As the Small Business Administration works to resolve several issues with the Paycheck Protection Program, it issued a procedural notice late last night outlining how it will move forward with the processing of second-draw PPP loan applications for borrowers who still have an unresolved issue related to their first-draw loan.
“This is a timely issue that was discussed by the OBA’s Government Relations Council on Tuesday (two days ago) and the OBA’s Board of Directors yesterday,” said Adrian Beverage, OBA executive vice president/government relations. “Later in the day, and after the Board meeting, the SBA announced its platform began processing new second-draw loan applications for unresolved borrowers. These applications will be automatically moved to a ‘research’ status and will require additional documentation.”
The SBA emphasized lenders needed to get their materials in quickly.
“It is imperative that lenders respond timely, as SBA will need time to review the documentation to determine whether the unresolved issue(s) can be cleared,” the SBA said. “Lenders should work with their borrowers to assess the situation.”
Once SBA deems the issue resolved, applications will be automatically moved to the next stage of process and will not need to be re-submitted by the lender. However, SBA noted that “lenders that submitted a second-draw PPP Loan guarantee application before Jan. 27, 2021, that was rejected due to an unresolved issue with the first draw PPP loan, should resubmit these applications.”
SBA also issued procedural notices related to various provisions of the most recent COVID-19 relief law. The notices address modifications of SBA’s 7(a) program, the elimination of certain 504 program fees and a notice to lenders that SBA has informed eligible borrowers of assistance available under section 112 of the CARES Act.