SBA Procedural Notice 5000-20024: Guidance on Whole Loans Sales of Paycheck Protection Program Loans (5/1/2020)
Summary
SBA Procedural Notice, Control No. 5000-20024, effective 5/1/2020, to all SBA employees and Paycheck Protection Program lenders, titled Guidance on Whole Loans Sales of Paycheck Protection Program Loans. It says PPP lenders may sell all of their interest in PPP loans to other participating lenders under 13 CFR § 120.432(a) without SBA's prior written consent, but only to lenders with a signed Loan Guarantee Agreement. The purchasing lender must take possession of the note and loan documents and service the loan, though it may have the originating lender subservice it, and it acquires the loan subject to SBA's existing rights including the right to deny liability on its guarantee. The originating lender must immediately notify SBA's Office of Credit Risk Management of any sale. The notice is issued over the name of Dianna L. Seaborn, Director, Office of Financial Assistance.
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Cite this document
“SBA Procedural Notice 5000-20024: Guidance on Whole Loans Sales of Paycheck Protection Program Loans (5/1/2020).”
Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-the-treasury-guidance-on-whole-loans-sales-of-ppp-loans-home-treasury-gov-system-files-8be86aa641/
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SBA Procedural Notice
TO: All SBA Employees and Paycheck CONTROL NO.: 5000-20024
Protection Program Lenders
EFFECTIVE : 5/1/2020
SUBJECT: Guidance on Whole Loans Sales of
Paycheck Protection Program Loans
The purpose of this Notice is to provide guidance to Lenders approved to participate in the Paycheck
Protection Program (“PPP”) regarding whole loan sales of PPP loans.
Lenders participating in PPP may sell all of their interest in PPP loans to other participating Lenders
in accordance with 13 CFR § 120.432(a). For purposes of PPP loans only, SBA’s prior written
consent is not required. All PPP loans must be sold to Lenders that have a signed SBA Form 750,
SBA Form 3506, or SBA Form 3507 (referred to individually as a “Loan Guarantee Agreement”).
The purchasing Lender must take possession of the note and the loan documents and service the loan.
The purchasing Lender, however, may elect to have the originating Lender subservice the loan and
hold the note and loan documents on behalf of the purchasing Lender. The purchasing Lender
acquires the PPP loan subject to SBA’s existing rights, including its right to deny liability on its
guarantee. The PPP loan will be purchased subject to the acquiring Lender’s applicable Loan
Guarantee Agreement.
The originating Lender must immediately provide SBA’s Office of Credit Risk Management with
notice of any PPP whole loan sale including the name of the purchasing Lender, together with a loan
list assembled in ascending order that includes the [SBA loan number, borrower name, original loan
amount, current amount principal balance, and maturity date] at the following e-mail address:
PPPLoanSales@sba.gov. For purposes of PPP loans only, the originating Lender will be considered
to meet the good standing and satisfactory performance requirements of 13 CFR § 120.433.
The purchasing Lender will be the party responsible to SBA with respect to all servicing actions,
including requests for advance purchases and loan forgiveness, and will be the party eligible for the
guarantee purchase of a PPP loan.
Please direct comments to John Wade at john.wade@sba.gov.
Dianna L. Seaborn
Director, Office of Financial Assistance
PAGE 1 of 1 EXPIRES: 5-1-2021
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
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