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Financial Services Law Insights and Observations

SBA updates deadlines for first-draw PPP loans

Federal Issues SBA Covid-19 Small Business Lending

Federal Issues

On April 19, the Small Business Administration (SBA) issued an updated procedural notice to lenders related to Paycheck Protection Program (PPP) deadlines following the enactment of the PPP Extension Act of 2021 (covered by InfoBytes here). SBA reiterates that under the PPP Extension Act, “from June 1, 2021 through June 30, 2021, SBA shall not accept new PPP Loan guaranty applications from Lenders and shall only process PPP Loan guaranty applications submitted by Lenders to SBA before June 1, 2021.” The updated procedural notice modifies a previously issued notice concerning First Draw PPP loan increases (covered by InfoBytes here), and addresses (i) requests for increased first draws on unforgiven PPP loans approved before August 8, 2020, for eligible partnerships, seasonal employers, and farmers or ranchers; (ii) reapplications by eligible borrowers that fully repaid a first-draw PPP loan prior to December 27, 2020; (iii) re-disbursements to eligible borrowers that returned part of a first-draw PPP loan prior to December 27, 2020; (iv) increases for eligible borrowers that did not accept the full amount of a first-draw PPP loan approved on or before August 8, 2020; and (v) hold codes for unresolved borrowers.

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