By Bob Coleman
Editor, Coleman Report
A Coleman Special Report — Lenders May Rely on Borrower Representations for PPP Loans Less than $50,000
Effective October 14:
The lender does not need to independently verify the borrower’s reported information if the borrower submits documentation supporting its request for loan forgiveness and attests that it accurately verified the payments for eligible costs.
The following text will be added to Form 3808S (“What should a lender review?”):
When a borrower submits SBA Form 3508S or lender’s equivalent form, the lender shall:
i. Confirm receipt of the borrower certifications contained in the SBA Form 3508S or lender’s equivalent form.
ii. Confirm receipt of the documentation the borrower must submit to aid in verifying payroll and nonpayroll costs, as specified in the instructions to the SBA Form 3508S or lender’s equivalent form.
Providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower, and the borrower attests to the accuracy of its reported information and calculations on the Loan Forgiveness Application.
The borrower shall not receive forgiveness without submitting all required documentation to the lender.
There are approximately 3.57 million outstanding PPP loans of $50,000 or less, totaling approximately $62 billion of the $525 billion in PPP loans.