PPE News

ABA Raises PPP-Related Issues in Letter to SBA, Treasury  - 01/26/2021
In a letter to the acting heads of the Small Business Administration and Treasury Department on Monday, ABA raised several significant issues that have arisen since the PPP reopened earlier this month. Specifically, ABA flagged that the PPP portal does not permit lenders to upload borrower applications for second-draw loans if the borrower still has a pending forgiveness application for a first-draw loan with SBA. Lenders have also reported receiving a high number of incorrect error messages when submitting PPP loan applications for the portal, ABA said. Read the letter.

SBA Updates Rules, Forms for PPP Loan Forgiveness - 01/20/2021
The Small Business Administration released revised loan forgiveness forms for the Paycheck Protection Program. SBA also released an updated interim final rule on PPP forgiveness and a new conflict of interest disclosure.

The revised forms include Form 3508S, which provides a streamlined forgiveness application for all PPP loans of $150,000 or less. In reviewing Form 3508S, “the lender does not need to independently verify the borrower’s reported information” if the borrower submits documentation and attests to its accuracy, SBA said, but should the lender identify an error, it “should work with the borrower to remedy the issue.”
The interim final rule issued last night consolidates previous guidance with new requirements under the Economic Aid Act, the COVID-19 relief package passed in December reauthorizing the PPP. For example, the rule incorporates the hold-harmless provision from the law for lenders that rely in good faith on borrowers’ certification and documentation, updates what payroll costs are eligible for forgiveness and reflects the process for both first-draw and second-draw PPP loans. The rule also covers non-payroll costs eligible for forgiveness, reductions in forgiveness, documentation requirements, SBA review and lender fees.
SBA specified that it will revise pre-existing FAQ documents to conform to the Economic Aid Act “as quickly as feasible.” Also mandated by the Economic Aid Act, the new disclosure form is required for PPP applicants for which at least 20% of their equity is held by certain executive branch officials, members of Congress and their spouses. The MBA will provide breaking news updates as important SBA documents are released.
Download the revised Forms 3508, 3508EZ and 3508S.
Download the borrower disclosure.

SBA Issues FAQs on Revenue Reduction, Max Loan Amount Calculations for Second-Draw PPP Loans - 01/19/2021
With the Paycheck Protection Program portal reopening for all lenders this morning, the Small Business Administration today issued a set of frequently asked questions that address how to calculate revenue reduction and maximum loan amounts for second-draw PPP loans, as well as the documents borrowers must provide to back up these calculations. Second-draw loans are available for borrowers with 300 or fewer employees that experienced a 25% or greater revenue drop in 2020 compared to 2019 and that have used or intend to use the full amount of their first-draw PPP loan by the time they receive their second draw loan.

“Lenders may rely on this guidance as SBA’s interpretations of the CARES Act, the Economic Aid Act and the Paycheck Protection Program interim final rules,” SBA said. “The government will not challenge lender PPP actions that conform to this guidance and to the PPP interim final rules and any subsequent rulemaking in effect at the time the action is taken.”

SBA also issued a reminder regarding borrowers who have applied for second-draw loans and who currently have loans under review by SBA, or SBA has determined that the borrower may not have been eligible for a first-draw loan. In these cases, SBA said that the lender will not receive an SBA loan number for a borrower’s second-draw loan until the issue related to the first-draw loan is resolved. SBA said it will “resolve issues related to unresolved borrowers expeditiously.” Read the FAQs The MBA will provide breaking news updates as important SBA documents are released.

In Advance of Full PPP Reopening, SBA Issues Flurry of Guidance, Notices - 01/17/2021
With the Paycheck Protection Program portal reopening for all lenders on Tuesday—and already open for lenders with assets under $1 billion—the Small Business Administration moments ago released guidance on calculating the maximum loan amounts for first-draw PPP loans and what documentation is required for different types of businesses. “The U.S. government will not challenge lender PPP actions that conform to this guidance and to the PPP Interim Final Rules and any subsequent rulemaking in effect at the time the action is taken,” states the SBA.
For second-draw loans—on which additional guidance is still anticipated—SBA advised lenders to ensure the loan number for a borrower’s first-draw PPP loan is included on the second-draw application and to make the SBA loan numbers (a sequence of eight numbers, followed by a dash, followed by two numbers) easily accessible to their borrowers.
The SBA also issued two procedural notices earlier this afternoon. One notice provides information for PPP lenders on the process for borrowers to resubmit loan forgiveness applications using the simplified Form 3508S if they had already applied using earlier forms. Borrowers may resubmit Form 3508S until the SBA notifies the lender of a final forgiveness decision. The notice also covers lenders’ responsibilities to notify borrowers in writing about lender and SBA decisions to approve or deny forgiveness in full or in part. Finally, it covers offset forgiveness payments to cover a lender’s outstanding debts to states or the federal government.
The second notice addresses questions related to good-faith errors made either by borrowers or lenders that result in loan amounts exceeding the eligible max. Borrowers may not receive forgiveness for excess loan amounts. A borrower error will not invalidate the SBA guarantee; in the case of lender error, the SBA guarantee would not apply to the excess loan amount only. Additional forms and guidance may be released over the holiday weekend. The MBA will provide breaking news updates as important SBA documents are released.

PPE Resources

  1. First, is setting up a PPP Loan Referral Program, as the link below was established for HUB. 
  2. The second area ACAP has excelled in is acquiring an institutions PPP portfolio.  ACAP believes after this second round, that some banks may be considering either serving released, or servicing retained sales of some of all of their PPP portfolio.
  3. And the third area, ACAP can be a resource and offer assistance in servicing, forgiveness among much more. 
  • ACAP Loan Source (MBA Associate Member)The MBA is here to provide resources and assistance during this second round of the Payment Protection Program.  We know you are working extremely hard in preparing to assist the small businesses in your communities.   If you are looking for assistance in round 2.0, MBA Member ACAP can assist you and your clients, if need be.   ACAP Loan Source is MBA member and is here to assist and guide banks and small businesses through the PPP loan application and loan forgiveness process.  They will follow the funding of the PPP loan, and continue to be a partner with the business through the servicing and forgiveness process.  They are PPP Loan specialists and are here to provide robust guidelines and expert support staff.   The ACAP Loan Source is one of the largest non-bank SBA lenders in America.  ACAP Loan Source is fully committed to the Paycheck Protection Program, and through its customized technology, has streamlined the PP process.  If you are interested in learning more, please visit their website at:  www.acapgp.com.