The nation’s credit unions have been through the wringer over the past several weeks when it comes to the Paycheck Protection Program (PPP). They have had to make challenging decisions, such as whether or not to offer PPP loans, how to manage the volume of applications and how to ensure they are keeping up with new guidance as it comes out. While some credit unions jumped in feet first, others explored alternative methods of providing relief to small business owners.
Now, that the second round of PPP funding has begun, credit unions that did not participate in the first round of funding may have another chance. And, with $60 billion of the second round’s $310 billion earmarked for credit union and community bank lending, the appeal of participating may have increased.
To help guide the strategic conversations CU executives will have with their senior leadership, lending and board teams, we’ve put together a list of some items credit unions should consider prior to offering PPP loans.
What do credit unions need to know about becoming an approved PPP lender?
To make PPP loans, credit unions must first be approved by the SBA. Existing SBA lenders are eligible to make PPP loans, but non-existing SBA lenders must complete the CARES Act Section 1102 Lender Agreement. This is an expedited SBA lender agreement and allows a lender to offer PPP loans. This agreement expires on September 30, 2020.
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