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New insight post breaks down SBA Procedural Notice on PPP loan servicing
In the latest insight post on NAFCU’s Lending Network, Regulatory Affairs Counsel James Akin breaks down a recent Small Business Administration (SBA) Procedural Notice on paycheck protection program (PPP) loan servicing that will help PPP lenders work with borrowers to seek forgiveness. In addition, the procedural notice outlines the requirements and restrictions associated with seeking an SBA loan purchase guaranty.
Akin discusses lender servicing requirements, including noting that lenders may extend PPP loan maturity beyond 5 years but must request SBA purchase of guaranty within 180 days after maturity, unless the lender is conducting liquidation and may not take collateral or require personal guaranties when extending the maturity. Additional analysis can be found in the post.
In September, 40 members of the U.S. House of Representatives signed a NAFCU-backed letter to SBA Administrator Isabella Casillas Guzman requesting the SBA review the paycheck protection program (PPP) “Good Faith Error” rule. NAFCU also heard from the SBA during the NAFCU Small Business Lending Working Group’s June meeting regarding updates to SBA lending programs in the aftermath of the PPP and strategies to increase credit union participation in SBA programs.
NAFCU will continue to work with the SBA to ensure that credit union lenders have clear guidance on resolution of PPP loans.
NAFCU member credit unions that are part of the NAFCU Network can provide feedback and insights on this topic.
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