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July 24, 2020

SBA to Accept PPP Loan Forgiveness Applications Beginning August 10, 2020

On Thursday, July 23, 2020, the Small Business Administration (SBA) issued a Procedural Notice (Notice) to inform Paycheck Protection Program (PPP) lenders of the processes for: (1) submitting decisions on PPP borrower loan forgiveness applications to the SBA and requesting payment of the forgiveness amount determined by the lender; and (2) SBA loan forgiveness review and payment of the loan forgiveness amount determined by the SBA. 

Lender Submission of Loan Forgiveness Decisions 

Lenders may begin submitting their loan forgiveness decisions to the SBA’s secure PPP Loan Forgiveness Platform (Platform) on August 10, 2020, subject to extension if any new legislative amendments to the forgiveness process necessitate changes to the system. 

The Platform allows lenders to submit individual PPP loan forgiveness requests. The Platform also features Application Programming Interfaces, which will allow lenders to submit multiple forgiveness requests at once. Submissions may be rejected if they are incomplete or contain errors. Lenders will be notified of the rejection and have the opportunity to correct the error. Correction of the error will restart the 90-day period for the SBA to verify the forgiveness amount and remit payment. The SBA will publish additional guidance on how to use the PPP Forgiveness Platform, including step-by-step instructions on the PPP Forgiveness Platform. 

All PPP lender authorizing officials currently registered in the E-Tran system will receive a welcome email from the SBA with instructions on accessing the platform. Authorizing officials who do not receive a welcome email should contact the SBA’s PPP Lender Hotline at 833-572-0502 for instructions. Authorizing officials will be allowed to create up to 10 additional users in the Platform. Lenders will use the Platform to provide the SBA with ACH credit information for the account where the lender wishes to receive the PPP forgiveness payments. 

Lenders must provide a single point of contact and an email address for an authorizing official. This point of contact must be available to respond to SBA inquiries regarding the lender’s submission and to work with the SBA if the loan is selected for review. If a lender fails to provide a point of contact, all lender submissions will be rejected and returned. 

Lenders must review the Loan Forgiveness Application in accordance with the requirements of Part III.2.a. of IFR #15 on the SBA’s Loan Review Procedures and Related Borrower and Lender Responsibilities (85 FR 33010), as revised by IFR #20 on Revisions to Loan Forgiveness and Loan Review Procedures IFRs (85 FR 38304). For additional information on these requirements, see our previous eAlert. In addition, lenders must confirm the following for each PPP forgiveness submission: 
 
  • The submission accurately reflects the lender’s decision regarding forgiveness.
  • The submission accurately reflects the lender’s records for the PPP loan.
  • The lender has made its decision in accordance with requirements set forth in previously issued Interim Final Rules and other SBA guidelines.
  • The PPP loan has not been cancelled or repaid.
  • The lender has not issued a previous loan forgiveness decision to the SBA for the same PPP loan, unless it is a resubmission following a rejection or a reconsideration of a denial without prejudice.

Lenders can provide these confirmations directly on the Platform. 

When submitting the Loan Forgiveness Application, lenders must check one of four boxes: 
 

–      Approved in full
–      Approved in part
–      Denied
–      Denied without prejudice


When lenders check the “approved in part” box, a lender must provide its own data for each line item for which it determined a different amount than the amount on the Loan Forgiveness Application. The SBA will use the line item amounts entered by the lender to verify the calculations and facilitate the final forgiveness payment amount and associated interest calculation. 

SBA Loan Forgiveness Review 
 

The SBA may review any PPP loan of any size at any time, at its discretion. The SBA will notify lenders of its decision to review a loan via the Platform. If the SBA undertakes such a review, lenders must upload the required documentation to the Platform.  

Borrowers may appeal the SBA’s determination on loan forgiveness eligibility. The SBA intends to issue an interim final rule soon addressing the appeals process. 

The Notice can be found HERE

The rules surrounding PPP loans are complex and business specific. If you have concerns about the rules, please contact Ford TurrellTimothy HillegondsRob DaviesMatthew CroweCharlie GoodeJeffrey Ott or your Warner attorney.

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