Information for Lenders in the Paycheck Protection Program

By March 31, 2020White Papers

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On March 27, 2020, President Trump enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  The bill is a significant piece of legislation intended to provide relief for businesses, individuals, and the economy at large as the world grapples with the difficulties of the COVID-19 outbreak.  In other resources, S.R Snodgrass has focused on an overview of the bill, ways that small businesses and nonprofit organizations can take advantage of the benefits, and the tax implications (all available on our Resources page). This paper discusses the implications for a lender that would like to participate in the CARES Act relief by providing loans to customers under the Small Business Administration (SBA)’s 7(a) loan program, Paycheck Protection Program (PPP).  In addition to the PPP, lenders can participate in the 7(b) Economic Injury Disaster Loan (EIDL) program.