In Advance of Full PPP Reopening, SBA Issues Flurry of Guidance, Notices

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 today 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,” SBA said.

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.

SBA also issued two procedural notices today. 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 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.