SBA guidelines address unresolved first-draw PPP loans
Recently, the Small Business Administration (SBA) released a notice of procedure Notify lenders that the Paycheck Protection Program (PPP) platform will begin processing new second-draw PPP loan guarantee requests for borrowers who still have unresolved issues with their first-draw loans . Second Draw Submissions for Unresolved Borrowers will automatically move to a “Research Status”, providing lenders with the ability to submit the necessary documentation to support the resolution of outstanding First Draw issues. Information regarding unresolved issues and resolution assistance will also be provided by the SBA. Once outstanding First Draw issues are resolved, Second Draw Loan applications will automatically be submitted to the next processing step and will not require re-registration by the Lender. However, if an outstanding first drawdown issue cannot be resolved, lenders should withdraw a borrower’s second drawdown request from the platform. SBA notes that if a second drawdown request submitted before January 27 was rejected due to an unresolved first drawdown issue, the lender must resubmit the request. The SBA has also issued several other procedural notices related to the provisions of the Economic Aid Act (covered by InfoBytes here) which address, among other things, SBA Loan Program 7 (a) changes, the elimination of some 504 loan program fees, and one notice to lenders that the SBA has informed eligible borrowers of the assistance available under Section 1112 CARES.