The Small Business Administration (SBA) issued two interim final rules (IFRs) providing paycheck protection program (PPP) borrowers and lenders with additional information on loan forgiveness and the loan review process. The agency previously released the loan forgiveness application for borrowers; NAFCU has consistently sought additional guidance for lenders on the issue.
Key things for credit unions to know from the IFR on loan forgiveness:
- Application: In order to receive loan forgiveness, borrowers must complete the loan forgiveness application (Form 3508) and submit it to their lender. Lenders then have 60 days from receipt of a complete loan forgiveness application to issue a decision to the SBA; lenders are also responsible for notifying borrowers of loan forgiveness amounts. The SBA will remit payment to the lender no later than 90 days after the lender makes a decision. If only a portion of the loan is forgiven and a balance remains, the borrower must repay on or before the two year maturity.
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