January 26, 2020
SBA Hot Topic Tuesday — The Top 5 Updates to PPP Guidance SBA Lenders Need to Know About
On December 27, 2020, the President signed the Economic Aid Act, which provides $325 billion in additional assistance to small businesses struggling to recover from the impact of the COVID-19 pandemic. Among other things, the Economic Aid Act provides funding for a second round of forgivable loans for small businesses and nonprofits experiencing significant revenue losses, makes programmatic improvements, and enacts emergency enhancements to other SBA lending programs.
Here are the top 5 recent updates to PPP guidance lenders need to know:
- IFRs on Economic Aid Act Amendments to PPP
On January 6th the SBA published a set of interim final rules on changes to PPP brought about by the Economic Aid Act. The first, implements general PPP guidance from the Economic Aid Act and consolidates all other interim final rules governing borrower eligibility, lender eligibility, and PPP application and origination. The second, contains specific guidelines for PPP Second Draw Loans.
- IFR on PPP Forgiveness
This interim final rule provides lenders with guidance related to the forgiveness of PPP loans, consolidates all prior rules related to forgiveness, and incorporates changes made by the Economic Aid Act.
- Guidance on the Implementation of the Section 1112 Debt Relief Program
The purpose of this Notice is to provide guidance on the implementation of Section 1112 principal and interest debt relief payments authorized for the 7(a), 504, and Microloan Programs.
- SBA Procedural Notice: PPP Loan Reapplications and Increases
This procedural notice describes the narrow circumstances under which certain eligible borrowers may reapply for a new First Draw PPP Loan or request an increase to a First Draw PPP Loan approved on or before August 8, 2020.
- Procedural Notice on PPP Excess Loan Amount Errors
This Procedural Notice addresses PPP loan errors which resulted in a PPP loan amount that exceeds the borrower’s correct maximum loan amount under the CARES Act and the Economic Aid Act. According to the guidance, a borrower error will not affect the loan guarantee, but a lender error will result in denial of the guarantee on the excess loan amount.
Keeping up with hundreds of pages of SBA and Treasury guidance can be time-consuming. Sign up for Coleman’s webinar on processing PPP loan applications and forgiveness to quickly get up to speed with all of SBA’s recent changes to PPP.