Best Practices: Recently Updated SBA Form 1919 Highlights Agency’s Continued Focus on 401(k) Plans
Effective November 3, 2020, the U.S. Small Business Administration (SBA) announced the update and release of SBA Form 1919, Borrower Information Form. SBA Information Notice 5000-20059. Among other things, the new Borrower Information Form highlights the SBA’s continued focus on businesses owned in whole or in part by a 401(k) plan (including Rollovers as Business ... Read More
Best Practices: PPP Loan Review Process
Under the CARES Act, SBA has the authority to conduct a review of any loan originated under the Paycheck Protection Program (“PPP”) at its discretion at any time. SBA may review a PPP loan for (i) Borrower eligibility, (ii) PPP loan amounts and use of proceeds and (iii) PPP loan forgiveness amounts (“Loan Review”). SBA ... Read More
Best Practices: PPP Loan Necessity Questionnaire
At the end of October, lenders who had submitted PPP loan forgiveness applications for a company that, together with its affiliates, received $2,000,000 or more in PPP financing began receiving a response from the U.S. Small Business Administration (“SBA”) requiring the completion of a new Loan Necessity Questionnaire by the PPP borrower and submission of ... Read More
Best Practices: SOP 50 10 6 Clarifies Requirements for SBA Loans Involving 401(k) Plans
Prior to the release of SOP 50 10 6, there had been a lot of confusion surrounding the processing of Small Business Administration (“SBA”) loans in which the borrower is owned by a 401(k) plan. SOP 50 10 6, which became effective October 1, 2020, clarifies some of the confusion. SOP 50 10 6 contains ... Read More
Best Practices: Which SBA PPP Loan Forgiveness Application Form Should Be Completed?
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), was signed into law, and the Paycheck Protection Program (“PPP”) was included as part of that legislation. The initial PPP Loan Forgiveness Application, the SBA Form 3508, was issued on May 15, 2020, requiring all documentation to support the borrower’s payroll ... Read More
Best Practices: SBA issues formal guidance on Change of Ownership Transactions involving PPP Loans but questions remain
Over the past several months, with no formal guidance in place, SBA lenders have been operating on an ad hoc basis when financing change of ownership transactions where a PPP loan is involved. In order to assist small businesses, many lenders, adopted prudent lending practices, such as the establishment of escrow accounts, and otherwise operated ... Read More
