President Biden signed into law a bill extending the Small Business Administration’s Paycheck Protection Program.
H.R. 1799, or the PPP Extension Act, allows loan applications for two months past the original cut-off date of March 31, and gives the SBA one additional month to process loan applications made by the new deadline of May 31.
The SBA also released guidance for how PPP lenders can clear hold codes and error messages.
The procedural notice clarified that the borrower is required to certify the information used to resolve the hold code or error message, “by obtaining a written borrower certification along with supporting documentation of the type identified for each Hold Code or Compliance Check Error Message in the First Revised Hold Code Notice.”
Once this is obtained, the lender can execute the updated certification within the platform, the SBA notice said. The lender must keep the borrower’s written certification and supporting documentation filed, and provide them to the administration as indicated in the ‘Lender Certification,’ the notice said. When this process is completed, the PPP platform will automatically move the loan guarantee application to the next stage of processing.
With the application extension, the SBA said it has been able to get “a validated machine learning scoring model,” which allows automatic processing of first-draw PPP loans with minimal risk of noncompliance with eligibility requirements, fraud, or abuse. Once deployed, the number of first-draw PPP hold codes would be “significantly reduced,” the administration said, adding that lenders will know the model is deployed when the loan subject to a hold receives an SBA loan number.
In the meantime, the SBA will remove error messages indicating a disqualifying criminal history or delinquent or defaulted federal student loan, based on changes to expand PPP loan access.