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SBA Procedural Notice 5000-20032: Refinance of EIDL Loans with PPP Loan Proceeds

Summary

This is SBA Procedural Notice, Control No. 5000-20032, effective 6/19/20, addressed to all SBA employees and Paycheck Protection Program lenders on Refinance of EIDL Loans with PPP Loan Proceeds and Lender Remittance of EIDL Refinance Proceeds to SBA. It says an EIDL loan may not be refinanced with a PPP loan when the PPP borrower received the EIDL loan before January 31, 2020 or after April 3, 2020. It says a PPP loan must be used to refinance the full amount of the EIDL loan when the borrower received EIDL funds from January 31, 2020 through April 3, 2020 and used them to pay payroll costs, not counting any EIDL advance. It adds that lenders must disburse and remit loan proceeds used to refinance an EIDL loan directly to SBA.

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“SBA Procedural Notice 5000-20032: Refinance of EIDL Loans with PPP Loan Proceeds.” Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-the-treasury-guidance-on-refinance-of-eidl-loans-with-pp-0343cf6cc3/, SHA-256 940dcb2a4276066a14a8df668480e3cbb0eb878a88bdc9f8dc60dc778ac4046e.

Full text

                       SBA Procedural Notice

TO: All SBA Employees and Paycheck Protection                                       CONTROL NO.: 5000-20032
Program Lenders
                                                                                    EFFECTIVE: 6/19/20
SUBJECT: Refinance of EIDL Loans with PPP
Loan Proceeds and Lender Remittance of EIDL
Refinance Proceeds to SBA



The purpose of this Notice is to provide guidance for when Paycheck Protection Program (PPP)
loan proceeds must be used to refinance U.S. Small Business Administration (SBA) Economic
Injury Disaster Loans (EIDL) and to inform PPP Lenders of the procedure for remitting to the
SBA any PPP loan proceeds designated for the refinance of an EIDL.

An EIDL Loan May Not Be Refinanced with a PPP Loan When:

   •   The PPP Borrower received the EIDL loan before January 31, 2020 or after April 3,
       2020.

An EIDL Loan is Not Required to Be Refinanced with a PPP Loan When:

   •   The PPP Borrower received funds from an EIDL loan from January 31, 2020 through
       April 3, 2020; and

   •   The PPP Borrower used the EIDL loan for purposes other than payroll costs.

A PPP Loan Must Be Used to Refinance the Full Amount of the EIDL Loan When:

   •   The PPP Borrower received funds from the EIDL loan from January 31, 2020 through
       April 3, 2020; and
   •   The PPP Borrower used the EIDL loan funds to pay payroll costs.

The amount of the EIDL loan to be refinanced does not include the amount of any EIDL
“advance” (also referred to as an EIDL “grant”) received by the PPP Borrower, because the
EIDL advance does not need to be repaid.

PAGE 1 of 2                                                                                      EXPIRES:
                                                                                                  6/1/2021
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58

                                    Federal Recycling Program   Printed on Recycled Paper
For PPP loans where SBA Form 2484, “Lender Application Form – Paycheck Protection
Program Loan Guaranty,” Section D, Loan Amount Information, included an amount for the
“Refinance of Eligible Economic Injury Disaster Loan, net of Advance,” PPP Lenders must
disburse and remit loan proceeds used to refinance an EIDL loan directly to SBA (not to the PPP
Borrower).1

If the PPP Lender has already disbursed directly to the Borrower the loan proceeds allocated to
refinance an EIDL loan, the PPP Lender is responsible for notifying the Borrower of the amount
of PPP loan proceeds that must be remitted by the Borrower to SBA.

Borrowers and Lenders must electronically remit EIDL refinance payments to SBA using the
U.S. Treasury website Pay.gov (https://pay.gov/public/form/start/3723407) and completing the
SBA Form 1201, “Borrower Payments Form.” To ensure the payment is accurately applied, the
EIDL Loan Number must be entered in the SBA Loan Number field (NOT the PPP loan
number).

    •   Borrowers can obtain their EIDL loan payoff information by contacting the SBA Disaster
        Loan Servicing Center at (800) 736-6048.
    •   PPP Lenders can confirm the correct payoff information for the Borrower’s EIDL loan by
        contacting the PPP Lender Customer Service Line at 1-833-572-0502.

Questions concerning this Notice may be directed to the Lender Relations Specialist in the local
SBA Field Office. Local SBA Field Offices can be found at https://www.sba.gov/tools/local-
assistance/districtoffices.




William M. Manger
Associate Administrator
Office of Capital Access




1
 Direct disbursement to SBA of EIDL refinance proceeds is required by the sixth PPP Interim Final Rule, 85 FR
26321, 26323 (May 4, 2020).
PAGE 2 of 2                                                                                     EXPIRES: 6/1/2021
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58

                                        Federal Recycling Program   Printed on Recycled Paper

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