OCC, FDIC outline SBA relief programs pursuant to the CARES Act

Federal Issues OCC SBA FDIC Department of Treasury Agency Rule-Making & Guidance Covid-19 CARES Act Small Business Lending

On April 2, the OCC issued Bulletin 2020-31 and the FDIC issued Financial Institution Letter (FIL) 33-2020 to highlight for banks the SBA-relief programs available pursuant to the CARES Act. The bulletin urges banks to utilize the programs to help small businesses that have been financially impacted by Covid-19, adding that the SBA “is streamlining its eligibility criteria and processes to enable more financial institutions to use these programs for eligible small business borrowers.” The guidance highlights three relief programs, including (i) the Paycheck Protection Program (PPP), which is “an expansion of the SBA’s 7(a) loan program” and provides SBA-guaranteed loans to eligible borrowers; (ii) the Economic Injury Disaster Loan and Loan Advance Program, which is also an expansion of a current SBA program—the disaster assistance loan program—where borrowers may receive a loan of up to $2 million for working capital, and up to $10,000 as an advance that the borrower is not required to repay; and (iii) the Debt Relief Program, which provides 6 months of principal, interest and fees on 7(a) loans already in existence or originated prior to September 27.

Additional information on PPP loans can be found on the SBA website here and on the Treasury Department website here. Information about other SBA resources can be found here, and on the FDIC’s Coronavirus Information page here.