January 15, 2021

SBA issues notice on PPP loan increases

small bizThe Small Business Administration (SBA) issued a procedural notice Thursday regarding first draw paycheck protection program (PPP) loan increases. The notice, which impacts any loan that was approved on or before Aug. 8, 2020, details the circumstances under which borrowers may request a PPP loan increase from their original lender.

The PPP program officially reopened Monday, allowing community financial institutions to submit applications for first draw loans. Starting today, lenders with less than $1 billion in assets will be able to submit applications. All other lenders will gain access to the program Tuesday, Jan. 19.

The notice details how lenders can obtain the additional processing fee that is due on the increased loan or reapplication, as applicable.   

As outlined in the notice, an increase may be provided to:

  • partnerships: for any amount of partner compensations that was not included in the original loan amount request, and the if the SBA has not yet remitted any forgiveness amount;
  • seasonal employers: The consolidated appropriations act (CAA) altered the methodology for seasonal employees, indicating that a seasonal employee can receive the maximum loan amount based on the average payroll for any 12-week period beginning Feb. 15, 2019 – Feb. 15, 2020. If a seasonal employer can receive more funds under the new methodology, they may apply for an increase from the original lender if the SBA has not remitted any loan forgiveness;
  • farmers and ranchers: Provisions in the CAA also changed the methodology for calculating the maximum amount a farmer or rancher could receive as long as the SBA has not provided any loan forgiveness yet.
  • borrowers that did not accept the full amount of the first draw PPP loan; and
  • borrowers that fully repaid a PPP loan before Dec. 27, 2020, may reapply for a first draw loan in an amount they are eligible for under current rules if the SBA has not yet remitted any loan forgiveness.

Relatedly, NAFCU Thursday sent Final Regulation summaries to members on the SBA's latest rules related to the PPP, including an interim final rule (IFR) making temporary changes enacted under the economic aid act and another IFR creating temporary second draw loans.

Additionally, the Federal Reserve is hosting a webinar Friday, Jan. 22, on its PPP Liquidity Facility to provide an overview and updates for all SBA-qualified PPP lenders. Registration is open now at Attendees may submit questions in advance via email to

Lenders will be able to begin approving increases to first draw loans starting Jan. 25.  Access NAFCU's PPP FAQs here, access the association's other pandemic-related resources here.