SBA updates FAQs to address agent fees and EIDL advances
August 13, 2020
By: Mark A. Mangano
On August 11, 2020 the Small Business Administration (SBA) updated two separate FAQs related to the Paycheck Protection Program (PPP). The updates address agent fees and Economic Injury Disaster Loans (EIDL).
The update to “Paycheck Protection Program Loans Frequently Asked Questions (FAQs)”1 added two questions. First, the SBA stated that payment or nonpayment of fees to an agent or other third party is not material to the SBA’s guarantee of a PPP loan or payment of fees to lenders. Second, group care benefits may include vision and dental benefits.
The update to “Paycheck Protection Program Frequently Asked Questions (FAQs) on PPP Loan Forgiveness”2 added a section related to how EIDL advances will be treated in the loan forgiveness process. The EIDL questions reaffirm that EIDL advances will be deducted from PPP forgiveness payments to banks. If EIDL forgiveness reduction results in a remaining balance on a PPP loan after forgiveness payments, the borrower will be required to repay the balance over the remaining period of the PPP loan.
The maximum amount for EIDL advances was $10,000. Many advances were for less than the maximum amount. After forgiveness, banks may be servicing PPP loans with very small balances and payments over a period of two or five years.