On July 23, 2020 the Small Business Administration (SBA) released a Procedural Notice to provide Paycheck Protection Program (PPP) lenders with the procedures required to submit PPP loan forgiveness decisions to SBA and to request payment of the forgiveness amount. The Procedural Notice also addresses SBA loan forgiveness reviews and payment of the loan forgiveness amount determined by SBA.
Lenders will use a new PPP Forgiveness Platform to upload and submit loan forgiveness decisions, supporting documentation, and requests for forgiveness payments. The PPP Forgiveness Platform will go live and begin accepting lender submissions on August 10, 2020, subject to extension if any new legislative amendments to the forgiveness process result in updates to the system.
To initiate the forgiveness process, a PPP borrower must submit the Loan Forgiveness Application (SBA Form 3508, 3508EZ, or lender equivalent) to its lender (or the lender servicing its loan). The lender must review the Loan Forgiveness Application in accordance with the requirements of SBA’s PPP Interim Final Rule #15 , as revised by PPP Interim Final Rule #20, and:
- confirm receipt of the borrower certifications;
- confirm receipt of the documentation the borrower must submit to aid in verifying payroll and non-payroll costs
- confirm the borrower’s calculations on the borrower’s SBA Form 3508 or 3508EZ or Lender’s equivalent form.
Lenders are expected to perform a good-faith review, in a reasonable time, of the borrower’s calculations and supporting documents concerning amounts eligible for forgiveness. If the lender identifies errors in the borrower’s calculations or insufficient supporting documents, the lender should work with the borrower to remedy the issue. The lender must complete the review and issue a decision regarding forgiveness to SBA, along with the required documents, not later than 60 days after receipt of a complete application from the borrower. SBA will generally remit the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment, within 90 days of the lender issuing its decision to SBA. The lender is then responsible for notifying the borrower of the forgiveness amount paid by SBA to the Lender.
The lender is required to confirm the following when submitting a forgiveness decision to SBA:
- That the submission accurately reflects the lender’s decision regarding the borrower’s forgiveness application
- That the submission accurately reflects the lender’s records for the PPP loan
- That the lender has made its decision in accordance with previously issued SBA guidelines
- That the PPP loan has not been canceled or repaid
- That the lender has not issued a previous loan forgiveness decision to SBA for the same PPP loan, unless it is a re-submission following a rejection or a reconsideration of a denial without prejudice.
All PPP lender Authorizing Officials (AOs) currently in the CAFS/ETRAN system will receive a welcome email from SBA (PPPForgivenessRequests@SBA.gov) with instructions on how to access the new platform. If an AO does not receive a welcome email, it should contact SBA’s PPP Lender Hotline at 833-572-0502 for instructions.
SBA will be issuing an interim final rule addressing the process for a PPP borrower to appeal SBA’s determination that a borrower is ineligible for a PPP loan, or loan amount, or loan forgiveness amount claimed.
The Procedural Notice can be found here.
In addition to the Procedural Notice, SBA issued an Information Notice on July 22, 2020 to provide a brief overview of COVID-19 assistance available under SBA’s Economic Injury Disaster Loan (EIDL) Program, including both advances (grants) and direct loans. The Information Notice also provides guidance to alert financial institutions to the potential for suspicious activity related to COVID-19 EIDL funds deposited into business or personal accounts and points of contact at SBA to report suspicious activity in the COVID-19 EIDL loan program. The Information Notice can be found here.
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