On April 28, 2020, the Small Business Administration (“SBA”) issued an additional interim final rule regarding loan disbursements under the Paycheck Protection Program (“PPP”). Under the rule, a lender must make a full, one-time disbursement of the PPP loan within ten (10) calendar days of loan approval. A loan is considered to be approved when the loan is assigned a loan number by the SBA. For loans that have been approved and not fully disbursed prior to the issuance of this rule, the ten (10) calendar-day period begins on April 28, 2020. However, lenders are not responsible for delays in disbursement due to a borrower’s failure to timely provide required loan documentation. If a borrower does not submit the required documentation within twenty (20) calendar days of approval, the loan will be cancelled.

The rule also discusses how lenders are to report PPP loans and receive processing fees. SBA Form 1502 will be made available for lenders to report PPP loans and collect the processing fee on fully disbursed loan. Lenders must electronically upload SBA Form 1502 information within twenty (20) calendar days after a PPP loan is approved or, for loans approved before availability of the form, by May 18, 2020. A link to the full rule can be found here.

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If you have questions about the PPP or would like more information, please contact one of the following Bowles Rice attorneys: