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PPP Lender Updates

As lenders continue to prepare for the availability to submit PPP loan applications on SBA’s re-opened PPP portal, WBA wishes to remind lenders of several updates to the PPP application process and other program matters:   

Lenders Must Register on SAM.gov to Make PPP Loans 

All lenders must register on www.SAM.gov to make PPP loans under this new round of funding. PPP lenders that are not already registered will have thirty (30) days from the date of the first PPP loan disbursement made by them after December 27, 2020, to complete SAM registration and provide SBA with the lender’s unique entity identifier. For help with registering, click here.  

Origination of PPP Loans Uses Same Platform that Supports Forgiveness Decision Process 

The SBA Paycheck Protection Program Platform for originating all PPP loans can be accessed at https://forgiveness.sba.gov. It is the same platform that supports the Forgiveness Decision Process. The platform supports two methods of submission for all PPP loans requests: (a) lenders manually (web-screen method) enter and submit loan requests in the platform; or (b) lenders or LSPs providers connect via APl and submit the lenders loan requests.  

SBA Loan Numbers Will Not Be Instantaneously Issued When Filing Applications 

SBA has revised its initial PPP application procedure. There will now be a time lapse between when a lender submits PPP application information to SBA and when SBA provides an SBA loan number back to the lender. The processing change is a result of SBA conducting additional, front-end compliance checks to improve the back-end loan forgiveness process.  

Change in Calculation of Maximum Loan Amount for Farmers 

Lenders should be aware that Section 313 of the Economic Aid Act changed the formula for calculating the maximum PPP loan amount for farmers from using net income and Line 34 to using gross income and line 9 on Schedule F. This is a significant change. Interestingly enough, SBA did not make this change for any other sole proprietor.  

A farmer or rancher who received a PPP loan before December 27, 2020, may request a recalculation of the maximum loan amount based on the formula described in the recently released interim final rule regarding gross income, if doing so would result in a larger covered loan amount and may receive an increase in its PPP loan based on the recalculation. SBA has not yet released guidance regarding how to file for or process a recalculation request.  

SBA has also not yet provided guidance regarding how to handle a situation where a farmer had a positive Schedule C income but negative Schedule F income. WBA is hopeful SBA will also address this circumstance.  

Be Careful to Double-Check Information on SBA Website for Updated Resources 

Lenders are cautioned that not all information found on SBA’s website has been updated with the new law or new requirements yet. SBA has been working to release revised and new forms, rules, and guidance to implement the updated program; however, not all information on its website has yet to be updated in such a short period of time. Be careful to review effective dates of a release or form, and if you question whether a particular instruction or item has been updated, don’t hesitate to contact WBA.   

Resources 

WBA will be hosting a FREE webinar regarding the newest found of PPP lending this Thursday, January 14th from 11:00 – 11:45 a.m. The webinar will focus on what we currently know about the latest round, what is still unclear, and how your bank can help businesses during this next phase. The webinar will also be recorded and available to the membership following the live webinar. Registration for the webinar and other PPP and COVID-related resources may be found on the WBA website here

By, Alex Paniagua