CARES Act Section 1102 Lender Agreement
Summary
A blank form of the CARES Act Section 1102 Lender Agreement, under which a lender agrees to conditions set by the United States Small Business Administration (SBA) and the Department of Treasury in return for authorization to make Paycheck Protection Program SBA-guaranteed financing under the CARES Act (P.L. 116-136). It states that federally insured depository institutions, federally insured credit unions and Farm Credit System lenders are eligible unless they are designated in Troubled Condition or subject to a formal enforcement action over unsafe or unsound lending practices. The lender attests to its eligibility and supplies identifiers such as its RSSD ID or charter number. The agreement governs covered loans under section 7(a)(36) of the Small Business Act and ends with signature and attestation blocks and an incumbency certificate attachment.
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CARES Act Section 1102 Lender Agreement
________________________________________ (“Lender”) hereby agrees as a condition and in
consideration of authorization by the United States Small Business Administration (“SBA”) and
the Department of Treasury for Lender to make Paycheck Protection Program SBA-guaranteed
financing available as part of the CARES Act (P.L. 116-136) to eligible recipients, as follows
(the “Agreement”):
1. Lender Eligibility Requirements.
All federally insured depository institutions, federally insured credit unions, and Farm Credit
System regulated agricultural lenders (other than the Federal Agricultural Mortgage Corporation)
are eligible to participate in the Paycheck Protection Program unless they currently are
designated in Troubled Condition by their primary federal regulator or are subject to a formal
enforcement action by their primary federal regulator that addresses unsafe or unsound lending
practices.
Lender attests that it is:
Initial below
A federally insured depository institution; OR
A federally insured credit union; OR
A Farm Credit System institution (other than the Federal Agricultural
Mortgage Corporation) that applies the requirements under the Bank
Secrecy Act and its implementing regulations as a federally regulated
financial institution, or functionally equivalent requirements.
Lender attests that it is NEITHER:
Initial below
Designated in Troubled Condition by its primary federal regulator; NOR
Subject to a formal enforcement action by its primary federal regulator
that addresses unsafe or unsound lending practices.
Lender Information:
Institution Name:
Headquarters (City, State):
RSSD Identifier:
Primary Federal Regulator (check one): FRB
FDIC
OCC
NCUA
FCA
Lender Identifier (provide any that apply)
RSSD ID:
FDIC Certificate ID:
OCC Charter No.:
NCUA Charter No.:
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2. Application for Guaranty. This Agreement governs only “covered loans,” duly approved
under delegated authority hereafter for guaranty by SBA, that are subject to the Paycheck
Protection Program under the CARES Act, section 7(a)(36) of the Small Business Act, any
regulation or Federal Register notice published for the Paycheck Protection Program, the
Paycheck Protection Program Guide, the PPP Authorization or any other Loan Program
Requirements, as defined in 13 CFR §120.10, as amended from time to time (collectively “PPP
Loan Program Requirements”).
3. Approval of Guaranty. Lender will process and approve covered loans under delegated
authority from SBA. Lender assumes all obligations, responsibilities, and requirements
associated with delegated processing of covered loans made under the Paycheck Protection
Program. Any change in the terms or conditions stated in the loan authorization shall be made in
accordance with PPP Loan Program Requirements. For purposes of making covered loans to an
eligible recipient under the Paycheck Protection Program, Lender is responsible for all decisions
concerning the eligibility (including size) of a borrower for a covered loan in accordance with
PPP Loan Program Requirements. Lender may issue a covered loan approved under PPP
procedures without prior SBA review and approval of the processing and underwriting of the
loan by executing a PPP Authorization.
4. Closing and Disbursement of Covered Loans. Lender must close and disburse each covered
loan in accordance with the terms and conditions of the PPP Authorization and PPP Loan
Program Requirements. Lender must ensure that a note and all other Loan Documents (as
defined in this paragraph) and additional documents are properly executed and take such other
prudent loan-making actions consistent with the purposes and requirements of the Paycheck
Protection Program to protect and preserve the interests of Lender and SBA in the covered loan.
SBA is entitled, at any time, to examine and obtain copies of all notes, certifications and
documentation (herein, collectively, called “Loan Documents”), and all other records held by
Lender which relate to covered loans made pursuant to the Paycheck Protection Program.
5. Administration of Covered Loans. Lender will hold the Loan Documents and receive all
payments of principal and interest unless Lender is required to transfer or assign the note to SBA
or a third party at SBA’s direction. Lender must service and liquidate all covered loans made
under the Paycheck Protection Program in accordance with PPP Loan Program Requirements.
Except when SBA directs otherwise, all servicing actions will be the responsibility of the Lender
who must follow accepted standards of loan servicing employed by prudent lenders.
6. Purchase by SBA. By making any written demand that SBA purchase the guaranteed portion
of a loan, Lender will be deemed thereby to certify that the covered loan has been made, closed,
serviced and liquidated in compliance with the Paycheck Protection Program and PPP Loan
Program Requirements. This Agreement will remain in full force and effect with respect to the
covered loan after any purchase.
7. Prohibited Fees. Other than a fixed interest rate of 1.0% on the covered loan, Lender is not
permitted to charge or receive any bonus, fee, prepayment penalty, commission or other payment
or benefit from a borrower in connection with the making or servicing of any covered loan under
the Paycheck Protection Program.
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8. Termination.
A. A Lender’s authority to make a covered loan under this Agreement will terminate upon June
30, 2020. Either party may also terminate this Agreement upon not less than 10 days written
notice by certified mail to the other party. Termination will not affect the guaranty of any
covered loan previously authorized by SBA under the Paycheck Protection Program. It is
understood and agreed that Lender shall continue to comply with the Paycheck Protection
Program and PPP Loan Program Requirements with respect to any covered loan previously
authorized by SBA, including but not limited to the servicing and liquidation of such covered
loans. Termination by either party will not affect in any way the Lender’s continuing
obligation to comply with this Agreement, the Paycheck Protection Program, and all PPP
Loan Program Requirements with respect to any covered loan previously authorized by SBA
under this Agreement. If this Agreement is terminated by either Lender or SBA, Lender
hereby agrees that SBA may in its sole discretion transfer some or all of the covered loans
and/or the servicing and liquidation of such covered loans and related fees or income to SBA
or another entity approved by SBA. If SBA requires transfer of Lender’s covered loans,
Lender must cooperate with SBA to transfer responsibility for servicing and liquidating of
such covered loans.
B. Lender may terminate the guaranty as to any unassigned covered loan guaranteed hereunder
at any time prior to purchase by SBA upon notice to SBA. The guaranty of any covered loan
will be automatically terminated if the Lender does not submit to the SBA a demand to
purchase the guaranty or a request to extend the maturity within one year after the maturity of
the note.
9. Assignment. Lender may only assign or transfer its rights and obligations under this
Agreement with SBA’s prior written consent, which SBA may withhold in its sole discretion.
10. Interpretation of this Agreement.
A. This Agreement is subject to 7(a)(36) of the Small Business Act, including the Paycheck
Protection Program and PPP Loan Program Requirements and will be interpreted and
construed subject to, and to give full effect to, the broad scope of SBA’s power and authority
under that the Small Business Act and those requirements. Lender consents and agrees to all
rights and remedies available to SBA under the Small Business Act, the Paycheck Protection
Program and PPP Loan Program Requirements, as each of those are amended from time to
time, and any other applicable law.
B. To the best of its knowledge, Lender certifies that it is in compliance and will maintain
compliance with all applicable requirements of the Paycheck Protection Program, and PPP
Loan Program Requirements.
C. Lender understands that SBA’s rights and powers under the Small Business Act, the
Paycheck Protection Program and PPP Loan Program Requirements are in addition to, and
exist independent of, this Agreement, and that nothing in this Agreement may be asserted
against SBA under any circumstances to delay or prevent SBA’s full exercise of its rights
under applicable law.
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D. Lender agrees to hold SBA harmless for any action taken by SBA in enforcing this
Agreement, the Small Business Act, the Paycheck Protection Program and PPP Loan
Program Requirements against Lender for any covered loan made under this Agreement.
E. Lender agrees that any modification to this Agreement to be asserted against SBA or any
exemption to be claimed from any provision of the Small Business Act, the Paycheck
Protection Program, or PPP Loan Program Requirements is invalid, null, and void unless it is
made in writing by an official of SBA authorized to grant such modification or exemption
and was made after full disclosure to SBA of all material facts and circumstances.
F. This Agreement is to be interpreted under and construed in accordance with federal law.
G. This Agreement will inure to the benefit of, and be binding upon, the Lender’s authorized
successors and assigns.
By signing below, I hereby certify that I have the authority to execute this Agreement for the
Lender on whose behalf I am signing, and that all representations made are true and correct to
the best of my knowledge. I further acknowledge that on behalf of the Lender I have also
submitted an Incumbency Certificate attached hereto. I further acknowledge that any false
statements made to the U.S. Small Business Administration and Department of Treasury can
result in criminal prosecution under 18 U.S.C. 1001, 15 U.S.C. 645 and other provisions and
imposition of civil money penalties under 31 U.S.C. 3729.
IN WITNESS WHEREOF, the undersigned has duly executed this Agreement.
______________________________________
Name of Lender
______________________________________ ______________________
Signature Date
______________________________________
Name and Title
ATTEST/WITNESS
I _________________________________ hereby represent and warrant that I am a duly elected
or appointed Secretary or an Officer of __________________________________ (the “Lender”)
and that ____________________________________________ is duly authorized and has the
legal capacity to execute this Agreement on behalf of the Lender.
Signature: ______________________________________
Name and Title: ______________________________________
Attachment: Incumbency Certificate
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File and source
- File
- 2020-06_SBA-Form-3506-CARES-Act-Section-1102-Lender-Agreement-04022020-508.pdf
- Size
- 183,074 bytes
- SHA-256
- 4504868ab6ef5ad6cff55e0a03c969e1ab7f43d56a8cab3bcfa0fd60a8961f15
- Original
- www.sba.gov