The SBA recently issued an interim final rule that was aimed at helping lenders get on board with the Paycheck Protection Program. It doubled the interest rate that lenders can charge for these loans from .5% to 1% and provided clarity around underwriting expectations.
Lenders need only collect the borrower’s application form that includes a series of borrower certifications along with a copy of the borrower’s payroll documentation and applicable Bank Secrecy Act requirements.
When the borrower requests forgiveness of the loan down the road, lenders do not need to conduct any verification as long as the borrower submits documentation supporting its request for loan forgiveness and attests that it has accurately verified the payments for eligible costs.
These are important updates for lenders and should allow them to enter the program with an increased confidence of it being both profitable and of being protected should borrowers misrepresent information in their application.