SBA issues Final Lending Guidance for Paycheck Protection Program (PPP) Loan

The SBA has issued its “Interim Final Rule” for lenders to follow when issuing the Paycheck Protection Program.

Highlights of final lending guidance:

  • Loans will be 100% guaranteed to lenders by the SBA
  • No collateral will be required.
  • No personal guarantees will be required.
  • Lender does not need to conduct any verification if the borrower submits documentation supporting its request for loan forgiveness. SBA holds lenders harmless.
  • If loan proceeds exceed forgiveness amount, loan is for 24 months from issue at 1% interest.

What is needed for underwriting:

  1. Confirm receipt of borrow certifications with PPP Application Form from SBA
  2. Confirm borrower had employees for whom the borrower paid salaries and payroll taxes on or around Feb 15, 2020.
  3. Confirm the dollar amount of average monthly payroll costs for the preceding calendar year by review payroll documentation.