PPP Loans Over $2 Million – Expect Longer Than Normal SBA Review Periods

PPP Loans Over $2 Million – Expect Longer Than Normal SBA Review Periods

If you have a larger PPP loan, specifically $2 million or more, and have applied or are preparing to apply for Loan Forgiveness, you should anticipate the SBA review and decisioning time to exceed 90 days. This does not necessarily mean your loan will not be forgiven.

As previously announced, the SBA is reviewing all loans of $2 million or more, and other loans as appropriate, for eligibility, fraud or abuse, and compliance with loan forgiveness requirements. Although the SBA has not made an official announcement regarding the longer than expected review time, according to an article that appeared in American Banker, many lenders are receiving questions from concerned customers.  

Proactively Prepare 

Knowing that the SBA is going to review all loans $2 million or more, we recommend that you proactively gather, and save electronically, the “Documents that Each Borrower Must Maintain but is Not Required to Submit” listed on page 12 of the 3508 PPP Loan Forgiveness 3508 Application. In addition, you should read and be prepared to complete the For Profit Loan Necessity Questionnaire or Not For Profit Loan Necessity Questionnaire.

As stated in the Interim Final Rule, page 6:

As a general matter, the lender will review the application and make a decision regarding loan forgiveness. The lender has 60 days from receipt of a complete application to issue a decision to SBA. If the lender determines that the borrower is entitled to forgiveness of some or all of the amount applied for under the statute and applicable regulations, the lender must request payment from SBA at the time the lender issues its decision to SBA. SBA will, subject to any SBA review of the borrower’s loan(s) or loan application(s), remit the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment, not later than 90 days after the lender issues its decision to SBA.