Dear Community Banker:
The Small Business Administration last night issued several documents on the next round of the Paycheck Protection Program authorized by the end-of-year stimulus package. Here's the latest.
The new documents include:
Following the passage of ICBA-advocated stimulus provisions simplifying PPP loan forgiveness and supporting a new round of PPP lending, the interim rules include answers to questions about registration, loan underwriting, fees, electronic submissions, reporting disbursements, agent fees, and more.
The interim rules note that second-draw PPP loans generally are guaranteed by the SBA under the same terms as first-draw loans, though these borrowers are generally required to have 300 or fewer employees, exhausted their first-round funds and a 25 percent or greater revenue reduction from 2019 to 2020.
The guidance notes that the Economic Aid Act set aside funds for lending by community financial institutions, first-draw PPP borrowers, and the smallest businesses. Further, it says the SBA will accept PPP loan applications only from community financial institutions for at least the first two days after the PPP loan portal reopens.
The guidance also says PPP lenders should encourage borrowers to complete a new demographic reporting section on the PPP borrower application to help the program reach underserved, minority-owned, veteran-owned, and women-owned businesses.
While ICBA continues studying these documents, additional information is available on the SBA and Treasury PPP pages, and Independent Bankers Association of Texas matrix of the law's PPP updates, and ICBA's summary of the stimulus package's community banking provisions.
ICBA's next Community Bank Briefing featuring 2021 updates is scheduled for 2 p.m. (Eastern time) tomorrow, Jan. 8. During the 60-minute webinar, ICBA experts will address the important SBA actions and discuss legislative developments. Participants are encouraged to submit questions prior to the briefing or bring them to the briefing as the ICBA team will answer questions from community bankers.
Meanwhile, we will continue to provide you the very latest information as it becomes available.
More than 9,000 community bankers sent more than 65,000 messages to Congress and Federal regulators in 2020. Let’s review what community banks did this year on the advocacy front.
While the SBA writes new rules on the next round of the Paycheck Protection Program, the ICBA-advocated fix to Economic Injury Disaster Loan advances is effective immediately and retroactive.