The SBA on Tuesday announced two lender updates, one on economic injury disaster loan reconciliation payments and another on the Paycheck Protection Program’s lender processing fee payment and 1502 reporting process.
EIDL reconciliation payments
- The SBA will remit reconciliation payments Feb. 9, 2021 through Feb. 19, 2021 for any loan with an SBA forgiveness payment that was reduced by the amount of an EIDL Advance.
- PPP lenders are not required to request remittance of the reconciliation payment. SBA will automatically identify loans where SBA remitted a forgiveness payment to a PPP lender that was reduced by an EIDL Advance.
- The amount of the reconciliation payment will be equal to the previously deducted EIDL Advance amount, plus interest through the remittance date. SBA will use the interest accrual method currently identified in the Forgiveness Platform.
- The SBA will remit the reconciliation payment to the ACH account identified by the PPP lender of record in the Forgiveness Platform. The ACH addenda for these payments will be identical to the on-going Forgiveness payment processing.
- After processing is complete, the amount of the reconciliation payment will be displayed on the Payment Dashboard under the Adjustment column. In addition, a payment reconciliation letter will be posted in the Forgiveness Platform for your records.
The SBA noted that PPP lenders are responsible for notifying borrowers of the reconciliation payment. The PPP lender is also responsible for re-amortizing the PPP loan and notifying the borrower of the amount of the next payment due or advising the borrower that the loan has been paid in full, whichever is applicable. If the amount remitted by the SBA to the PPP lender exceeds the remaining principal balance of the PPP loan (because the borrower made a payment on the loan), the PPP lender must remit the excess amount, including accrued interest paid by the borrower, to the borrower.
PPP lender processing fee payment and 1502 reporting process
According to the SBA, the purpose of this notice is to update SBA Procedural Notice 5000-20036, effective July 13, 2020, which informs PPP lenders of the reporting process through which PPP lenders will report on PPP loans and collect the processing fee on fully disbursed loans that they are eligible to receive. This update addresses changes made by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (P.L. 116-260), including new first-draw PPP loans and second -raw PPP loans, according to the SBA.