SBA PPP/Forgivable Loan Eligibility

Lenders who are already authorized to make loans under the SBA’s existing 7(a) loan program are automatically eligible to make Paycheck Protection Loans. The SBA and the Treasury Secretary will extend eligibility to additional qualified lenders that do not currently participate in such program. Participating lenders will be permitted to determine borrower eligibility under the Paycheck Protection Program, and will be entitled to make and approve Paycheck Protection Loans, without SBA review. Participating lenders will be directed to underwrite loans not based on borrower repayment ability, but rather whether the borrower was in operation on February 15, 2020, with one or more employees or independent contractors.

Repayment of a Paycheck Protection Loan will be 100% guaranteed by the SBA.

The SBA will not charge any fees on a Paycheck Protection Loan. Participating lenders will be entitled to charge a fee, as a percentage of the original principal balance of the Paycheck Protection Loan, not to exceed the following amounts:

  • For a loan with original principal balance of $350,000 or less, 5%;
  • For a loan with original principal balance greater than $350,000 but less than $2 million, 3%; and
  • For a loan with original principal balance of $2 million and above, 1%.

Agents that assist borrowers in preparing an application for a Paycheck Protection Loan will be entitled to a fee not to exceed the amount prescribed by the SBA for such services.

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