FWW Alert: Key Points for Lenders - Paycheck Protection Program Under the CARES Act
4/2/2020
As a federal legislative response to the COVID-19 crises, the CARES Act was enacted on March 27, 2020, and has created a brave new world for lenders to serve their business clients during uncertain economic times. The United States Small Business Administration ("SBA") is creating guidance on implementing the Paycheck Protection Program under the CARES Act. Some of the relevant details for lenders covered in the alert are set forth below.
- Lenders need to qualify to process, close, disburse, or service loans made under the Paycheck Protection Program
- Application for Approval as Lender
- Amount of the SBA loan guaranty under the Program
- Required due diligence prior to extending loans under the Program
- Terms and conditions of Program loans
- Capital, reserves, and fees incentives for lenders to participate in the Program
- Sale of the loans on the secondary market
- Required documents for a loan forgiveness
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