As the Small Business Administration works to resolve several issues with the Paycheck Protection Program flagged by ABA earlier this week, it issued a procedural notice late Wednesday night outlining how it will move forward with the processing of second-draw PPP loan applications for borrowers who still have an unresolved issue related to their first-draw loan.
SBA said that beginning today, its platform will begin processing new second-draw loan applications for unresolved borrowers. These applications will be automatically moved to a “research” status and will require additional documentation. “It is imperative that lenders respond timely, as SBA will need time to review the documentation to determine whether the unresolved issue(s) can be cleared,” SBA said. “Lenders should work with their borrowers to assess the situation.”
Once SBA deems the issue resolved, applications will be automatically moved to the next stage of process and will not need to be re-submitted by the lender. However, SBA noted that “lenders that submitted a Second Draw PPP Loan guarantee application before January 27, 2021, that was rejected due to an unresolved issue with the first draw PPP Loan, should resubmit these applications.”
SBA also issued procedural notices related to various provisions of the most recent COVID-19 relief law. The notices address modifications of SBA’s 7(a) program, the elimination of certain 504 program fees, and a notice to lenders that SBA has informed eligible borrowers of assistance available under section 112 of the CARES Act.
