The Department of the Treasury has put out its guidance for prospective lenders and borrowers looking to get SBA loans. The program will officially launch on Friday, and the attached application is what business owners will need in hand when they apply.
The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.
Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.
PAYCHECK PROTECTION PROGRAM (PPP) INFORMATION SHEET
Who is eligible to lend? All existing SBA-certified lenders will be given delegated authority to
speedily process PPP loans.
All federally insured depository institutions, federally insured credit unions, and Farm Credit
System institutions are eligible to participate in this program.
A broad set of additional lenders can begin making loans as soon as they are approved and
enrolled in the program. New lenders will need to submit their application to
DelegatedAuthority@sba.gov to apply with the SBA.
Are these loans guaranteed by the SBA? Yes, the SBA guarantees 100% of the outstanding
balance, and that guarantee is backed by the full faith and credit of the United States.
Are there guarantee fees? The SBA waives all SBA guaranty fees, including the upfront and
annual servicing fees.
What underwriting is required? You will need to verify that a borrower was in operation on
February 15, 2020. You will need to verify that a borrower had employees for whom the
borrower paid salaries and payroll taxes. You will need to verify the dollar amount of average
monthly payroll costs. You will need to follow applicable Bank Secrecy Act requirements.
How will lenders be compensated? Processing fees will be based on the balance of the
financing outstanding at the time of final disbursement:
Loans $350,000 and under: 5.00%
Loans greater than $350,000 to $2 million: 3.00%
Loans greater than $2 million: 1.00%
Lenders may not collect any fees from the applicant.
Who can be an agent? An agent is an authorized representative and can be:
Someone who prepares an applicant’s application for financial assistance and is
employed and compensated by the applicant;
Someone who assists a lender with originating, disbursing, servicing, liquidating, or
litigating SBA loans;
A loan broker; or
Any other individual or entity representing an applicant by conducting business with the
How will agents be compensated? Agent fees will be paid out of lender fees. The lender will
pay the agent. Agents may not collect any fees from the applicant.
Loans $350,000 and under: 1.00%
Loans greater than $350,000 to $2 million: 0.50%
Loans greater than $2 million: 0.25%
Can these loans be sold in the secondary market? PPP loans can be sold in the secondary
market. The SBA will not collect any fee for any guarantee sold into the secondary market.