COVID-19 UPDATES
SBA Issues New Guidance on PPP Lending
The Small Business Administration issued two interim final rules on Paycheck Protection Program requirements.
One interim final rule focuses on loan review procedures and related borrower and lender responsibilities, such as:
• SBA reviews of individual PPP loans.
• Borrower representations and statements that SBA will review.
• What lenders should review.
• The timeline for lender decisions on loan forgiveness applications.
• What lenders should do if notified that SBA is reviewing a PPP loan.
• Lender fees subject to clawback if SBA determines a borrower is ineligible.
The other interim final rule provides details on loan forgiveness, including:
• The general process to obtain loan forgiveness.
• Payroll and nonpayroll costs eligible for loan forgiveness.
• Reductions to the Loan Forgiveness Amount based on reduced employees or compensation.
• Documentation requirements, including SBA Form 3508.
The new rules follow the release of a Procedural Notice on submitting the initial SBA Form 1502 to report on PPP loans and collect the processing fees on fully disbursed loans. Under a separate interim final rule, the deadline to submit the initial SBA Form 1502 for PPP loans is now the later of: (1) May 29, 2020, or (2) 10 calendar days after disbursement or cancellation of the PPP loan.
Read lender and borrower responsibilities IFR
House to Vote on PPP Flexibility Bill This Week
The House is scheduled to vote as soon as tomorrow on the Paycheck Protection Program Flexibility Act, a bipartisan bill to provide more flexibility for PPP borrowers. The bill would extend the maturity period for unforgiven loans to five years and extend the forgiveness period through the end of 2020.
ICYMI - SBA Releases Long-Awaited Guidance on Form 1502 for PPP Processing Fees
Last Thursday the Small Business Administration issued guidance to Paycheck Protection Program lenders on filing Form 1502, which will trigger the payment of PPP loan processing fees to lenders. SBA will begin accepting Form 1502 filings tomorrow; lenders must submit Form 1502 data for all PPP loans by May 29 or 10 calendar days after the loan is disbursed or canceled, whichever is later. The guidance comes after the SBA last Tuesday announced that it will extend the deadline for lenders to submit Form 1502 from May 22 to the new deadline of May 29..
To file Form 1502, lenders—or their service providers—must have an existing account or create a new account with SBA’s fiscal transfer agent, Colson Services. The guidance provides details on how to access Colson’s lender portal and submit Form 1502 data. Lenders must submit separate 1502 reports for PPP and other 7(a) program loans. For PPP loans that have been sold, the originating lender is responsible for the initial Form 1502 submission.
While lenders must file Form 1502 data for all PPP loans disbursed or canceled, lenders will not be paid if the PPP loan is canceled before disbursement or if the loan was canceled or voluntarily terminated after funds were disbursed and repaid by May 18.
SBA said that it will not pay processing fees for PPP loans canceled, terminated or repaid due to an SBA loan review finding the borrower ineligible. The agency added that lender processing fees may be clawed back within a year after disbursement if SBA later determines the borrower to be ineligible, although this determination will not affect the SBA guaranty for the loan, provided the lender "has complied with its obligations under section III.3.b of the initial PPP Interim Final Rule."
In other PPP news, the SBA released updated PPP lending figures. As of last Thursday at 5 p.m. EDT, SBA had approved more than 4.4 million PPP loans amounting to $512.2 billion across both PPP rounds, leaving more than $156 billion in congressionally appropriated funds available. (The total loan volume was slightly lower than previous sums reported, as certain borrowers with access to other forms of liquidity returned funds.)
ICYMI - Governor Extends Foreclosure Protections
In a press conference last Wednesday, Gov. Holcomb announced that he is extending to July 1 his executive order halting evictions, foreclosure actions and utility disconnects. The initial executive order, executed on March 19, was structured to continue until the termination of Indiana’s state of emergency. The extended deadline of July 1 falls three days before the final stage of the governor’s Back on Track plan for reopening Indiana.
View the initial executive order
ICYMI - 2020 IBA Annual Washington Trip Transitions to Virtual Format
The in-person 2020 IBA Annual Washington trip scheduled for July 26-28 has been canceled due to the COVID-19 pandemic. However, the need for high-level advocacy continues. We are pleased to announce that we will transition to a virtual format for the 2020 IBA Annual Washington Visit. The IBA will be organizing virtual meetings with regulators and legislators to be held throughout the summer. We will notify members of the meeting details as soon as they become available, and also provide background information on the issues in advance. More information is forthcoming. For questions, contact Josh Myers.
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.