Best Practices: SBA Releases Updated PPP Lender Processing Fee Payments and 1502 Reporting Process

Due to changes to the PPP loan program contained in the Economic Aid Act, the SBA released SBA Procedural Notice 5000-20091 on February 8, 2021, which updates the SBA Procedural Notice 5000-20036, effective July 13, 2020, concerning the PPP loan reporting process and processing fees.

Lenders must still continue to report fully disbursed PPP loans on SBA Form 1502 (the “1502”) within 10 calendar days after disbursement of a PPP loan.  First Draw PPP Loans and Second Draw PPP Loans may be included on the same 1502, but never on the same 1502 as a lender reports its regular 7(a) loans.  The 1502 may either be: (i) emailed to 1502@colsonservices.com, (ii) uploaded in the 1502 Dashboard, or (iii) delivered via Secure File Transfer Protocol.  Lenders may continue to list multiple PPP loans on a single 1502 or may submit separate 1502s for each PPP loan disbursed.

Upon the SBA’s receipt of the 1502, it will confirm no previous request has been made for the processing fee on the loan, that no processing fee payment has been previously made, and that the disbursed amount matches the approved amount in E-Tran.  Once confirmed and the lender has made it’s required one-time confirmation in the lender’s Fiscal Transfer Agent (“FTA”) Lender Portal, the SBA will calculate the processing fee owed and submit the fee to the lender using the ACH credit information provided by lender in the lender’s FTA Lender Portal.

The processing fee for First Draw PPP Loans made on or after December 27, 2020 is different from the processing fee that SBA was paying for First Draw PPP Loans made before December 27, 2020.  For new First Draw PPP Loans, SBA will pay originating lenders the following fees:

• 50% or $2,500, whichever is less, for loans of not more than $50,000;
• 5% for loans of more than $50,000, but not more than $350,000;
• 3% for loans of more than $350,000, but less than $2,000,000; and
• 1% for loans of at least $2,000,000.

The same processing fees, except for the 1% processing fee listed above, since no Second Draw PPP Loan may be more than $2,000,000, will be paid by the SBA for Second Draw PPP Loans disbursed.

Please remember that the SBA may review the payment of the processing fee at any time, including at the time of forgiveness purchase.  If the SBA determines the fee was paid erroneously or in the incorrect amount, the lender is responsible for paying the SBA back the fee it received in error.

PPP lenders are responsible for not only the initial 1502 reporting of a fully disbursed PPP loan, but must also provide monthly 1502 reports that include loan status information for all their PPP loans until the PPP loan has been paid in full.  These monthly 1502 reports are due on or before the 15^th of each month (or next business day after the 15^th).  If the original PPP lender sells the PPP loan to another lender, then the purchasing lender will then become responsible for including such PPP loan on its 1502 until the loan is repaid in full.  Please keep in mind that a PPP loan should not be shown as paid in full on a 1502 prior to the lender receiving the forgiveness amount, because it may actually prevent the forgiveness amount from being disbursed.

For more information concerning PPP loan reporting, contact the attorneys at Starfield & Smith, PC at 215.542.7070.