Lenders' Letter to SBA Administrator Guzman on PPP Agent Fee Caps — Exhibit 5 to OTO Analytics Complaint (Aug. 16, 2021) — Oto Analytics v. Benworth

Summary

Exhibit 5, filed 01/24/23 as Document 1-5 in Case 3:23-cv-01034-GMM, is a letter dated August 16, 2021 to The Honorable Isabella Casillas Guzman, Administrator of the U.S. Small Business Administration, on the absence of PPP loan agent fee regulations for 2021 PPP loans. The letter states that Fountainhead, Benworth and SEDCO made 627,566 PPP loans in 2021, for approximately $8.7bn, or 9.39% of all PPP loans made that year. It states that neither Treasury nor SBA issued rules on maximum agent fees for 2021 loans, causing disputes between lenders and loan agents. It asks SBA to provide that no lender may pay more than 50% of its processing fees on PPP loans of $50,000 and under to a loan agent. The signature block names Chris Hum of Fountainhead SBF, Bernie Navarro of Benworth Capital Partners and Brooke Mirenda of SEDCO.

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EXHIBIT 5
Case 3:23-cv-01034-GMM   Document 1-5   Filed 01/24/23   Page 1 of 3

,,......, I 
tl FOUNTAINHEAD
August 16, 2021 
The Honorable Isabella Casillas Guzman 
Administrator of the U.S. Small Business Administration 
409 3rd Street SW 
Washington, D.C. 20416 
Re: The Absence of PPP loan agent fee regulations for 2021 PPP loans 
Dear Administrator Guzman: 
We write to you regarding an apparent oversight by SBA in NOT issuing regulations concerning loan 
agent fees paid on Paycheck Protection Program (PPP) loans made during calendar year 2021. While 
this oversight has caused some problems for various lenders due to the absence of this guidance, this 
issue can be easily rectified if SBA takes quick action. 
Our three Florida-based small business lending firms (Fountainhead, Benworth and SEDCO) made 
627,566 PPP loans in 2021 (for approximately $8.7bn) which represents 9.39% of all PPP loans made 
this year (and approximately 3.14% of the dollar amount of PPP loans made in 2021). While none of our 
lending firms are household names, we all pivoted our businesses to respond to the dire needs of small 
businesses and contributed significantly to the government's economic recovery efforts. Out of 5,242 
participating PPP lenders in 2021, our three firms helped save an estimated 690,000 American jobs. 
In early April 2020 with the launch of the first round of PPP loans, Treasury issued regulations 
regarding the maximum fee a participating PPP lender could pay a "loan agent" for their PPP loan 
referrals. These maximum loan agent fees ranged from between 16.67% and 25% of the lenders' 
processing fees (no more than 1 % of the loan amount could be paid on PPP loans up to $350,000; no 
more than 0.5% of the loan amount could be paid on PPP loans between $350,000 and $2,000,000; and 
no more than 0.25% of the loan amount could be paid on PPP loans above $2,000,000). 
Unfortunately, with the passage of round three of PPP loans in late December 2020 (which enabled 2021 
PPP loans to be made), neither Treasury nor SBA issued regulations ( or updates to existing regulations) 
regarding the maximum loan agent fees that lenders could pay for referrals. Especially problematic was 
that the lender processing fees earned on the smallest PPP loans (those of $50,000 or less) were 
dramatically changed from 2020 PPP loans to incentivize lenders to make these smaller loans to 
underserved small business owners. However, no regulation has been issued regarding the maximum 
fee a lender can pay a loan agent for these particular 2021 PPP loan referrals. The absence of this 
guidance has caused considerable ambiguity and unnecessary disputes between lenders and loan agents. 
800-770-1504 
www.fountainheadcc.com 
3216 W. Lake Mary Blvd . 
Lake Mary, FL 32746 • 
Case 3:23-cv-01034-GMM   Document 1-5   Filed 01/24/23   Page 2 of 3

,,......, I 
tl FOUNTAINHEAD
We believe this oversight can be rectified quickly and easily with the issuance of a regulation about 
these smaller 2021 PPP loans regarding the maximum amount a lender may pay a loan agent on each 
referred PPP loan made in 2021. Our suggestion would be that SBA issue a short regulation (in the 
Federal Register and/or in your PPP FAQ's) indicating that no lender may pay more than 50% of their 
earned processing fees made on these smaller ($50,000 and under) PPP loans to any loan agent. 
We urge you to make this simple fix and end this ambiguity so we may refocus our efforts on 
continuing to support small businesses with other SBA loan programs. 
Thank you for your consideration. 
Sincerely, 
Chris Hum, 
Founder/CEO 
Fountainhead SBF 
Bernie Navarro, 
Founder/CEO 
Benworth Capital Partners 
Brooke Mirenda, 
President & CEO 
Sunshine State Economic Development Company (SEDCO) 
800-770-1504 
www.fountainheadcc.com 
3216 W. Lake Mary Blvd . 
Lake Mary, FL 32746 • 
Case 3:23-cv-01034-GMM   Document 1-5   Filed 01/24/23   Page 3 of 3

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