Paycheck Protection Program

Image of United States Capitol BuildingOn May 28, 2020, the U.S. House of Representatives passed legislation that, if adopted by the Senate and signed into law by the President, would provide considerable relief to borrowers under the Paycheck Protection Program (PPP).

The bill, known as the Paycheck Protection Program Flexibility Act of 2020 (PPPFA), amends the original Coronavirus Aid, Relief, and Economic Security (CARES) Act to loosen restrictions placed on PPP loans, making them more favorable for borrowers.

Continue Reading UPDATE: U.S. House of Representatives Seeks to Amend the CARES Act to Provide Borrower’s Relief under the PPP

On May 21, 2020, the U.S. Small Business Administration (“SBA”) released a notice informing lenders of how they may collect loan processing fees for eligible loans issued under the Paycheck Protection Program (“PPP”).

Pursuant to the CARES Act and the Interim Rule, issued by the SBA on April 2, 2020, the SBA will pay fees to lenders for processing eligible PPP loans at the following rates, based on the balance of the loan outstanding at the time of full disbursement:

  • 5% for loans under $350,000;
  • 3% for loans between $350,000 and $2 million; and
  • 1% for loans over $2 million.

However, in order to collect the processing fee on a PPP loan, a lender must first report to the SBA that a loan has been fully disbursed using SBA Form 1502.  The SBA will begin accepting these reports on fully disbursed PPP loans on May 22, 2020.  Once the report is received, the SBA will initiate the process of paying the PPP processing fee for which the lender is eligible.

Continue Reading SBA Announces Procedure for PPP Lenders to Collect Loan Processing Fees