In response to recent reports of lenders receiving hold codes and compliance check error messages when submitting first- and second-draw Paycheck Protection Program loan applications, the Small Business Administration today issued a procedural notice with instructions for addressing these codes. Specifically, the procedures address second-draw PPP loan guaranty applications where there is a hold code on the borrower’s first-draw PPP Loan, and first-draw PPP loan guaranty applications and second-draw PPP Loan guaranty applications with compliance check error messages. The changes will go live on the PPP loan portal tomorrow.
SBA outlined several methods lenders may use to resolve hold codes and compliance check error messages. Depending on the error code, the lender may resolve the code through a certification process, which involves collecting documentation and information from the borrower. In other instances described in the notice, hold codes may also be resolved through SBA review. The procedures also address how SBA will handle duplicate loans and other hold codes that cannot be resolved any other way.
The American Bankers Association had urged the SBA to address hold codes and other error messages, including through a Jan. 25, letter to SBA and Treasury Department.