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October 01, 2020

Recent Updates on PPP from NADA, SBA, and US Treasury

SBA Statement on Availability of PPP Loans

On April 15th, the SBA released the following statement:
Update on Paycheck Protection Program (PPP):  In the near future, SBA expects the amount of processed PPP loan volume to reach the maximum amount authorized and appropriated by Congress. Once the authorization limit is reached, SBA will not be able to accept any new loan applications for the Paycheck Protection Program. This will mean that lenders will no longer be able to load PPP applications into the Capital Access Financial System (CAFS or E-Tran) [the Lender Gateway]. SBA is unable to maintain a queue for PPP applications. Further, PPP loan amounts may not be adjusted by lenders within the CAFS system. Additionally, once the authorization limit is reached, SBA will no longer be able to accept new lender applications to become PPP lenders. SBA is reaching out to the lending community to make them aware of this eventuality so that they may prepare and inform their small business customers of the situation. SBA will continue to inform its lending partners of new updates should Congress authorize additional funds.

NADA has signed on to a letter to Congress and is pushing hard for additional PPP funding. Additional funding is important for dealers who have yet to apply for a PPP loan or have applied for one but have yet to be approved and funded.   

NADA Issues Preliminary Guidance on use of PPP Loans & Forgiveness

Also on April 15th, NADA posted a document entitled PPP Loans: Use of Proceeds and Forgiveness NADA Preliminary Guidance. The document provides valuable insights into important issues involving the forgiveness elements of the PPP loan program. To the extent that a PPP loan is forgiven, it effectively becomes a grant from the federal government to the borrower. Please note that, as the document stresses, this information is preliminary and does not reflect the further guidance we expect to obtain from SBA/Treasury on, among other things, the issues noted. NADA will provide additional information as it becomes available.

US Treasury Department Updates FAQs for PPP Loans

Most recent update 4/15/2020

Finally, the U.S. Treasury Department updated its Paycheck Protection Program FAQs for borrowers and lenders. In addition, the Treasury Department updated its website CARES Act page with the following: