January 27, 2021

Caity Roach
Editor

C-Suite Wednesday —Resolving Second Draw PPP Holds and Errors

When a Lender submits a PPP second draw loan application, the SBA will run the application data through a validation process. That validation process may return a hold code or error code that requires input from the Lender before the second draw loan will receive a loan number from the SBA. In order to make the process of clearing validation messages faster, the PPP Platform has been updated to include hold code and error code names and descriptions. 

Beginning today, the PPP Platform will no longer reject second draw PPP loan applications for “unresolved borrowers” who may have been ineligible for some or all of their first draw PPP loan. Instead, loans to unresolved borrowers will receive a hold message that provides the lender with the reason for the hold and examples of documentation that may assist the SBA with resolving the issue. Loans with other hold messages and error codes will also be able to benefit from this streamlined process of resolving issues.

To address validation messages, lenders must upload into the PPP Platform all documentation needed to resolve the issue along with the borrower’s second draw application form 2483-D.  If the borrower does not have the recommended documentation or the lender determines that the borrower was not eligible for a second draw loan, the lender must withdraw the application. 

The SBA anticipates the process of clearing validation messages to take more than 24 hours after the lender submits the recommended documentation to resolve the issue. To make the process faster, lenders are encouraged to upload the borrower’s first draw PPP application. However, since it is not required that the borrower use the same lender for their first and second draw PPP loan, uploading the first draw application will not be a requirement.  

For additional help fixing unresolved errors, the SBA recommends contacting your commercial loan servicing center.