SBA provides needed answers on PPP

Apr 09, 2020

The Treasury Department and Small Business Administration answered key ICBA questions about the Paycheck Protection Program. In new updates to the agencies' PPP frequently asked questions, they confirmed the following:

  • Lenders may use their own promissory note or an SBA form of promissory note for PPP loans. SBA Standard Loan Note (Form 147) is posted on the SBA website.
  • The lender must make the first disbursement of the loan no later than 10 calendar days from the date of loan approval.
  • The eight-week period of borrower payroll costs that determines the amount of forgiveness for PPP loans begins on the date the lender makes the first disbursement of the PPP loan to the borrower.

Meanwhile, pages 21-24 of the interim final rule detail the documentation and attestations lenders need to obtain from borrowers. The rule says the SBA will hold harmless any lender that relies on such borrower documents and attestation, as required by the CARES Act.

ICBA has added information from the Treasury/SBA FAQs to its own FAQs on the PPP. Nevertheless, key questions remain unanswered. ICBA continues to ask Treasury and the SBA to provide definitive guidance on:

  • Whether banks can lend to their directors with eligible small businesses, and
  • Whether owner draws or distributions count as payroll costs.

ICBA President and CEO Rebeca Romero Rainey said ICBA will let community bankers know as soon as there are answers to these questions. "And we thank you for all of your efforts to support local communities throughout the United States at this challenging time," she wrote in a message to community bankers.