Newsroom

The Small Business Administration's (SBA) paycheck protection program (PPP) is set to reopen today at 10:30 a.m. Eastern as President Donald Trump Friday signed the relief package that provides $320 billion additional funds to the program. In a win for credit unions, a portion of the funds have been set aside for smaller lenders to help them serve small businesses in their communities.

The SBA also released a new guidance memo to ensure lenders access to PPP funds based on their institution size. It institutes a maximum dollar amount at 10 percent PPP funding authority that any lending institution will be able to originate, exclusive of the additional $60 billion preserved for smaller lenders.

The new PPP funding package includes $250 billion in new funding for the PPP, plus $30 billion set aside for small lenders with less than $10 billion in assets, and another $30 billion set aside for lenders with assets between $10 billion and $50 billion.

Following the new package's enactment, a bipartisan group of 74 representatives, led by Reps. Josh Gottheimer, D-N.J., and Fred Upton, R-Mich., urged House leadership to ensure the PPP stays fully funded to meet small businesses' needs throughout the pandemic.

As the original $349 billion of PPP funds were depleted after about two weeks of being open and some applications were awaiting approval, the SBA is also allowing batch processing for lenders to submit multiple loan applications that total a minimum of 15,000.

The SBA last week released updated FAQs that include a question (No. 31) asking borrowers to assess their economic need for a PPP loan. Although they met qualifications to apply for loans, several big companies came under fire for receiving loans through the program. Other new questions address what constitutes payroll costs, the ability of agricultural producers and farmers to apply for loans, and what employees count toward eligibility requirements.

It also released a new interim final rule to clarify promissory note requirements and that a business in bankruptcy is not eligible for a PPP loan, as well as a list of lenders, organized by state, that are providing loans through the program. Hundreds of credit unions are participating as lenders. Lender forms and guidance, including the application to become a PPP lender if not already an SBA-approved lender, are available here.

NAFCU continues to work closely with the SBA to ensure credit unions have the resources and guidance needed to provide these loans to members. The association last week asked the SBA to provide more guidance related to loan forgiveness provisions of the program to clarify when credit unions can begin accepting applications for forgiveness.

In addition, NAFCU will continue advocating that Congress ensure credit unions can meet their members' needs in future PPP funding efforts and set asides.

Access all NAFCU's coronavirus resources, including its PPP FAQs, here.