensuring their customers received white-glove PPP loan servicing through a beneficial sell and partnership. Look for veteran lenders, such as ACAP and The Loan Source, who had purchased just over $2.9 billion in PPP loans as of the end of July.

2. Provide better service to your PPP customers. Find an expert team that knows the PPP regulations inside and out. Changing guidelines and SBA rules update daily, so it’s critical to not miss vital details which could result in opportunity and revenue loss. By selling and outsourcing servicing to PPP professionals, you can stop worrying about navigating the forgiveness process and finally get back to the business of banking.

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3. Avoid building PPP-tailored technology in-house. If unequipped with a savvy and smart customer portal to streamline the PPP forgiveness process and save time, banks could experience a nightmare service situation. “[Northeast Bank] considered a technology purchase to handle the forgiveness process, but ultimately thought the risks of keeping the process in-house outweighed the benefits,” said Wayne. “The bank has a deep relationship with ACAP and The Loan Source, providing comfort that PPP borrowers will continue to receive solid customer service.”

4. Accelerate and realize your PPP loan income early. Since most PPP loans have two or even five-year terms, borrowers who fail to qualify for forgiveness could force a delay in revenue recognition for banks seeking significant fee amounts. After selling its PPP portfolio, Northeast Bank immediately recognized a gain of $9.7 million. No longer distracted by the forgiveness process, lenders who sell to PPP servicing experts enjoy immediate earnings, peace-of-mind, and ongoing support for their PPP customers.

5. Close quickly and keep your banking customers. Helping PPP borrowers achieve forgiveness is a huge undertaking. Without an SBA department, banks can struggle and fall behind on the demands of servicing PPP loans. Northeast Bank’s decision to sell its PPP loans resulted in a seamless transaction, with ACAP and The Loan Source providing transparent, customer care while exclusively servicing the PPP loans. It is possible to close in a week and receive real support when you need it most – right now.

Stay in control, save time, and start providing better service. Begin the loan transfer process and protect your PPP customers at www.acapgp.com.

ACAP is a banking partner providing complete PPP loan servicing solutions. They are committed to helping banks reduce future risk and accelerate loan income, by providing white-glove PPP loan forgiveness, servicing and robust customer support. Your PPP loan customers remain your customers; now better protected when you partner with ACAP.