The Small Business Administration on Friday evening released updated borrower and lender guaranty applications for both first-draw and second-draw Paycheck Protection Program loans. The revised forms come as SBA plans to reopen its PPP portal Monday for certain lenders reaching underserved communities, including community development financial institutions and minority depository institutions. The portal will be open for second-draw loans by these lenders starting on Wednesday, and open to all lenders soon thereafter.
The updated forms reflect congressionally authorized changes in the program, including eligibility for certain 501(c)(6) organizations, housing coops and media organizations and the lender requirement to confirm payroll costs by reviewing the applicant’s payroll documentation. The second-draw loan form requires the borrower to certify the drop in gross receipts required under the statute reauthorizing the PPP and defines how gross receipts are calculated. The lender form for second-draw loans requires the lender to comply with the interim final rule SBA issued on Jan. 6, which requires a good-faith review of the borrower’s calculations.
Any banks participating in PPP for the first time must fill out a revised version of SBA Form 3506, but previously participating lenders do not need to fill out the revised form to make new first-draw and second-draw loans.
SBA also issued a procedural notice on the remittance of Economic Injury Disaster Loan advances previously deducted from PPP loan forgiveness amounts. The COVID-19 relief law reauthorizing PPP repealed the deduction of EIDL advances from PPP forgiveness. “For those loans where SBA remitted a forgiveness payment to a PPP lender that was reduced by an EIDL Advance, SBA will automatically remit a reconciliation payment to the PPP lender for the previously-deducted EIDL Advance amount, plus interest through the remittance date,” SBA said. “PPP lenders are not required to request remittance of the reconciliation payment.”
