WASHINGTON—Following the Paycheck Protection Program's (PPP) extension to May 31, the Small Business Administration (SBA) has issued a new procedural notice for first-draw PPP borrowers seeking a loan increase. The notice clarifies that eligible borrowers have until the program deadline to submit a request for a loan increase.
Previous guidance required loan increase requests to be submitted by March 31.
The SBA notes that lenders will not be able to process loan increase requests if there is a hold code on the borrower's application until the lender resolves the hold code according to other procedural notices in place.
While new applications for PPP loans cannot be accepted after May 31, the SBA has until June 30 to process pending applications, which is when hold codes and increase requests must also be addressed.
Concerns Raised
NAFCU noted it has raised concerns about the amount of loans backlogged due to hold codes and has called on the SBA to clear the codes before the program ends. The agency has issued two procedural notices detailing lenders' certification requirements and use of machine learning to resolve the issues.