How To Become A Paycheck Protection Program Lender

How to Become aPaycheck Protection Program (PPP)LenderApril 23, 2020Based on a presentation by SBA for Federal Regulators

Goals Provide an update on the Paycheck Protection Program(PPP) Recognize the needs of financial institutions who maywish to participate as a (PPP) lender Provide an overview of how to apply to become a PPPlender and what steps to take as well as where to findmore information2

PPP Loan Data SummaryLoan Count1,661,367Net Approved Dollars 342,277,999,103*Lender Count4,975*Net Approved Dollars do not reflect the amount required for reimbursementtolenders per statute within the CARES Act.*Net Approved Dollars do not reflect the amount required for reimbursementtolenders per statute within the CARES Act.5 3

PPP Loan Data Summary - States and TerritoriesApprovedStatePPP 3,797Approved PPPAmount 921,927,504 4,862,690,120 2,722,726,557 419,583 4,846,959,062 33,413,693,192 7,392,960,359 4,151,934,451 1,247,218,727 1,090,415,848 17,863,199,837 9,464,475,442 102,418,346 2,046,450,982 4,315,688,444 1,850,034,026 15,972,578,071 7,491,445,351 4,288,652,108 4,149,467,684ApprovedStatePPP 0OK35,557Approved PPPAmount 5,100,534,501 10,360,907,178 6,537,733,687 1,944,425,549 10,381,310,070 9,014,060,040 7,547,822,023 12,619,835 2,481,000,606 1,470,300,136 8,005,752,270 1,548,384,035 2,988,890,489 2,006,858,477 9,527,794,260 1,424,408,711 2,013,939,889 20,345,681,101 14,108,889,927 4,615,708,450ApprovedStatePPP ,421WI43,395WV7,861WY7,618Approved PPPAmount 3,806,104,476 15,697,648,689 658,573,638 1,335,777,801 3,807,578,397 1,369,616,339 6,542,045,089 28,483,710,273 3,695,399,459 8,721,170,223 62,242,612 1,000,127,478 6,959,680,159 8,317,705,842 1,351,223,328 837,018,372Approvals through 4/16/2044

PPP Loan Data Summary - Loan SizeLoan Size 150K and Under 150K - 350K 350K - 1M 1M - 2M 2M - 5M 4,412Approved Dollars 58,321,791,761 50,926,354,675 80,628,410,796 57,187,983,464 64,315,474,825 30,897,983,582% ofCount74.03%13.49%8.44%2.48%1.30%0.27%% ofAmount17.04%14.88%23.56%16.71%18.79%9.03% Overall average loan size is 206KApprovals through 4/16/2055

PPP Loan Data Summary Industry by NAICS SubsectorNAICS Subsector DescriptionConstructionProfessional, Scientific, and Technical ServicesManufacturingHealth Care and Social AssistanceAccommodation and Food ServicesRetail TradeWholesale TradeOther Services (except Public Administration)Administrative and Support and Waste Management and Remediation ServicesReal Estate and Rental and LeasingTransportation and WarehousingFinance and InsuranceEducational ServicesInformationArts, Entertainment, and RecreationAgriculture, Forestry, Fishing and HuntingMiningPublic AdministrationManagement of Companies and 113,247Approved Dollars 44,906,538,010 43,294,713,938 40,922,240,021 39,892,493,481 30,500,417,573 29,418,369,063 19,489,410,472 17,707,077,167 15,285,814,286 10,743,430,227 10,598,076,231 8,177,041,995 8,062,652,288 6,675,630,276 4,939,280,138 4,374,343,877 3,894,793,207 1,197,353,586 1,170,748,130 1,027,575,137% 5%0.34%0.30%Approvals through 4/16/2066

PPP Loan Data Summary PPP Lenders – Highest Approved DollarsLenderApproved LoansApproved DollarsAverage Approved 310,64240,746 14,071,396,427 10,309,843,746 9,612,090,368 7,778,303,458 6,555,028,971 6,114,676,731 6,057,787,355 4,406,088,115 4,356,840,783 4,267,336,254 4,190,129,500 3,889,799,524 3,392,990,074 2,978,045,260 2,966,427,908 515,304 321,209 456,371 231,538 234,703 236,819 230,878 412,516 306,496 451,236 349,148 154,658 350,769 279,839 72,803Approvals through 4/16/2077

Basics of PPP LoanIntent of program is to help smallbusinesses cover payroll costs foreight-week period 100% SBA guarantee 10 million maximum loanamount Fixed 1% interest rate Maturity of two years Payments are deferred for sixmonths (interest does accrue) Loans can be made up to June 30,2020 or when PPP funds expire Loans can be forgivable Loan disbursement must beginwithin 10 calendar days of gettingSBA loan number8

Basics of PPP Loan PPP loans are meant to cover up toeight weeks of average monthlypayroll (based on 2019 figures)plus 25% of other operatingexpenses SBA will forgive the portion of loanproceeds used for payroll costsand other designated operatingexpenses for up to eight weeks,provided at least 75% of loanproceeds are used for payrollcosts.Eligible expenses for the eight-week forgivenessinclude: Payroll costs (excluding the prorated portion ofany compensation above 100,000 per yearforany person) include salary, commissions, tips;certain employee benefits including sick leaveand health care premiums, and state & localtaxes; Mortgage interest (not prepayment or principalpayments) and rent payments on mortgages andleases in existence after February 15, 2020; Utilities such as electricity, gas, water,transportation, phone and internet access forservices that began before February 15, 2020;and Additional wages paid to tipped employees.9

PPP - New Lender Application ProcessApplicant has an active SBAForm 750 Many institutions have an active SBAForm 750 and apply because:(1)they were not aware the Agreementstill existed/ is valid; or(2)they aren’t sure if they still neededto apply as they have not been activelyparticipating in the 7(a) loan programbefore PPP.SBA’s first level check identifies thatthese institution’s have activeagreements and are notified.Applicant is a NEW PPP Lender(federally-insured) The institution applies toparticipate in PPP by emailingSBA Form 3506 and anIncumbency Certificate toDelegatedAuthority@sba.gov(Form 3506 is available atwww.sba.gov/paycheckprotection)10

PPP - New Lender Application ProcessApplicant is a NEW PPP Lender (federally-insured)Application Next StepsSBA will: Check Documentation(complete and consistentapplication) Review Lender using data andother sources (Federal Regulator,etc.)Application is DeficientCommon Reasons Why: Wrong form Attest/ Witness section was notcompleted correctly Missing Incumbency Certificate(solution: use own Certificate or FS Form 1014) The officer who executed SBA Form3506 was excluded was the list ofofficers on the Incumbency Certificate Same officer who executed SBA Form3506 would attempt to “self-certify”his/ her authority11

PPP - New Lender Application ProcessApplicant is a NEW PPP Lender (federally-insured)Application is Approved by SBAIf deemed acceptable, the applicationis processed, the Paycheck ProtectionProgram Agreement is entered intoSBA’s CAFS system and the Lender isnotified.Time Considerations SBA has added additional supportpersonnel and systems to handlenew lender applications. Deficiencies are generally correctedon same day Turnaround time on approval isdependent on volume of applicationsand most federally insuredapplications are addressed within 48hours of initial submission.12

PPP - New Lender Application ProcessApplicant is now a newly approved PPP Lender (federally-insured)Critical JunctureAfter SBA approves new lenderapplication, an email is sent back tothe person who sent the application.The e-mail notification includesinformation on how to access SBA’selectronic delivery system forapplication processing.The approval email confirmation includesthe following: An “Intro to CAFS PowerPoint”(CAFS is SBA’s Capital Access Financial Systemwhich is the system SBA and SBA lenders use tooriginate, service and liquidate loans) A nine-digit code (example below).Alias TypeAuthentication NumberAlias123AB45CD The Lender follows the PowerPointinstructions to access CAFS and will getto the point where the nine-digit codeis required.13

PPP - New Lender Process Post-Application ApprovalApplicant is a NEWLY APPROVED PPP Lender (federally-insured)Process StepIssue Delegated Authority: DelegatedAuthority@sba.govNot Applicable Lender Service Providers:LSP.Agreements@sba.govCLS / CAFS /ETRAN Systems PPP Lender Instructions PPP Lender Assistance Hotline: 1(833) 572-0502 CLS: CLS@sba.govLender Gateway SBA Connect FAQs SBA Connect User Guide PPP Lender Assistance Hotline: 1(833) 572-0502Loan Applications Interim Final Rule Treasury Lender FAQs PPP Lender Instructions PPP Lender Assistance Hotline:1(833) 572-0502 Interim Final Rule Treasury Lender FAQs PPP SBA Site PPP Lender Assistance Hotline: 1(833) 572-0502 Loan Processing/Servicing CentersNot ApplicableTo Be DecidedLender Service ProviderSubmit LoanApplications(Loan Origination)Loan Processing & PolicyLoanServicing &ProcessingSBA Routing Help PPP Treasury Site Lender Application Form PPP SBA SiteLender AgreementsBecome anApproved SBALender or LSPSelf-Help ResourcesReporting!Self-Help ResourcesPolicy Questions(e.g., lender fees, reporting) PPP Treasury Site Treasury Lender FAQsSBA Routing Help 7aQuestions@sba.gov 7aPaycheckLoanProgramQuestions@sba.govComments on the Interim Final Rule should be directed to: PPP-IFR@sba.gov1914

SBA Lender GatewayPPP – Submitting Borrower Applications Via Lender GatewayTo register: Visit https://connect.sba.gov On the left side, click “Create an Account”15

SBA Lender GatewayEnter your email address and check your email for a confirmation link tocontinue creating your account.16

SBA Lender GatewayLogin to your new account, and click “Request Access” in the navigation bar.Then select “PPP – Paycheck Protection Lender Gateway” from the list of options.17

SBA Lender Gateway First select FRS, FDIC,NCUA, or Location ID Then enter thecorresponding numberfor your lendinginstitution In the second box, enterthe 9 digit code providedby SBA when you wereapproved for PPP lending Existing 7(a) lenders canfind this code in CAFS18

SBA Lender Gateway When you have successfully entered your lender institution number andAuthentication Number, you will receive a pop-up that says Success! Click the Connect logo to return home, and your PPP – PaycheckProtection Lender Gateway access will be displayed Click the PPP link to begin entering PPP applications19

SBA Lender Gateway The Lender Gatewayhas 8 screens. If an Agent isinvolved in the loan,select “Yes” toadvance to theAgent screen If an Agent is notinvolved in the loan,select “No” to skipthe second screen20

SBA Lender Gateway The Agent screen includes allcontact information for theAgent A second optional fieldenables you to enter anyfees associated with theAgent service21

SBA Lender Gateway The Application screenincludes primary applicationdetails Note: “Application Number”is for your institution’srecord keeping purposes.You may enter any uniqueidentifier here Be sure to select Yes or Noto the Business Franchisequestion to advance22

SBA Lender Gateway The Proceeds screen iswhere you log how the loanwill be used Click the Add Use ofProceeds button to fill in theProceeds information You may add as many use ofproceeds as necessary23

SBA Lender Gateway On the next screen, enterBorrower Information. Be sure to select either EINor SSN for the TaxIdentification Number Be sure to select either Yesor No to all four additionalform questions24

SBA Lender Gateway On the Principals screen,click Add Principal to inputappropriate information You may add as manyPrincipals as appropriate Remember to select EIN orSSN for Tax IdentificationNumber Also make sure to select Yesor No to all three questionsbefore proceeding25

SBA Lender Gateway The Eligibility screenincludes Lender Certificationthat application informationis correct This screen also includesLender Certification that theloan being submitted meetsthe Payroll ProtectionProgram criteria Please select Yes or No tocertify the loan26

SBA Lender Gateway At the Summary screen,please verify that all dataentered is correct When data is correct, clickSubmit You will immediatelyreceive a LoanAuthorization Number oran error code If successful, you will alsoreceive an email with theLoan Authorization Number If an error, correct thenecessary field(s) andresubmit27