SBA and Treasury value all lenders and their small business customers.
For the benefit of small business customers and their employees, SBA and Treasury are working on ways to optimize the loan processing system.
Starting today, Robotic Processing Automation (RPA), which are robotic systems used by some banks to mimic human data entry, may not be used to submit Paycheck Protection Program loans into SBA’s E-Tran loan system.
RPAs burden the processing system and diminish its capabilities. Without RPAs, the loan processing system will be more reliable, accessible, and equitable for all small businesses.
Application Programing Interface (APIs) will still be permitted. If you are a lender who needs assistance converting your submission process to a non-RPA API, contact Sheri McConville. (Sheri.Mcconville@sba.gov)
SBA and Treasury have updated the guidance for lenders who have received a significant amount of Paycheck Protection Program (PPP) loan applications.
The minimum amount of lender-approved and SBA-ready PPP loans that a lender must have ready for the XML file submission process is now 5,000 loans.
Please note these XML files of 5,000 or more approved PPP loans must be submitted to SBA by 9pm EDT on Monday, April 27, 2020.
SBA and Treasury value all lenders and their small business customers and will continue to provide updates to the PPP lending community as loan processing resumes this week.
From a CCBN bank:
Forgiveness is discussed in the following sections on the PPP – IFRN FINAL:
a.) Section O starting Page 13
Forgiveness is discussed in the following sections on the PPP – IFRN FINAL (Addtl) – for self-employed and independent contractors:
a.) Section F starting Page 11
The clause that has merited attention on our side is the following from the PPP –IFRN FINAL on Page 13-14:
That is, the borrower will not be responsible for any loan payment if the borrower uses all of the loan proceeds for forgivable purposes described below and employee and compensation levels are maintained.
Our interpretation is that the number of employees can’t be reduced and no reduction in their compensation at the time of funding thru the 8 week period. They could hire more or give raises if they chose. Hence the borrower need for a current employee list/with salaries to track against.
FinTech companies that were used by banks to help get loans into the system but who failed to do so before the system shutdown due to number of loans that overwhelmed their ability to process.
Below is guidance from ICBAs FAQ’s on agents
The obligation of a lender to pay the appropriate agent fee does not commence unless the bank has agreed that the accounting firm/CPA is acting as an agent for the bank. Please see guidance provided below from the American Institute of Public Accountants (AICPA) to their members in support of best industry practices.
“The law is clear that agents cannot collect a fee from an applicant but must instead collect a fee from the lender. If you choose to be an agent, we suggest you (the Accounting Firm) contact the lender before embarking on the engagement and get a written agreement with them so you get paid. You should have a conflict waiver in the agreement with the lender, just like in your loan assistance engagement letter with the client. Disclose this arrangement with your client as well.”
We are still awaiting SBA guidance
The forgiveness of a PPP loan is not taxable to the borrower unlike the usual treatment of debt forgiveness.
OriTrust's PPP Fast Application is a powerful bank developed tool that can help its members fast-track PPP lending and is very straightforward and simple to use. It helps with making sure the bank is collecting all the required information and with the ongoing monitoring of information to ensure each borrower obtains loan forgiveness.