SBA, Treasury announce guidance on PPP loan processing

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

On April 26, the Small Business Administration (SBA) updated information regarding the operations of the Paycheck Protection Program (PPP) to supplement an April 24 statement from the SBA and the Department of Treasury (Treasury) announcing that the PPP would restart. Through funding from the PPP and Health Care Enhancement Act signed on April 24, the SBA’s PPP resumed processing loan applications on April 27. The SBA also issued a guidance memo for lenders describing XML file transmission of completed loan applications. The memo advises that lenders may send one bulk submission each of no less than 15,000 loans, which the SBA will process into their E-Tran system. Lenders will then receive one file from the SBA providing loan guarantee numbers and loan amounts for approved applications, as well as a report of loan applications that were not “successfully processed by the SBA loan systems.” The SBA update details additional actions it will take when processing loans, which include: (i) “[p]acing the number of loans processed in the E-Tran system”; (ii) limiting each lender to originating a maximum of 10 percent of the PPP funds available, (iii) “[i]mplementing operational standards to ensure that lenders access PPP funds based on their asset size”; (iv) making certain that applications are processed in the order submitted; and (v) providing guidance to lenders with “a significant amount of loan applications.”