Resolution of Hold Codes through SBA Review | February 10, 2021
If the Lender’s Second Draw PPP Loan guaranty application cannot be processed because there is a Hold Code on the First Draw PPP Loan, the platform will provide the Lender an opportunity to submit information and documentation into the platform to support the resolution of the outstanding First Draw PPP Loan Hold Code.
The Lender must resolve the Hold Code by submitting information and documentation through the platform for SBA review and resolution. Note: The platform reference guide titled “Unresolved Borrower Resolution Process for Second Draw PPP Loans” lists the Hold Codes that require SBA resolution and provides guidance as to the types of information and documentation that may assist with resolution. It is imperative that Lenders respond timely, as SBA will need time to review the documentation to determine whether the Hold Code(s) can be resolved.
If SBA is able to resolve the Hold Code(s), the Second Draw PPP Loan guaranty application will be automatically submitted into the next stage of processing. If a Hold Code is resolved by SBA at this stage, the Hold Code will not require further SBA review at loan forgiveness.
If SBA is unable to resolve the Hold Code(s), SBA will not issue a loan number for the Second Draw PPP Loan.
TABLE 2: Resolution through SBA Review
Hold Code & Description which may affect Restaurants
- 12 SBA Franchise Directory Review
- 15 Potential Ineligible Business Size
- 18 Aggregate Data Mismatch
- 21 Employee Count Threshold
- 33 Potential Affiliation Issue
- 37 SBA - Potential Affiliation Issue
National Restaurant Association Requests Changes To 2nd Draw Of PPP | Monday, January 18, 2021
The National Restaurant Association asked the Department of Treasury and SBA to make the following changes to the Interim Final Rule on the second draw of the Paycheck Protection Program in order to maximize employee retention and save restaurant livelihoods ... Read More.
SBA & PPP Update | Friday, January 15, 2021
The Small Business Administration announced the PPP will be open to small lenders today, Friday, January 15, and all lenders on Tuesday, January 19. Community financial institutions are already accepting applications. See more loan and application details.
PPP NEW Updates & Guidance | Friday, January 8, 2021
PP2 Loan Program to Open January 11 | Friday, January 8, 2021
- Community Development Financial Institutions
- Minority deposit institutions
- Certified development companies
- Microloan intermediaries
New PPP Guidance Issued by SBA, Treasury | January 6, 2021
- The 82-page IFR “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended” consolidates the rules for PPP forgivable loans for first-time borrowers and outlines changes made by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260).
- The 42-page IFR “Business Loan Program Temporary Changes; Paycheck Protection Program Second Draw Loans” lays out the guidelines for new PPP loans to businesses that previously received a PPP loan.
PPP2 Overview | December 27, 2020
- Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
- Sole proprietors, independent contractors, and eligible self-employed individuals.
- Not-for-profits, including churches.
- Accommodation and food services operations (those with North American Industry Classification System (NAICS) codes starting with 72) with fewer than 300 employees per physical location.
PPP Loan Terms
- Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
- Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.
- Covered operating costs such as software and cloud computing services and accounting needs.
Simplified Application and Other Terms of Note
- Creates a simplified forgiveness application process for loans of $150,000 or less. Specifically, a borrower shall receive forgiveness if the borrower signs and submits to the lender a certification that is not more than one page in length, includes a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount. The SBA must create the simplified application form within 24 days of the bill’s enactment and may not require additional materials unless necessary to substantiate revenue loss requirements or satisfy relevant statutory or regulatory requirements. Borrowers are required to retain relevant records related to employment for four years and other records for three years, as the SBA may review and audit these loans to check for fraud.
- Repeals the requirement that PPP borrowers deduct the amount of any Economic Injury Disaster Loan advance from their PPP forgiveness amount.
- Includes set-asides to support first- and second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers that have recently been made eligible, and for loans made by community lenders.