SBA Update: PPP Processing Fees, EIDL Payments

On Monday, Feb. 8,  the SBA issued an updated procedural notice regarding the reporting process through which lenders report on Paycheck Protection Program loans and collect processing fees. The guidance addresses fees for new first-draw PPP loans and second-draw PPP loans and outlines reporting requirements for lenders. 

For first-draw PPP loans made on or after Dec. 27, 2020, lenders will receive processing fees in the following amounts: 50% or $2,500, whichever is less, for loans of not more than $50,000; 5% for loans of more than $50,000 and not more than $350,000; 3% for loans of more than $350,000 and less than $2 million; and 1% for loans of at least $2 million. 

For second-draw PPP loans, lenders will receive a 50% processing fee or $2,500, whichever is less, for loans of not more than $50,000; a 5% processing fee for loans of more than $50,000 and not more than $350,000; and a 3% processing fee for loans above $350,000. 

Lenders should use SBA Form 1502 to report fully disbursed loans to SBA within 10 calendar days after the disbursement of a PPP loan. You can read the procedural notice here. For further questions, contact wbalegal@wisbank.com.  

SBA Paycheck Protection Platform Update February 8, 2021 

EIDL Advance Reconciliation Payments – SBA will be remitting reconciliation payments beginning February 9, 2021 through February 19, 2021 for any loan with an SBA forgiveness payment that was reduced by the amount of an EIDL Advance. 

  • PPP lenders are not required to request remittance of the reconciliation payment. SBA will automatically identify loans where SBA remitted a forgiveness payment to a PPP lender that was reduced by an EIDL Advance. 
  • The amount of the reconciliation payment will be equal to the previously-deducted EIDL Advance amount, plus interest through the remittance date. SBA will use the interest accrual method currently identified in the Forgiveness Platform. 
  • SBA will remit the reconciliation payment to the ACH account identified by the PPP lender of record in the Forgiveness Platform. The ACH addenda for these payments will be identical to the on-going Forgiveness payment processing. 
  • After processing is complete, the amount of the reconciliation payment will be displayed on the Payment Dashboard under the Adjustment column. In addition, a payment reconciliation letter will be posted in the Forgiveness Platform for your records. 

The PPP Lender is responsible for notifying the borrower of the reconciliation payment. The PPP Lender is also responsible for re-amortizing the PPP loan and notifying the borrower of the amount of the next payment due or advising the borrower that the loan has been paid in full, whichever is applicable. If the amount remitted by SBA to the PPP lender exceeds the remaining principal balance of the PPP loan (because the borrower made a payment on the loan), the PPP lender must remit the excess amount, including accrued interest paid by the borrower, to the borrower. 

Additional resources pertaining to the Economic Aid Act and PPP – including application forms, lender guidance, and PPP program rules – can be found on SBA’s PPP website or the U.S. Treasury PPP website.  

By, Alex Paniagua