SBA Issues Procedures for PPP Whole Loan Sales

As the second round of the Paycheck Protection Program progressed last week, the Small Business Administration yesterday issued a procedural notice on how lenders may sell whole PPP loans.

Reiterating previously issued guidance affirming the CARES Act provisions permitting secondary market sales, the notice covers obligations of purchasing and originating lenders, required documentation and required notice to—but not approval by—SBA.

Previous guidance and an interim final rule made clear that sales of PPP loans into the secondary market do not require SBA approval, that a PPP loan sold into the secondary market retains the 100% SBA guaranty, that it may be sold into the secondary market at any time after it is fully disbursed and that it may be sold at a premium or at a discount to par value.