CARES Act: SBA Issues Procedural Notice for PPP Lender Processing Fee Payment and SBA Form 1502 Lender Reporting Process | Practical Law

CARES Act: SBA Issues Procedural Notice for PPP Lender Processing Fee Payment and SBA Form 1502 Lender Reporting Process | Practical Law

The Small Business Administration (SBA) issued a procedural notice (Notice) informing Paycheck Protection Program (PPP) lenders of the reporting process for disbursements, cancellations and terminations of PPP loans. It also outlines the procedure for collecting the processing fee on fully disbursed loans that they are eligible to receive.

CARES Act: SBA Issues Procedural Notice for PPP Lender Processing Fee Payment and SBA Form 1502 Lender Reporting Process

by Practical Law Finance
Published on 22 May 2020 • USA (National/Federal)
The Small Business Administration (SBA) issued a procedural notice (Notice) informing Paycheck Protection Program (PPP) lenders of the reporting process for disbursements, cancellations and terminations of PPP loans. It also outlines the procedure for collecting the processing fee on fully disbursed loans that they are eligible to receive.
On March 27, 2020, the US government passed the CARES Act in response to the COVID-19 crisis. Under the CARES Act, the Small Business Administration (SBA) is offering loans under the Paycheck Protection Program (PPP). On April 2, 2020, the SBA issued an interim final rule (Initial Rule) outlining the key provisions for implementing the PPP. Subsequently, the SBA has issued additional interim final rules (see Practice Note, Road Map to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Paycheck Protection Program).
On May 21, 2020 the SBA issued a procedural notice (Notice) informing PPP lenders of the reporting process for disbursements, cancellations and terminations of PPP loans and the procedure for collecting the processing fee on fully disbursed loans that they are eligible to receive.

Notice Provisions

The Notice provides information on:
  • The PPP processing fee, requesting payment of processing fees, lender confirmations required, and fee disbursement.
  • Non-payment of processing fee and fee clawbacks.
  • Creating an account and sharing login credentials for the FTA Lender Portal.
  • Reporting of PPP loan disbursements, cancellations and terminations on SBA Form 1502.
  • Reporting a PPP loan as cancelled in E-Tran Servicing.
  • Lender responsibility for the actions of its Lender Service Provider.
  • When a loan is sold, which lender is responsible for 1502 reporting to SBA.
  • Ongoing reporting requirements for PPP loans.
The SBA will begin accepting SBA Form 1502 reports on fully disbursed or cancelled PPP loans on May 22, 2020.

More Information

For summaries of the SBA PPP, see:
For additional guidance from the Treasury Department, see: