Joint Appendix for All Defendants, Exhibits 21–30, KServicing Wind Down Corp. v. Frohwein, Adv. No. 25-52372 (Bankr. D. Del.), Doc. 97-3 (April 9, 2026)
Summary
Part of the Joint Appendix for All Defendants, Exhibits 21-30, filed as Doc. 97-3 on April 9, 2026 in KServicing Wind Down Corp. v. Frohwein, Adv. No. 25-52372 (Bankr. D. Del.). It opens with Exhibit 21, a group text-message chat dated April 24, 2020 among Rob Frohwein, Kathryn Petralia, Sam Taussig, Nipun Goel, Deepesh Jain and others. They discuss almost 5500 applications approved for $320m overnight, whether the SBA's e-Tran system would open on Monday, an outside CPA's claim of a loan-calculation error, and a dispute with the bank partner CRB. The page closes with appendix pages of an Alvarez & Marsal report dated June 05, 2020 on Kabbage's PPP controls, listing the personnel interviewed.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Joint Appendix for All Defendants, Exhibits 21–30, KServicing Wind Down Corp. v. Frohwein, Adv. No. 25-52372 (Bankr. D. Del.), Doc. 97-3 (April 9, 2026).”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/joint-appendix-for-all-defendants-exhibits-21-30-kservicing-wind-down-0d63e7973f/
, SHA-256 4f6f8c99a865fce6ce50fdf9d1f3ec72b835a8b4b871c9ad6f8a5b1364c5a2b9.Full text
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 1 of 125
EXHIBIT 21
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 2 of 125
Chat with "Sam Taussig" <+13014129193> and 11 more
addresses on April 24, 2020
Deepesh Jain <+ 12028213408>
Laura Goldberg <+ 19174880142>
clint@flintriverhills.com
Kathryn Petralia <+16785966422>
+17068880969
+17732949576
Sam Taussig <+13014129193>
Nipun Goel <+16784804635>
Kate Prince <+14049876386>
Kristel Adler <+16094250252>
davidkmcgowan@yahoo.com
Rob Frohwein <rfrohwein@icloud.com>
Rob Frohwein <+ 14042906116>
Catherine Lynn <+ 12252796739>
Earliest item: 2020-04-24 00:05:16
Latest item: 2020-04-24 21:50:32
Friday 24 April 2020
Instant Message : Native Messages
From 00:05:16
Kathryn Petralia <+16785966422>
You are asking if our auto system can clear errors?
Instant Message : Native Messages
From 07:53:58
Rob Frohwein <+14042906116>
That was a good night. Almost 5500 applications approved for $320m
overnight!
Instant Message : Native Messages
From 07:55:40
Deepesh Jain <+12028213408>
What's the total count now? Sorry, I don't have access to the tool.
Instant Message : Native Messages
From 07:56:19
+17732949576
We've been working hard for 2B...trying to get there before our status...
A00205
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 3 of 125
Instant Message : Native Messages
From 07:56:39
+ 17732949576
Messages Image(2556519138).jpeg
Rc-...a, fo, L rr1n Rce.w't1or l Tr...-.
31,263 $1.954B
https:/Ip19-
content. icloud.com/MF8C7735ED?4AE1D502AE43 ?Fl 773A361641590A4
86F5EB571A876DAAC1D6C538.C01USN00
Instant Message : Native Messages
From 07:57:05
Deepesh Jain <+ 12028213408>
Loved an image
Instant Message : Native Messages
From 08:00:54
Kathryn Petralia <+ 16785966422>
Loved an image
Instant Message : Native Messages
From 08:01:35
davidkmcgowan@yahoo.com
There is 113mm in just agreeing to our calc, once we email them, we will
make it probably to 2 billion
Instant Message : Native Messages
From 08:02:37
Nipun Goel <+ 16784804635>
We're f'ing getting there - I've been reviewing apps thru the night.
Instant Message : Native Messages
From 08:03:48
Nipun Goel <+ 16784804635>
(And spenny)
Instant Message : Native Messages
From 08:55:26
Sam Taussig <+ 13014129193>
Rubio's people are saying e-Tran "should" fire up Monday AM. SBA hasn't
confirmed yet.
A00206
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 4 of 125
Instant Message : Native Messages
From 08:55:29
Deepesh Jain <+12028213408>
Looks like it will launching on Monday according to Rubio?
Should get us enough time to get a lot more apps in...
Instant Message : Native Messages
From 08:56:08
Nipun Goel <+16784804635>
Monday am? Are you kidding me?
Instant Message : Native Messages
From 08:56:28
Deepesh Jain <+12028213408>
You can get some sleep now Nipun :-)
Instant Message : Native Messages
From 08:56:32
Kathryn Petralia <+16785966422>
0mg
Instant Message : Native Messages
From 08:56:40
Nipun Goel <+16784804635>
Sam I'm going to kill you lolzzz
Instant Message : Native Messages
From 08:56:42
Sam Taussig <+ 13014129193>
"Should" is operative word
Instant Message : Native Messages
From 08:56:57
Kathryn Petralia <+16785966422>
Meaning it may be even later?!?
Instant Message : Native Messages
From 08:57:04
Sam Taussig <+13014129193>
Da government gonna do what da government gonna do
A00207
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 5 of 125
Instant Message : Native Messages
From 08:57:19
Nipun Goel <+16784804635>
I've been up all night getting apps approved
Instant Message : Native Messages
From 08:57:29
davidkmcgowan@yahoo.com
You still can't sleep Nipun
Instant Message : Native Messages
From 08:57:58
Sam Taussig <+13014129193>
"seemingly yes. SBA's response is Wc3'
I am trying to validate
Instant Message : Native Messages
From 08:58:06
Rob Frohwein <+14042906116>
Let's go team! In the final 3 hours, I mean 72 hours
Instant Message : Native Messages
From 08:58:17
Rob Frohwein <+14042906116>
I mean 168 hours
Instant Message : Native Messages
From 08:58:21
Rob Frohwein <+14042906116>
Oh, wait it's on
Instant Message : Native Messages
From 08:58:25
Rob Frohwein <+14042906116>
No it's off
Instant Message : Native Messages
From 08:58:38
Rob Frohwein <+14042906116>
Let's try to hit $Sb before it turns on!
A00208
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 6 of 125
Instant Message : Native Messages
From 08:58:42
Sam Taussig <+ 13014129193>
You wanted more time
Instant Message : Native Messages
From 08:58:53
Rob Frohwein <+14042906116>
I do
Instant Message : Native Messages
From 08:59:30
Kathryn Petralia <+16785966422>
Welcome to another Monday
Instant Message : Native Messages
From 09:00:46
+17068880969
It's Friday, there are only two more working days until Monday
Instant Message : Native Messages
From 09:01:05
Nipun Goel <+ 16784804635>
I think we've found EASY areas to throw bodies and hopefully, improving
OCR - I got thru at least 3-5mm last night.
Sorry Nan I didn't follow our standard packet process but we f'ing knocked
out a ton.
Instant Message : Native Messages
From 09:01:18
Kathryn Petralia <+16785966422>
My point is that every day is Monday
Instant Message : Native Messages
From 09:01:26
Kathryn Petralia <+16785966422>
Oh
Instant Message : Native Messages
From 09:01:29
Kathryn Petralia <+16785966422>
A00209
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 7 of 125
Instant Message : Native Messages
From 09:01:33
Deepesh Jain <+12028213408>
Loved "I think we've found EASY areas to throw bodies and hopefully,
improving OCR - I got thru at least 3-Smm last night.
Sorry Nan I didn't follow our standard packet process but we f'ing knocked
out a ton. "
Instant Message : Native Messages
From 09:03:20
Rob Frohwein <+14042906116>
That's the name of the book and movie "Every Day is Monday"
Instant Message : Native Messages
From 09:19:07
Rob Frohwein <+14042906116>
Our goal should be $Sb by Monday
Instant Message : Native Messages
From 09:19:13
Rob Frohwein <+14042906116>
(Or more)
A00210
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 8 of 125
Instant Message : Native Messages
From 09:36:12
Nipun Goel <+ 16784804635>
ms-FOyhGT.gif
https://p57-
content.icloud.com/ME006EA7BC16A8CB262FF056E8E2DD4C520FA7198
10D4CE6290E101B3D248B098.C01USN00
Instant Message : Native Messages
From 09:49:14
Sam Taussig <+ 13014129193>
Ok, SBA Cos picked up the phone. There will be a joint release from TRSY
and SBA (run by the WH) around when Trump signs with more details.
Briggs can neither "confirm nor deny Monday until the bill is signed"
but "SBA needs significant time to update e-Tran". Off the record: they
have no fucking idea how to deal with the $60B set aside.
A00211
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 9 of 125
Instant Message : Native Messages
From 10: 10:55
Sam Taussig <+ 13014129193>
Trump aid asked SBA if lenders could put Trump's signature on the loan
agreements.
IMG_3225.gif
https://p17-
content.icloud.com/MF370CCBA2D25F5E58BE221E42F3D0267E81324AB
919EDFA49FD2A489FF8CA0F4.C01USN00
Instant Message : Native Messages
From 10:11:44
+17732949576
If he wants to take the guarantee risk...we will make it happen
Instant Message : Native Messages
From 10: 16:42
Rob Frohwein <+14042906116>
Wish there was an app that could take your name and make it look like
Trump's signature with a big black Markie
Instant Message : Native Messages
From 10: 17:31
Kathryn Petralia <+16785966422>
Maybe the ink can have bleach in it to fight the virus
A00212
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 10 of 125
A00213
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 11 of 125
Instant Message : Native Messages
From 10:19:22
Rob Frohwein <+14042906116>
One of my favorite of all time
A00214
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 12 of 125
Instant Message : Native Messages
From 10:22:40
Rob Frohwein <+14042906116>
So someone sent this to Kate. Sam - do you want to follow up with
him. Doubt he's accurate - probably is just looking for biz.
voicemail-483.m4a
~/Library/SMS/Attachm ents/ba/10/10B4D76B-159 7-4AAB-9ES 7-
2AAEF1E1034C/voicemai l-483.m4a - This file type is not supported for
embedded threading. See attached child.
Instant Message : Native Messages
From 10:23:05
Kate Prince <+14049876386>
Sam he has now emailed and texted me too so I can forward the email
Instant Message : Native Messages
From 10:23:38
Rob Frohwein <+14042906116>
He says there's a glaring error in the calc
Instant Message : Native Messages
From 10:23:50
Sam Taussig <+13014129193>
Ok
Instant Message : Native Messages
From 10:24:03
Laura Goldberg <+19174880142>
Let's have CS ca11
Instant Message : Native Messages
From 10:24:09
Laura Goldberg <+19174880142>
Send to me
Instant Message : Native Messages
From 10:25:02
Rob Frohwein <+14042906116>
Bottom line let's hear what he has to say
A00215
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 13 of 125
Instant Message : Native Messages
From 10:25:26
Laura Goldberg <+19174880142>
Of course
Instant Message : Native Messages
From 10:25:27
Rob Frohwein <+14042906116>
From person (in email): Bob Allard gave me your number. I am a CPA, the
Kabbage online application for PPP has a HUGE mistake in how it figures
the loan amount that is gonna get you guys in trouble. Call me at 678-
362-6547 ASAP
Instant Message : Native Messages
From 10:25:37
+17732949576
We've heard it all before...fine to listen to him but we've gone through this
with council
Instant Message : Native Messages
From 10:25:41
Kate Prince <+14049876386>
Laura I sent you email and text
Instant Message : Native Messages
From 10:25:55
Nipun Goel <+16784804635>
Yeah Laura if you can have someone reach out - def need to understand
what is. We've had a lot of commentary re: what's right/ what's wrong.
But we've walked thru all of this with outside counsel.
Instant Message : Native Messages
From 10:26:03
+17732949576
What we were tasked to do by SBA is not possible and our calc gets as
close as possible
Instant Message : Native Messages
From 10:26:06
Nipun Goel <+16784804635>
Spenny beat me to the punch.
A00216
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 14 of 125
Instant Message : Native Messages
From 10:26:22
Laura Goldberg <+ 19174880142>
If he is not a customer/CS isn't right
Instant Message : Native Messages
From 10:26:24
+ 17732949576
It's not perfect but it's what we can do at a semblance of scale
Instant Message : Native Messages
From 10:26:42
Laura Goldberg <+ 19174880142>
I can't answer those questions - but will find someone who can
Instant Message : Native Messages
From 10:26:54
+ 17732949576
It's also what pretty much everyone else is doing
Instant Message : Native Messages
From 10:26:59
Kathryn Petralia <+ 16785966422>
Loved an image
Instant Message : Native Messages
From 10:27:00
+ 17732949576
Emphasized an image
A00217
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 15 of 125
Instant Message : Native Messages
From 10:27:10
Kate Prince <+14049876386>
Emphasized an image
Instant Message : Native Messages
From 10:27:48
Nipun Goel <+16784804635>
If we're going to stick to principles of automation, this is how we
accomplish it.
Instant Message : Native Messages
From 11:02:49
Kristel Adler <+16094250252>
Customers Bank is signed (in case you didn't catch it on the call)
Instant Message : Native Messages
From 11:18:21
+17068880969
Liked "Customers Bank is signed (in case you didn't catch it on the call)"
Instant Message : Native Messages
From 12:32:46
Sam Taussig <+ 13014129193>
Bill signed
Instant Message : Native Messages
From 12:38:00
Rob Frohwein <+14042906116>
I just broke up with CRB as a referring partner but the bank partnership
might also be over potentially.
Instant Message : Native Messages
From 12:38:08
Rob Frohwein <+14042906116>
They're complete assholes.
Instant Message : Native Messages
From 12:38:59
+17732949576
No pressure Clint @
A00218
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 16 of 125
Instant Message : Native Messages
From 12:39:02
Kathryn Petralia <+16785966422>
Holy Moses
Instant Message : Native Messages
From 12:39:23
clint@flintriverhills.com
Instant Message : Native Messages
From 12:41:52
Rob Frohwein <+14042906116>
We can also re-engage with Celtic if we want, but would want to know that
asap.
Instant Message : Native Messages
From 12:42:08
Rob Frohwein <+14042906116>
However, CRB is nothing but a bunch of goons.
Instant Message : Native Messages
From 12:42:22
Deepesh Jain <+12028213408>
What happened with CRB?
Instant Message : Native Messages
From 12:42:23
Kathryn Petralia <+16785966422>
We have to use Celtic's etran thing
Instant Message : Native Messages
From 12:43: 11
Rob Frohwein <+14042906116>
We have had two relationships with CRB - referral and banking. I just
broke off the referral relationship because they're acting like assholes
Instant Message : Native Messages
From 12:43:29
Rob Frohwein <+14042906116>
I've also offered to cut off the banking relationship
A00219
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 17 of 125
Instant Message : Native Messages
From 12:43:58
Rob Frohwein <+14042906116>
I think they'll want to continue that but I can't be sure
Instant Message : Native Messages
From 12:44:03
Rob Frohwein <+14042906116>
So we need plan F
Instant Message : Native Messages
From 12:45:14
Deepesh Jain <+12028213408>
I have an idea...
Instant Message : Native Messages
From 12:47:15
Deepesh Jain <+12028213408>
Quontic Bank is a CDFI and is apparently a SBA approved lender...
There is a strong push to get CDFis a seat at the table (Rob, I believe you
got a letter on that front?).
It's also expected that CDFis can access the PPPLF this weekend.
SR approached me to sell loans directly
To them as they have a relationship with them.
I told him that we won't unless we get better economics
Instant Message : Native Messages
From 12:47:29
Rob Frohwein <+14042906116>
Hey all, given the acrimonious relationship with CRB, I think it's best if we
move entirely off of them.
Instant Message : Native Messages
From 12:47:43
Deepesh Jain <+12028213408>
So we can work with them to use their etran - originate loans through
them and get better economics
Instant Message : Native Messages
From 12:47:47
Rob Frohwein <+14042906116>
I'm afraid they'll sabotage us on Monday.
A00220
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 18 of 125
Instant Message : Native Messages
From 12:47:53
Sam Taussig <+ 13014129193>
Why would we do that? We know CRB works and they fit into the small
bucket.... Can we talk about this?
Instant Message : Native Messages
From 12:48:04
Deepesh Jain <+12028213408>
I meant better economics than current SR economics
Instant Message : Native Messages
From 12:48:07
Kristel Adler <+16094250252>
Do they really have another partner who can process?
Instant Message : Native Messages
From 12:48:18
Rob Frohwein <+14042906116>
It doesn't make a diff Kristel
Instant Message : Native Messages
From 12:48:19
Kathryn Petralia <+16785966422>
We need to get on a call
Instant Message : Native Messages
From 12:48:21
Rob Frohwein <+14042906116>
I won't work with them any longer
Instant Message : Native Messages
From 12:48:24
Kristel Adler <+16094250252>
Maybe bluevine?
Instant Message : Native Messages
From 12:48:27
Rob Frohwein <+14042906116>
I'm through with them
A00221
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 19 of 125
Instant Message : Native Messages
From 12:48:32
Rob Frohwein <+14042906116>
entirely
Instant Message : Native Messages
From 12:50:38
Sam Taussig <+13014129193>
Talk at 1?
Instant Message : Native Messages
From 12:50:53
Sam Taussig <+13014129193>
Some of us are on calls. Kate - can we talk at 1?
Instant Message : Native Messages
From 12:53:22
Sam Taussig <+13014129193>
Kate is busy. Just sent invite
Instant Message : Native Messages
From 12:59:46
Kate Prince < + 14049876386>
Sorry guys Reid fell and busted his lip right as Sam sent that. Thanks Sam!
Instant Message : Native Messages
From 13:00:14
Rob Frohwein <+14042906116>
Not my room
Instant Message : Native Messages
From 13:00:19
Rob Frohwein <+14042906116>
I'm driving
Instant Message : Native Messages
From 13:00:36
Rob Frohwein <+14042906116>
And can't get that to work. Send a diff link
A00222
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 20 of 125
Instant Message : Native Messages
From 13:00:57
Sam Taussig <+ 13014129193>
Ok. KP will join late. Use my number 202.850.9008
Instant Message : Native Messages
From 13:02:34
Laura Goldberg <+ 19174880142>
What room?
Instant Message : Native Messages
From 13:02:43
Laura Goldberg <+ 19174880142>
I am confused
Instant Message : Native Messages
From 13:02:44
Sam Taussig <+ 13014129193>
202.850. 9008
Instant Message : Native Messages
From 13:02:46
Kate Prince < + 14049876386>
Use sam's number above!
Instant Message : Native Messages
From 13:04:41
davidkmcgowan@yahoo.com
I got invalid number or meeting not started
Instant Message : Native Messages
From 13:05:08
davidkmcgowan@yahoo.com
Nervermind, call it
Instant Message : Native Messages
From 13:30:05
Laura Goldberg <+ 19174880142>
FYI - we have already surpassed 330k calls. No one is getting through.
Happened when trump signed
A00223
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 21 of 125
Instant Message : Native Messages
From 13:30:26
davidkmcgowan@yahoo.com
So it was already on?
Instant Message : Native Messages
From 13:30:30
davidkmcgowan@yahoo.com
What happened to Monday?
Instant Message : Native Messages
From 13:30:52
Rob Frohwein <+14042906116>
She's just talking about CS
Instant Message : Native Messages
From 13:30:53
Laura Goldberg <+19174880142>
No, when trump signed the bill, the calls spiked
Instant Message : Native Messages
From 13:30:56
Rob Frohwein <+14042906116>
Etran isn't on
Instant Message : Native Messages
From 13:30:56
Deepesh Jain <+12028213408>
I think these are customers calling us - etran is not on
Instant Message : Native Messages
From 13:30:59
davidkmcgowan@yahoo.com
Jesus, that was scary
Instant Message : Native Messages
From 13:31:17
davidkmcgowan@yahoo.com
Sorry about your calls, but I feel better for a second
A00224
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 22 of 125
Instant Message : Native Messages
From 13:31:56
Deepesh Jain <+12028213408>
Rob - you broke up over text ....
something for the book/film that you were referring to earlier :-)
Instant Message : Native Messages
From 13:51:50
Rob Frohwein <+14042906116>
So, the ready for etran number isn't moving up anymore. Was that
expected?
Instant Message : Native Messages
From 13:52:51
davidkmcgowan@yahoo.com
The manual ones should trickle in if they get a success, don't think we
have another chunk from AWS OCR yet, which would make a change,
and then strategy changes planned this weekend should make a change
Instant Message : Native Messages
From 13:56:29
davidkmcgowan@yahoo.com
we also reset the consents we got for the more than 20% difference
because we plan to run a new strategy, and their amount will change, so
we need them to sign it again, so that is up to 154mm now
Instant Message : Native Messages
From 13:56:43
davidkmcgowan@yahoo.com
Once we get a final strategy we can email them and get back probably by
that time what will be 200mm
Instant Message : Native Messages
From 15:00:04
Sam Taussig <+ 13014129193>
SBA is considering a staged approach for e-tran. They are considering, and
seeking TRSY's consent, to turn on access to some smaller lenders this
weekend. NOTHING FINAL. But they are conducting a survey this
afternoon to understand how much volume lenders have lined up to
submit. AKA: They are totally dazed and confused
Instant Message : Native Messages
From 15:32:38
davidkmcgowan@yahoo.com
Still Rob's room?
A00225
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 23 of 125
Instant Message : Native Messages
From 15:33:06
Kate Prince <+ 14049876386>
I am in - unless y'all have started a new thread without me again.
Instant Message : Native Messages
From 15:33:15
davidkmcgowan@yahoo.com
lol
Instant Message : Native Messages
From 15:33:19
davidkmcgowan@yahoo.com
I'm waiting for host to join
Instant Message : Native Messages
From 15:33:29
+ 17732949576
Ditto
Instant Message : Native Messages
From 15:33:55
+17068880969
On phone w customers bank Be right there.
Instant Message : Native Messages
From 15:35:26
Deepesh Jain <+ 12028213408>
I can't join
Have a conflict... on a call with Wells Fargo
Another fire to fight
Instant Message : Native Messages
From 16:32:42
Sam Taussig <+ 13014129193>
We have lender to lender guidance
A00226
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 24 of 125
Instant Message : Native Messages
From 16:32:44
Sam Taussig <+ 13014129193>
Lenders participating in the Paycheck Protection Program ("PPP") may sell
participating
interests in PPP loans to other participating Lenders in accordance with 13
CFR § 120.432(b).
For purposes of PPP loans only, SBA's prior written consent is not required
and Lenders may
sell participations of up to 100 percent of the principal balance of PPP
loans. All participating
interests in PPP loans must be sold to Lenders that have a signed SBA
Form 750, SBA Form
3506, or SBA Form 3507. The originating Lender must continue to hold
the note, the loan
documents and retain all servicing rights. The originating 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.
The originating Lender must also provide SBA's Office of Credit Risk
Management (OCRM)
with prior written notice of any such participating interest sale at the
following email address:
PPPLoanParticipation@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.
Instant Message : Native Messages
From 16:32:48
Sam Taussig <+ 13014129193>
Will email too
Instant Message : Native Messages
From 16:40:19
Sam Taussig <+ 13014129193>
Also SBA just killed e-tran test because too many people are capacity
testing. Engines are rewing!
Instant Message : Native Messages
From 16:43:03
Kristel Adler <+16094250252>
A+ for Clint for getting ours done early!
A00227
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 25 of 125
Instant Message : Native Messages
From 16:43:35
+17068880969
Loved "A+ for Clint for getting ours done early!"
Instant Message : Native Messages
From 16:50:13
Sam Taussig <+ 13014129193>
Loved "A+ for Clint for getting ours done early!"
Instant Message : Native Messages
From 16:50:52
+17732949576
Who's going to play Clint in the movie?
Instant Message : Native Messages
From 16:51:39
Kristel Adler <+16094250252>
Thor!
Instant Message : Native Messages
From 16:51:55
Sam Taussig <+13014129193>
Chuck Norris
Instant Message : Native Messages
From 16:52:13
+17068880969
Chuck too old. Thor for sho
Instant Message : Native Messages
From 16:53:07
+17732949576
Laughed at "Chuck too old. Thor for sho"
Instant Message : Native Messages
From 16:57:46
Kathryn Petralia <+16785966422>
Out of curiosity who is going to watch a movie about PPP loans?
A00228
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 26 of 125
Instant Message : Native Messages
From 16:58:24
+17732949576
The same people who watched he big short
Instant Message : Native Messages
From 17:03:26
Kathryn Petralia <+16785966422>
I'll call Michael Lewis
Instant Message : Native Messages
From 17:03:38
Kristel Adler <+16094250252>
I have his snail mail address
Instant Message : Native Messages
From 17:04:27
Kristel Adler <+16094250252>
I already found it. 100% sending this to him as a bundle. Kabbage plays
the role of little known story amidst ba ckdrop of pandemic and
government bungling. If he doesn't write it I will.
Instant Message : Native Messages
From 17:08:21
Kathryn Petralia <+16785966422>
I think it could be a good story. My sister has some good CDC
government bullshit stories too, including one about Arkansas prisons. He
likes to use random stories
Instant Message : Native Messages
From 17:09:35
Rob Frohwein <+14042906116>
I'll find out if Jon Hamm is available to play me in the movie.
Instant Message : Native Messages
From 17:09:50
Kristel Adler <+16094250252>
Alec Baldwin.
Instant Message : Native Messages
From 17:27:23
davidkmcgowan@yahoo.com
Bradley Cooper is up for playing me, but if he isn't available Chris
Hemsworth is in
A00229
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 27 of 125
Instant Message : Native Messages
From 17:34:30
Rob Frohwein <+14042906116>
We are still $23m short of delivery on the first tranche and it's been about
9 days or so. What's the plan here?
Instant Message : Native Messages
From 17:36:38
davidkmcgowan@yahoo.com
KP is chatting with Laura now, we emailed them today again, they were
going to talk on options on was to push them to come
Instant Message : Native Messages
From 17:39:17
Laura Goldberg <+19174880142>
Customer has the list has been calling today and will resume tomorrow
Instant Message : Native Messages
From 17:39:23
Laura Goldberg <+19174880142>
Customer service
Instant Message : Native Messages
From 18:37:13
Rob Frohwein <+14042906116>
May have a call tonight with SVB about a correspondent relationship. Keep
an eye out
Instant Message : Native Messages
From 18:37:28
Sam Taussig <+ 13014129193>
Instant Message : Native Messages
From 18:37:48
Deepesh Jain <+12028213408>
I have reached out to BMO also
They are checking internally
A00230
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 28 of 125
Instant Message : Native Messages
From 19:47:48
Rob Frohwein <+14042906116>
PPPLF apparently has CEO attestation that the borrower has access to no
other capital
Instant Message : Native Messages
From 19:48:13
Sam Taussig <+ 13014129193>
Borrower being us.
Instant Message : Native Messages
From 19:48:21
Deepesh Jain <+12028213408>
Yep
Instant Message : Native Messages
From 19:52:29
Deepesh Jain <+12028213408>
I don't know how any bank can certify that... if they can, why can't we? :-
Instant Message : Native Messages
From 19:53:12
Kathryn Petralia <+16785966422>
That's insane
Instant Message : Native Messages
From 19:53:28
Kathryn Petralia <+16785966422>
And plain stupid
Instant Message : Native Messages
From 19:53:30
Sam Taussig <+ 13014129193>
I am not worried
Instant Message : Native Messages
From 19:54:18
Deepesh Jain <+12028213408>
Let's just hope that SR doesn't go to the fed showing our agreement with
them and saying that we had access to capital!
A00231
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 29 of 125
Instant Message : Native Messages
From 20:01:47
Rob Frohwein <+14042906116>
Glad you're not worried Sam. Deputizing you as ceo.
Instant Message : Native Messages
From 20:02:01
Deepesh Jain <+12028213408>
Laughed at "Glad you're not worried Sam. Deputizing you as ceo. "
Instant Message : Native Messages
From 20:25:28
Deepesh Jain <+12028213408>
Is anyone an expert on correspondent bank requirements? I don't have
much idea except for some google education. This if for the 9pm call.
Instant Message : Native Messages
From 20:56:05
Kristel Adler <+16094250252>
Nope but my main takeaway from googling is that it should be a flat fee
per txn not volume based
Instant Message : Native Messages
From 21:48:51
Sam Taussig <+13014129193>
I think everyone is only partially aware that the "lender to lender"
guidance spooked SR today. Allow me to clarify all this. SR believes SBA's
guidance supersedes the previous secondary market guidance from TRSY
from a few days ago. I, Azba, and our outside legal eagles see those as two
very distinct issues because they live under two distinct statutes, but SR
doesn't. I was able to connect briefly with the SBA's Chief of Staff, but his
reaction was not helpful. It was more like a Homer Simpson "DOH!" than
anything else. I need to talk with SBA legal tomorrow now to unfuck this. If
it doesn't get clarified, then we're prepared to balance sheet at CRB and
Customers if need be (with the new lender to lender guidance) AND are
exploring rapid paths to PPLF. We'll likely need a correspondent banking
relationship with a main street bank for PPLF, so if you have high-level
contacts, now would be the time to call them. I think the SBA just needs
to clarify their guidance, but we'll figure this out one way or the other.
Instant Message : Native Messages
From 21:49:06
Sam Taussig <+13014129193>
Also, just to sum up, on the SBA doc thread, we have 1) new FAQs, 2)
new eligibility requirements, and 3) new calc rules all from this afternoon.
Docs are now up here:
A00232
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 30 of 125
Instant Message : Native Messages
From 21:49:06
Sam Taussig <+ 13014129193>
https:/ /home.treasury .gov/policy-issues/cares/assistance-for-small
businesses
51CA6235-B4DD-47FF-9566-5ED08FCC0788.pluginPayloadAttachment
Instant Message : Native Messages
From 21:49:52
Deepesh Jain <+ 12028213408>
To be fair, unless you spoke with SR, they were not spooked. They are
wondering and questioning what this new guidance means
Instant Message : Native Messages
From 21:50:32
Deepesh Jain <+ 12028213408>
So let's not jump the gun here
End Thread
Thread Statistics
Instant Message Count
182
A00233
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 31 of 125
EXHIBIT 22
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 32 of 125
Congressional Research Service
https://crsreports.congress.gov
R46325
A00234
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 33 of 125
R46325
Fourth COVID-19 Relief Package (P.L. 116-139):
April 24, 2020
In Brief William L. Painter,
On April 23, 2020, Congress passed its fourth measure including supplemental appropriations to Coordinator
respond to the COVID-19 pandemic. The Paycheck Protection Program and Health Care Specialist in Homeland
Enhancement Act (the act; P.L. 116-139) includes enhancements for the Small Business Security and
Appropriations
and Emergency EIDL grants, and emergency supplemental appropriations for the Department of
Health and Human Services (HHS) and Small Business Administration (SBA). The President Robert Jay Dilger
signed the bill into law on April 24, 2020. Senior Specialist in
American National
The Congressional Budget Office estimates that the act will result in $321.3 billion in additional Government
direct spending for the PPP, and $162.1 billion in additional discretionary spending, including
$50 billion for EIDL and $10 billion for Emergency EIDL grants.
Bruce R. Lindsay
Analyst in American
This report provides a brief overview of that measure.
National Government
Sarah A. Lister
Specialist in Public Health
and Epidemiology
Congressional Research Service
A00235
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 34 of 125
Fourth COVID-19 Relief Package (P.L. 116-139): In Brief
.....................................................................................................................................
....................................................................................................................
.....................
.....................................................................................
......................
..........................................................
..........................................................................................
...............................................
..........................................................................................................................
Congressional Research Service
A00236
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 35 of 125
Fourth COVID-19 Relief Package (P.L. 116-139): In Brief
1
2
3
4
1
2020, at https://www.cbo.gov/publication/56338.
2
Roll call vote 104, available at http://clerk.house.gov/evs/2020/roll104.xml.
3
In addition to the $349 billion for the Paycheck Protection Program (PPP), the CARES Act also included $675 million
million for entrepreneurial development programs, $17 billion for subsidies for certain loan payments, and $10 billion
for Emergency Economic Injury Disaster Loan (EIDL) grants, for a total of almost $377 billion in total appropriations
to the SBA.
4
For more details on the Paycheck Protection Program, see CRS Report R46284, COVID-19 Stimulus Assistance to
Congressional Research Service 1
A00237
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 36 of 125
Fourth COVID-19 Relief Package (P.L. 116-139): In Brief
5
6
7
8
Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.
5
Statement from Secretary Steven T. Mnuchin and Administrator Jovita
Carranza on the Success of the Paycheck Protection Program ril 17, 2020, at https://www.sba.gov/about-sba/sba-
newsroom/press-releases-media-advisories/statement-secretary-steven-t-mnuchin-and-administrator-jovita-carranza-
success-paycheck-protection.
6
For more details on the EIDL program, see CRS Insight IN11232, SBA Economic Injury Disaster Loans for COVID-
19, by Bruce R. Lindsay.
7
tatement by Secretary Mnuchin and Administrator Carranza on the Paycheck Protection Program and
Economic Injury Disaster Loan Program https://www.sba.gov/about-sba/sba-newsroom/press-
releases-media-advisories/statement-secretary-mnuchin-and-administrator-carranza-paycheck-protection-program-and-
economic (hereinafter
Program and Economi
8
-19 EIDL L https://www.sba.gov/document/report covid-19-eidl-
loans-report - https://www.sba.gov/document/
report covid-19-eidl-advance-report.
Congressional Research Service 2
A00238
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 37 of 125
Fourth COVID-19 Relief Package (P.L. 116-139): In Brief
9
9
Under the Small Business Act (P.L. 85-536, as amended), agricultural enterprises, other than small agricultural
cooperatives, small aquaculture enterprises, and eligible small nurseries, are not eligible for EIDL.
Congressional Research Service 3
A00239
Table 1. Supplemental Appropriations in P.L. 116-139, Division B
Thousands of dollars of discretionary budget authority
SUBCOMMITTEE Appropriation Amount
Agency Subappropriation / Transfer [non-add]
Labor, HHS, and Education and Related Agencies
Department of Health and Office of the Public Health and Social Services Emergency Fund TOTAL 100,000,000
Human Services (HHS) Secretary
Public Health and Social Services Emergency Fund Provider Relief Fund 75,000,000
Public Health and Social Services Emergency Fund Testing and contact tracing 25,000,000
Testing funding for states, localities, territories, and tribes [not less than 11,000,000]
Transfer to CDC-Wide Activities and Program Support [not less than 1,000,000]
Case 25-52372-CTG
Transfer to National Institutes of Health (NIH) National Cancer Institute [not less than 306,000]
Transfer to NIH National Institute of Biomedical Imaging and Bioengineering [not less than 500,000]
Transfer to NIH Office of the Director [not less than 1,000,000]
Biomedical Advanced Research and Development Authority [not less than 1,000,000] Doc 97-3
Transfer to the Food and Drug Administration, Salaries and Expenses [22,000]
Transfer to HRSA Primary Health Care for Health Centers Grants [600,000]
Testing resources for rural health clinics [225,000]
Testing resources for the uninsured [not more than 1,000,000]
Transfer to the HHS Office of Inspector General (General Provision) [not more than 6,000] Filed 04/09/26
Financial Services and General Provisions Government-Wide
Small Business Administration Salaries and Expenses 2,100,000
Disaster Loan Program Account 50,000,000
Emergency Economic Injury Disaster Loan (EIDL) Grants 10,000,000
Source: CRS analysis of P.L. 116-139, Division B.
Notes: CDC = Centers for Disease Control and Prevention; HRSA = Health Resources and Services Administration; NIH = National Institutes of Health.
Page 38 of 125
A00240
CRS-4
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 39 of 125
Fourth COVID-19 Relief Package (P.L. 116-139): In Brief
10
11
o
12
o
10
Provider Relief Fund (a name given to this fund by HHS), April 22, 2020, at https://www.hhs.gov/provider-relief/
index.html.
11
HHS Announces Additional Allocations of CARES Act Provider Relief Fund 20,
at https://www.hhs.gov/about/news/index.html.
12
The allocation formula for this grant provides a base amount and an additional amount according to population to all
50 states, the territories, and Washington DC, New York City, Los Angeles County, and Chicago. FY2019 allocations
are at Centers for Disease Control and Prevention, Public Health Emergency Preparedness (PHEP) Cooperative
Agreement, FY2019 funding table, https://www.cdc.gov/cpr/readiness/00_docs/
PHEP_Budget_Period_1_FY_2019_Funding_Table_August_2_2019.pdf.
Congressional Research Service 5
A00241
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 40 of 125
Fourth COVID-19 Relief Package (P.L. 116-139): In Brief
o
o
o
13
14
15
13
These funds may also be awarded to entities that are eligible for, but not currently receiving such funds (i.e.,
-
enter Program Look-
https://bphc.hrsa.gov/programopportunities/lookalike/index.html.
14
For more information on the new fund, see U.S. Department of Health and Hum
Provider Relief Fund (a name given to this fund by HHS), April 22, 2020, at https://www.hhs.gov/provider-relief/
index.html.
15
Title V. Department of Health and Human Services, Public Health and Social Services
Emergency Fund CRS Report R46316, Health Care Provisions in the Families First Coronavirus Response Act,
P.L. 116-127, coordinated by Sarah A. Lister and Paulette C. Morgan.
Congressional Research Service 6
A00242
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 41 of 125
Fourth COVID-19 Relief Package (P.L. 116-139): In Brief
William L. Painter, Coordinator Bruce R. Lindsay
Specialist in Homeland Security and Appropriations Analyst in American National Government
Robert Jay Dilger Sarah A. Lister
Senior Specialist in American National Government Specialist in Public Health and Epidemiology
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.
Congressional Research Service R46325 · VERSION 2 · NEW 7
A00243
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 42 of 125
EXHIBIT 23
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 43 of 125
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?PJXJbP?ÿbN>>NW?>Aÿ@GKÿKJAbB>A?ÿOBGKAÿ?mY?KJEJNBAPC;ÿÿLPPÿ?PJXJbP?ÿbN>>NW?>AÿWINÿG??KÿEI?A?
OBGKAÿAINBPKÿWN>^ÿWJEIÿ@Gÿ@YY>NF?KÿP?GK?>ÿENÿ@YYPC;ÿÿQN>>NW?>AÿAINBPKÿD@>?OBPPCÿ>?FJ?WÿZZZ
>?XBP@EJNGAÿ@GKÿXBJK@GD?ÿ@GKÿEI?ÿD?>EJOJD@EJNGAÿ>?nBJ>?KÿENÿNbE@JGÿ@ÿPN@G;
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A00244
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 44 of 125
!"ÿ$%&ÿ'( )*+,-ÿ.-/-010,-ÿ23ÿ450/6753ÿ.0850-/53ÿ.-090,ÿ4:ÿ(,78;+,ÿ/,<ÿ.=>ÿ><1+,+6-5/-*5ÿ)*9+-/ÿ?/55/,@/ÿ*,ÿ-;0ÿA0671B-+*,ÿ*Cÿ-;0ÿ'/38;0D
0123ÿ15678ÿ9 7 5 ÿÿ6ÿ77 3ÿÿ3 65 ÿ2ÿ9735ÿ535ÿ ÿ7
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A00245
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 45 of 125
EXHIBIT 24
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 46 of 125
From: Nipun Goel[ngoel@kabbage.com]
Sent: Tue 4/28/2020 1:09:03 AM (UTC)
Subject: Re: Kabbage PPP Loan Return
Because there are two areas where we knew self-reported calculation inside the front-end
application was being done incorrectly, so we had removed the SR cap there: 1) businesses
started in 2019 that weren't getting annualized appropriately, and 2) sole props / single LLCs
with employees that weren't being capped at $21K.
The cap is back in now - getting a full list of impacted accounts.this w
On Mon, Apr 27, 2020 at 7:48 PM Spencer Robinson <srobinson@kabbage.com> wrote:
How is it possible? We take lesser of the calcs then apply the 80/20 rule when using our
lower calc
On Apr 27, 2020, at 7:44 PM, Nipun Goel <ngoel@kabbage.com> wrote:
No, this is what’s gone out now.
On Mon, Apr 27, 2020 at 7:42 PM Spencer Robinson
<srobinson@kabbage.com> wrote:
I don’t understand how this happened are these all from the original 275?
On Apr 27, 2020, at 7:18 PM, Nipun Goel <ngoel@kabbage.com>
wrote:
We have a good amount of cases like this - pulling together a full
list of ones that need to be flagged prior to disbursement. A few
reasons it was happening:
1) not capping sole props / single LLCs to the appropriate $100K,
2) businesses putting start dates that are clearly incorrect, and
3) human / OCR field input errors.
According to E-Tran FAQs, we are able to go in and decrease (not
increase) undisbursed loan amounts. We're going to need to figure
this piece out, in all three flows?
A00246
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 47 of 125
On Mon, Apr 27, 2020 at 2:05 PM Kristel Adler
<kadler@kabbage.com> wrote:
There is no clear guidance, but I think about it this way:
• There is no penalty for prepayment
• Take the $$; prepay a portion immediately
• when you get forgiveness, it will be <100%
• but you will have paid back a % already anyway,
• Example:
○ You take $100 and immediately prepay $25
○ Your forgiveness calc is 75%
○ You get $75 forgiven, so net you owe $0
○ Obvi net you could still owe something if your
prepayment estimation is off, but you get the point
Anyone think it could work any other way?
____________________
Kristel Adler
Kabbage
M: +1-609-425-0252
kadler@kabbage.com
On Mon, Apr 27, 2020 at 2:01 PM Laura Goldberg
<lgoldberg@kabbage.com> wrote:
New issue on this.
We approved someone for more than they calculated and they are
concerned they won't be eligible for forgiveness. Can they give
back a portion of the loan early - ie draw the full amount, but give
some back right away as repayment.
Thanks
On Mon, Apr 27, 2020 at 7:44 AM Kristel Adler
<kadler@kabbage.com> wrote:
My link broke. Here are the FAQs for reference:
https://home.treasury.gov/system/files/136/Paycheck-Protection-
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Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 48 of 125
Program-Frequently-Asked-Questions.pdf
____________________
Kristel Adler
Kabbage
M: +1-609-425-0252
kadler@kabbage.com
On Mon, Apr 27, 2020 at 10:42 AM Kristel Adler
<kadler@kabbage.com> wrote:
I think he should prepay it if he no longer thinks he meets
the needs test. This isn't a perfectly relevant FAQ (from here),
but the last paragraph seems applicable:
31. Question: Do businesses owned by large companies with
adequate sources of liquidity to support the business’s ongoing
operations qualify for a PPP loan?
Answer: In addition to reviewing applicable affiliation rules to
determine eligibility, all borrowers must assess their economic
need for a PPP loan under the standard established by the
CARES Act and the PPP regulations at the time of the loan
application. Although the CARES Act suspends the ordinary
requirement that borrowers must be unable to obtain credit
elsewhere (as defined in section 3(h) of the Small Business
Act), borrowers still must certify in good faith that their PPP
loan request is necessary. Specifically, before submitting a PPP
application, all borrowers should review carefully the required
certification that “[c]urrent economic uncertainty makes this
loan request necessary to support the ongoing operations of the
Applicant.” Borrowers must make this certification in good
faith, taking into account their current business activity and
their ability to access other sources of liquidity sufficient to
support their ongoing operations in a manner that is not
significantly detrimental to the business. For example, it is
unlikely that a public company with substantial market value
and access to capital markets will be able to make the required
certification in good faith, and such a company should be
prepared to demonstrate to SBA, upon request, the basis for its
certification.
Lenders may rely on a borrower’s certification regarding the
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Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 49 of 125
necessity of the loan request. Any borrower that applied for a
PPP loan prior to the issuance of this guidance and repays the
loan in full by May 7, 2020 will be deemed by SBA to have
made the required certification in good faith.
____________________
Kristel Adler
Kabbage
M: +1-609-425-0252
kadler@kabbage.com
On Mon, Apr 27, 2020 at 10:35 AM Laura Goldberg
<lgoldberg@kabbage.com> wrote:
Hey Spencer/Kristel/Sam
Can we take a loan back? Is this even possible?
On Mon, Apr 27, 2020 at 7:34 AM Jon Hoffmann
<jhoffmann@kabbage.com> wrote:
I'll have somebody call him, but I don't have a clue how
to give the money back to the SBA. I'll have to dig
around on that one.
JHH
On Mon, Apr 27, 2020 at 10:31 AM Robert Frohwein
<rfrohwein@kabbage.com> wrote:
Begin forwarded message:
From: Tim McKeon <tmckeon@gmail.com>
Subject: Kabbage PPP Loan Return
Date: April 27, 2020 at 10:30:22 AM EDT
To: rfrohwein@kabbage.com,
rob.frohwien@kabbage.com
Reply-To: tmck@pobox.com
Hello Rob,
I was very impressed how quickly Kabbage was
able to get their PPP website working to
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Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 50 of 125
accept applications and required documents.
I was able obtain a PPP Loan for
approximately $15,000 on April 17.
Since I got my loan my circumstances
have changed and the SBA issued new guidance
on the loan. I feel I not longer qualify and want
to return my loan.
I have been calling the Kabbage help line and
sent numerous email to PPP@Kabbage.com but
have not heard back.
Is there anyway you can have someone contact
me to get this resolved and get the money to a
small business that needs it to survive.
My phone number is 720 771 6584 and my
Kabbage account email is tmck@pobox.com.
Thanks in advance.
Tim
A00250
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 51 of 125
EXHIBIT 25
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 52 of 125
Azba Habib <ahabib@kabbage.com> on behalf of
From:
Azba Habib <ahabib@kabbage.com>
Sent: Tuesday, April 28, 2020 6:14 PM
To: Amit Kesarwani <akesarwani@kabbage.com>; Bethany Gripp <bgripp@kabbage.com>;
Syed Ashekeen <sashekeen@kabbage.com>; Pujish Amin <pamin@kabbage.com>;
Nipun Goel <ngoel@kabbage.com>; Charlie Brooks <cbrooks@kabbage.com>; Kristina
Nelson <knelson@kabbage.com>
Cc: Sam Taussig <staussig@kabbage.com>; Spencer Robinson <srobinson@kabbage.com>;
Elizabeth Maiellaro <emaiellaro@kabbage.com>; Scott Askins
<saskins@kabbage.com>; Kristel Adler <kadler@kabbage.com>
Subject: PPP BSA/AML Program - Suspicious Activity Monitoring & Quality Control &Testing
Hey Guys,
I've put together some documentation outlining our internal controls and procedures for ensuring PPP customers
are subject to the Bank Secrecy Act requirements. We are required to ensure compliance with BSA per statute
(as a non-bank PPP lender) and per contract (as a service provider to Cross River Bank and Customers Bank for
PPP loans). We will get audited on this by both our bank partners as well as our own independent auditors
(since BSA/AML Programs require annual independent testing). It's important for us to be in reasonably good
shape for both. With your help, I've been able to largely capture our process for KYC/KYB (which is the bulk
of our customer identification program). However, there are two areas relevant for BSA compliance where I
help from our collective brain trust:
(1) We need to identify what types of characteristics at onboarding and thereafter we should flag for suspicious
activity referrals and reports. Lexis already provides helpful risk indicators (e.g., EIN is issued w/ different
business name/address; multiple identities associated with SSN) and red flags (e.g., identity theft alert, name
and SSN are verified but not with input address and phone) that we leverage for automated logic. If we
supplement that with some guidance on what to look for in manual review (e.g., fake documents), we should
have a good framework. I'll need help identifying the exact triggers and then operationalizing them.
(2) We need a process to complete some internal quality control and testing to ensure that our automated
process is working as it should and KYB, KYC, Fraud, and KBA ticket reviews are being conducted in
compliance with our desktop procedures. I suspect these will just be spot checks but we'll need resources to
complete and document the process of completion.
I'd appreciate your preliminary feedback on approach and ideas/suggestions for both (1) and (2) above in this
google doc by EOD Thursday (4/28). Brain dump is fine and shouldn't take longer than 15-20 mins. I'll then
follow/up to finalize. For now, I just want to get our thoughts on paper so whenever you have a moment, please
share your ideas! Thank you.
Kabbage, Inc.
[]
Azba Habib
730 Peachtree St NE #1100
Assistant General Counsel
Atlanta, GA 30308
www.kabbage.com
678-805-7765
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EXHIBIT 26
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 54 of 125
As of April 29, 2020
PAYCHECK PROTECTION PROGRAM LOANS
Frequently Asked Questions (FAQs)
The Small Business Administration (SBA), in consultation with the Department of the Treasury,
intends to provide timely additional guidance to address borrower and lender questions
concerning the implementation of the Paycheck Protection Program (PPP), established by section
1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). This
document will be updated on a regular basis.
Borrowers and lenders may rely on the guidance provided in this document as SBA’s
interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rules
(“PPP Interim Final Rules”) (link). The U.S. government will not challenge lender PPP actions
that conform to this guidance, 1 and to the PPP Interim Final Rules and any subsequent
rulemaking in effect at the time.
1. Question: Paragraph 3.b.iii of the PPP Interim Final Rule states that lenders must
“[c]onfirm the dollar amount of average monthly payroll costs for the preceding calendar
year by reviewing the payroll documentation submitted with the borrower’s application.”
Does that require the lender to replicate every borrower’s calculations?
Answer: No. Providing an accurate calculation of payroll costs is the responsibility of
the borrower, and the borrower attests to the accuracy of those calculations on the
Borrower Application Form. Lenders are expected to perform a good faith review, in a
reasonable time, of the borrower’s calculations and supporting documents concerning
average monthly payroll cost. For example, minimal review of calculations based on a
payroll report by a recognized third-party payroll processor would be reasonable. In
addition, as the PPP Interim Final Rule indicates, lenders may rely on borrower
representations, including with respect to amounts required to be excluded from payroll
costs.
If the lender identifies errors in the borrower’s calculation or material lack of
substantiation in the borrower’s supporting documents, the lender should work with the
borrower to remedy the issue. 2
2. Question: Are small business concerns (as defined in section 3 of the Small Business
Act, 15 U.S.C. 632) required to have 500 or fewer employees to be eligible borrowers in
the PPP?
Answer: No. Small business concerns can be eligible borrowers even if they have more
than 500 employees, as long as they satisfy the existing statutory and regulatory
definition of a “small business concern” under section 3 of the Small Business Act, 15
U.S.C. 632. A business can qualify if it meets the SBA employee-based or revenue-
1
This document does not carry the force and effect of law independent of the statute and regulations on which it is
based.
2
Question 1 published April 3, 2020.
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based size standard corresponding to its primary industry. Go to www.sba.gov/size for
the industry size standards.
Additionally, a business can qualify for the Paycheck Protection Program as a small
business concern if it met both tests in SBA’s “alternative size standard” as of March 27,
2020: (1) maximum tangible net worth of the business is not more than $15 million; and
(2) the average net income after Federal income taxes (excluding any carry-over losses)
of the business for the two full fiscal years before the date of the application is not more
than $5 million.
A business that qualifies as a small business concern under section 3 of the Small
Business Act, 15 U.S.C. 632, may truthfully attest to its eligibility for PPP loans on the
Borrower Application Form, unless otherwise ineligible.
3. Question: Does my business have to qualify as a small business concern (as defined in
section 3 of the Small Business Act, 15 U.S.C. 632) in order to participate in the PPP?
Answer: No. In addition to small business concerns, a business is eligible for a PPP
loan if the business has 500 or fewer employees whose principal place of residence is in
the United States, or the business meets the SBA employee-based size standards for the
industry in which it operates (if applicable). Similarly, PPP loans are also available for
qualifying tax-exempt nonprofit organizations described in section 501(c)(3) of the
Internal Revenue Code (IRC), tax-exempt veterans organization described in section
501(c)(19) of the IRC, and Tribal business concerns described in section 31(b)(2)(C) of
the Small Business Act that have 500 or fewer employees whose principal place of
residence is in the United States, or meet the SBA employee-based size standards for the
industry in which they operate.
4. Question: Are lenders required to make an independent determination regarding
applicability of affiliation rules under 13 C.F.R. 121.301(f) to borrowers?
Answer: No. It is the responsibility of the borrower to determine which entities (if any)
are its affiliates and determine the employee headcount of the borrower and its affiliates.
Lenders are permitted to rely on borrowers’ certifications.
5. Question: Are borrowers required to apply SBA’s affiliation rules under 13 C.F.R.
121.301(f)?
Answer: Yes. Borrowers must apply the affiliation rules set forth in SBA’s Interim
Final Rule on Affiliation. A borrower must certify on the Borrower Application Form
that the borrower is eligible to receive a PPP loan, and that certification means that the
borrower is a small business concern as defined in section 3 of the Small Business Act
(15 U.S.C. 632), meets the applicable SBA employee-based or revenue-based size
standard, or meets the tests in SBA’s alternative size standard, after applying the
affiliation rules, if applicable. SBA’s existing affiliation exclusions apply to the PPP,
including, for example the exclusions under 13 CFR 121.103(b)(2).
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6. Question: The affiliation rule based on ownership (13 C.F.R. 121.301(f)(1)) states that
SBA will deem a minority shareholder in a business to control the business if the
shareholder has the right to prevent a quorum or otherwise block action by the board of
directors or shareholders. If a minority shareholder irrevocably gives up those rights, is it
still considered to be an affiliate of the business?
Answer: No. If a minority shareholder in a business irrevocably waives or relinquishes
any existing rights specified in 13 C.F.R. 121.301(f)(1), the minority shareholder would
no longer be an affiliate of the business (assuming no other relationship that triggers the
affiliation rules).
7. Question: The CARES Act excludes from the definition of payroll costs any employee
compensation in excess of an annual salary of $100,000. Does that exclusion apply to all
employee benefits of monetary value?
Answer: No. The exclusion of compensation in excess of $100,000 annually applies
only to cash compensation, not to non-cash benefits, including:
• employer contributions to defined-benefit or defined-contribution retirement
plans;
• payment for the provision of employee benefits consisting of group health care
coverage, including insurance premiums; and
• payment of state and local taxes assessed on compensation of employees.
8. Question: Do PPP loans cover paid sick leave?
Answer: Yes. PPP loans covers payroll costs, including costs for employee vacation,
parental, family, medical, and sick leave. However, the CARES Act excludes qualified
sick and family leave wages for which a credit is allowed under sections 7001 and 7003
of the Families First Coronavirus Response Act (Public Law 116–127). Learn more
about the Paid Sick Leave Refundable Credit here.
9. Question: My small business is a seasonal business whose activity increases from April
to June. Considering activity from that period would be a more accurate reflection of my
business’s operations. However, my small business was not fully ramped up on February
15, 2020. Am I still eligible?
Answer: In evaluating a borrower’s eligibility, a lender may consider whether a seasonal
borrower was in operation on February 15, 2020 or for an 8-week period between
February 15, 2019 and June 30, 2019.
10. Question: What if an eligible borrower contracts with a third-party payer such as a
payroll provider or a Professional Employer Organization (PEO) to process payroll and
report payroll taxes?
Answer: SBA recognizes that eligible borrowers that use PEOs or similar payroll
providers are required under some state registration laws to report wage and other data on
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the Employer Identification Number (EIN) of the PEO or other payroll provider. In these
cases, payroll documentation provided by the payroll provider that indicates the amount
of wages and payroll taxes reported to the IRS by the payroll provider for the borrower’s
employees will be considered acceptable PPP loan payroll documentation. Relevant
information from a Schedule R (Form 941), Allocation Schedule for Aggregate Form 941
Filers, attached to the PEO’s or other payroll provider’s Form 941, Employer’s Quarterly
Federal Tax Return, should be used if it is available; otherwise, the eligible borrower
should obtain a statement from the payroll provider documenting the amount of wages
and payroll taxes. In addition, employees of the eligible borrower will not be considered
employees of the eligible borrower’s payroll provider or PEO.
11. Question: May lenders accept signatures from a single individual who is authorized to
sign on behalf of the borrower?
Answer: Yes. However, the borrower should bear in mind that, as the Borrower
Application Form indicates, only an authorized representative of the business seeking a
loan may sign on behalf of the business. An individual’s signature as an “Authorized
Representative of Applicant” is a representation to the lender and to the U.S. government
that the signer is authorized to make the certifications, including with respect to the
applicant and each owner of 20% or more of the applicant’s equity, contained in the
Borrower Application Form. Lenders may rely on that representation and accept a single
individual’s signature on that basis.
12. Question: I need to request a loan to support my small business operations in light of
current economic uncertainty. However, I pleaded guilty to a felony crime a very long
time ago. Am I still eligible for the PPP?
Answer: Yes. Businesses are only ineligible if an owner of 20 percent or more of the
equity of the applicant is presently incarcerated, on probation, on parole; subject to an
indictment, criminal information, arraignment, or other means by which formal criminal
charges are brought in any jurisdiction; or, within the last five years, for any felony, has
been convicted; pleaded guilty; pleaded nolo contendere; been placed on pretrial
diversion; or been placed on any form of parole or probation (including probation before
judgment).
13. Question: Are lenders permitted to use their own online portals and an electronic form
that they create to collect the same information and certifications as in the Borrower
Application Form, in order to complete implementation of their online portals?
Answer: Yes. Lenders may use their own online systems and a form they establish that
asks for the same information (using the same language) as the Borrower Application
Form. Lenders are still required to send the data to SBA using SBA’s interface.
14. Question: What time period should borrowers use to determine their number of
employees and payroll costs to calculate their maximum loan amounts?
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Answer: In general, borrowers can calculate their aggregate payroll costs using data
either from the previous 12 months or from calendar year 2019. For seasonal businesses,
the applicant may use average monthly payroll for the period between February 15, 2019,
or March 1, 2019, and June 30, 2019. An applicant that was not in business from
February 15, 2019 to June 30, 2019 may use the average monthly payroll costs for the
period January 1, 2020 through February 29, 2020.
Borrowers may use their average employment over the same time periods to determine
their number of employees, for the purposes of applying an employee-based size
standard. Alternatively, borrowers may elect to use SBA’s usual calculation: the average
number of employees per pay period in the 12 completed calendar months prior to the
date of the loan application (or the average number of employees for each of the pay
periods that the business has been operational, if it has not been operational for 12
months).
15. Question: Should payments that an eligible borrower made to an independent contractor
or sole proprietor be included in calculations of the eligible borrower’s payroll costs?
Answer: No. Any amounts that an eligible borrower has paid to an independent
contractor or sole proprietor should be excluded from the eligible business’s payroll
costs. However, an independent contractor or sole proprietor will itself be eligible for a
loan under the PPP, if it satisfies the applicable requirements.
16. Question: How should a borrower account for federal taxes when determining its
payroll costs for purposes of the maximum loan amount, allowable uses of a PPP loan,
and the amount of a loan that may be forgiven?
Answer: Under the Act, payroll costs are calculated on a gross basis without regard to
(i.e., not including subtractions or additions based on) federal taxes imposed or withheld,
such as the employee’s and employer’s share of Federal Insurance Contributions Act
(FICA) and income taxes required to be withheld from employees. As a result, payroll
costs are not reduced by taxes imposed on an employee and required to be withheld by
the employer, but payroll costs do not include the employer’s share of payroll tax. For
example, an employee who earned $4,000 per month in gross wages, from which $500 in
federal taxes was withheld, would count as $4,000 in payroll costs. The employee would
receive $3,500, and $500 would be paid to the federal government. However, the
employer-side federal payroll taxes imposed on the $4,000 in wages are excluded from
payroll costs under the statute. 3
3
The definition of “payroll costs” in the CARES Act, 15 U.S.C. 636(a)(36)(A)(viii), excludes “taxes imposed or
withheld under chapters 21, 22, or 24 of the Internal Revenue Code of 1986 during the covered period,” defined as
February 15, 2020, to June 30, 2020. As described above, the SBA interprets this statutory exclusion to mean that
payroll costs are calculated on a gross basis, without subtracting federal taxes that are imposed on the employee or
withheld from employee wages. Unlike employer-side payroll taxes, such employee-side taxes are ordinarily
expressed as a reduction in employee take-home pay; their exclusion from the definition of payroll costs means
payroll costs should not be reduced based on taxes imposed on the employee or withheld from employee wages.
This interpretation is consistent with the text of the statute and advances the legislative purpose of ensuring workers
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17. Question: I filed or approved a loan application based on the version of the PPP Interim
Final Rule published on April 2, 2020. Do I need to take any action based on the updated
guidance in these FAQs?
Answer: No. Borrowers and lenders may rely on the laws, rules, and guidance available
at the time of the relevant application. However, borrowers whose previously submitted
loan applications have not yet been processed may revise their applications based on
clarifications reflected in these FAQs.
18. Question: Are PPP loans for existing customers considered new accounts for FinCEN
Rule CDD purposes? Are lenders required to collect, certify, or verify beneficial
ownership information in accordance with the rule requirements for existing customers?
Answer: If the PPP loan is being made to an existing customer and the necessary
information was previously verified, you do not need to re-verify the information.
Furthermore, if federally insured depository institutions and federally insured credit
unions eligible to participate in the PPP program have not yet collected beneficial
ownership information on existing customers, such institutions do not need to collect and
verify beneficial ownership information for those customers applying for new PPP loans,
unless otherwise indicated by the lender’s risk-based approach to BSA compliance. 4
19. Question: Do lenders have to use a promissory note provided by SBA or may they use
their own?
Answer: Lenders may use their own promissory note or an SBA form of promissory
note.
20. Question: The amount of forgiveness of a PPP loan depends on the borrower’s payroll
costs over an eight-week period; when does that eight-week period begin?
Answer: The eight-week period begins on the date the lender makes the first
disbursement of the PPP loan to the borrower. The lender must make the first
disbursement of the loan no later than ten calendar days from the date of loan approval. 5
21. Question: Do lenders need a separate SBA Authorization document to issue PPP loans?
Answer: No. A lender does not need a separate SBA Authorization for SBA to
guarantee a PPP loan. However, lenders must have executed SBA Form 2484 (the
remain paid and employed. Further, because the reference period for determining a borrower’s maximum loan
amount will largely or entirely precede the period from February 15, 2020, to June 30, 2020, and the period during
which borrowers will be subject to the restrictions on allowable uses of the loans may extend beyond that period, for
purposes of the determination of allowable uses of loans and the amount of loan forgiveness, this statutory exclusion
will apply with respect to such taxes imposed or withheld at any time, not only during such period.
4
Questions 2 – 18 published April 6, 2020.
5
Questions 19 – 20 published April 8, 2020.
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Lender Application Form for the Paycheck Protection Program) 6 to issue PPP loans and
receive a loan number for each originated PPP loan. Lenders may include in their
promissory notes for PPP loans any terms and conditions, including relating to
amortization and disclosure, that are not inconsistent with Sections 1102 and 1106 of the
CARES Act, the PPP Interim Final Rules and guidance, and SBA Form 2484.
22. Question: I am a non-bank lender that meets all applicable criteria of the PPP Interim
Final Rule. Will I be automatically enrolled as a PPP lender? What criteria will SBA
and the Treasury Department use to assess whether to approve my application to
participate as a PPP lender?
Answer: We encourage lenders that are not currently 7(a) lenders to apply in order to
increase the scope of PPP lending options and the speed with which PPP loans can be
disbursed to help small businesses across America. We recognize that financial
technology solutions can promote efficiency and financial inclusion in implementing the
PPP. Applicants should submit SBA Form 3507 and the relevant attachments to
NFRLApplicationForPPP@sba.gov. Submission of the SBA Form 3507 does not result
in automatic enrollment in the PPP. SBA and the Treasury Department will evaluate
each application from a non-bank or non-insured depository institution lender and
determine whether the applicant has the necessary qualifications to process, close,
disburse, and service PPP loans made with SBA’s guarantee. SBA may request
additional information from the applicant before making a determination.
23. Question: How do the $10 million cap and affiliation rules work for franchises?
Answer: If a franchise brand is listed on the SBA Franchise Directory, each of its
franchisees that meets the applicable size standard can apply for a PPP loan. (The
franchisor does not apply on behalf of its franchisees.) The $10 million cap on PPP loans
is a limit per franchisee entity, and each franchisee is limited to one PPP loan.
Franchise brands that have been denied listing on the Directory because of affiliation
between franchisor and franchisee may request listing to receive PPP loans. SBA will
not apply affiliation rules to a franchise brand requesting listing on the Directory to
participate in the PPP, but SBA will confirm that the brand is otherwise eligible for
listing on the Directory.
24. Question: How do the $10 million cap and affiliation rules work for hotels and
restaurants (and any business assigned a North American Industry Classification System
(NAICS) code beginning with 72)?
Answer: Under the CARES Act, any single business entity that is assigned a NAICS
code beginning with 72 (including hotels and restaurants) and that employs not more than
500 employees per physical location is eligible to receive a PPP loan.
6
This requirement is satisfied by a lender when the lender completes the process of submitting a loan through the E-
Tran system; no transmission or retention of a physical copy of Form 2484 is required.
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In addition, SBA’s affiliation rules (13 CFR 121.103 and 13 CFR 121.301) do not apply
to any business entity that is assigned a NAICS code beginning with 72 and that employs
not more than a total of 500 employees. As a result, if each hotel or restaurant location
owned by a parent business is a separate legal business entity, each hotel or restaurant
location that employs not more than 500 employees is permitted to apply for a separate
PPP loan provided it uses its unique EIN.
The $10 million maximum loan amount limitation applies to each eligible business entity,
because individual business entities cannot apply for more than one loan. The following
examples illustrate how these principles apply.
Example 1. Company X directly owns multiple restaurants and has no affiliates.
• Company X may apply for a PPP loan if it employs 500 or fewer employees per
location (including at its headquarters), even if the total number of employees
employed across all locations is over 500.
Example 2. Company X wholly owns Company Y and Company Z (as a result,
Companies X, Y, and Z are all affiliates of one another). Company Y and Company Z
each own a single restaurant with 500 or fewer employees.
• Company Y and Company Z can each apply for a separate PPP loan, because
each has 500 or fewer employees. The affiliation rules do not apply, because
Company Y and Company Z each has 500 or fewer employees and is in the food
services business (with a NAICS code beginning with 72).
Example 3. Company X wholly owns Company Y and Company Z (as a result,
Companies X, Y, and Z are all affiliates of one another). Company Y owns a restaurant
with 400 employees. Company Z is a construction company with 400 employees.
• Company Y is eligible for a PPP loan because it has 500 or fewer employees.
The affiliation rules do not apply to Company Y, because it has 500 or fewer
employees and is in the food services business (with a NAICS code beginning
with 72).
• The waiver of the affiliation rules does not apply to Company Z, because
Company Z is in the construction industry. Under SBA’s affiliation rules, 13
CFR 121.301(f)(1) and (3), Company Y and Company Z are affiliates of one
another because they are under the common control of Company X, which wholly
owns both companies. This means that the size of Company Z is determined by
adding its employees to those of Companies X and Y. Therefore, Company Z is
deemed to have more than 500 employees, together with its affiliates. However,
Company Z may be eligible to receive a PPP loan as a small business concern if
it, together with Companies X and Y, meets SBA’s other applicable size
standards,” as explained in FAQ #2.
25. Question: Does the information lenders are required to collect from PPP applicants
regarding every owner who has a 20% or greater ownership stake in the applicant
business (i.e., owner name, title, ownership %, TIN, and address) satisfy a lender’s
obligation to collect beneficial ownership information (which has a 25% ownership
threshold) under the Bank Secrecy Act?
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As of April 29, 2020
Answer:
For lenders with existing customers: With respect to collecting beneficial ownership
information for owners holding a 20% or greater ownership interest, if the PPP loan is
being made to an existing customer and the lender previously verified the necessary
information, the lender does not need to re-verify the information. Furthermore, if
federally insured depository institutions and federally insured credit unions eligible to
participate in the PPP program have not yet collected such beneficial ownership
information on existing customers, such institutions do not need to collect and verify
beneficial ownership information for those customers applying for new PPP loans, unless
otherwise indicated by the lender’s risk-based approach to Bank Secrecy Act (BSA)
compliance.
For lenders with new customers: For new customers, the lender’s collection of the
following information from all natural persons with a 20% or greater ownership stake in
the applicant business will be deemed to satisfy applicable BSA requirements and
FinCEN regulations governing the collection of beneficial ownership information: owner
name, title, ownership %, TIN, address, and date of birth. If any ownership interest of
20% or greater in the applicant business belongs to a business or other legal entity,
lenders will need to collect appropriate beneficial ownership information for that entity.
If you have questions about requirements related to beneficial ownership, go to
https://www.fincen.gov/resources/statutes-and-regulations/cdd-final-rule. Decisions
regarding further verification of beneficial ownership information collected from new
customers should be made pursuant to the lender’s risk-based approach to BSA
compliance. 7
26. Question: SBA regulations require approval by SBA’s Standards of Conduct Committee
(SCC) for SBA Assistance, other than disaster assistance, to an entity, if its sole
proprietor, partner, officer, director, or stockholder with a 10 percent or more interest is:
a current SBA employee; a Member of Congress; an appointed official or employee of
the legislative or judicial branch; a member or employee of an SBA Advisory Council or
SCORE volunteer; or a household member of any of the preceding individuals. Do these
entities need the approval of the SCC in order to be eligible for a PPP loan?
Answer: The SCC has authorized a blanket approval for PPP loans to such entities so
that further action by the SCC is not necessary in the PPP program.
27. Question: SBA regulations require a written statement of no objection by the pertinent
Department or military service before it provides any SBA Assistance, other than disaster
loans, to an entity, if its sole proprietor, partner, officer, director, or stockholder with a 10
percent or more interest, or if a household member of any of the preceding individuals, is
an employee of another Government Department or Agency having a grade of at least
GS-13 or its equivalent. Does this requirement apply to PPP loans?
7
Questions 21 – 25 published April 13, 2020.
A00260
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As of April 29, 2020
Answer: No. The SCC has determined that a written statement of no objection is not
required from another Government Department or Agency for PPP loans.
28. Question: Is a lender permitted to submit a PPP loan application to SBA through E-Tran
before the lender has fulfilled its responsibility to review the required borrower
documentation and calculation of payroll costs?
Answer: No. Before a lender submits a PPP loan through E-Tran, the lender must have
collected the information and certifications contained in the Borrower Application Form
and the lender must have fulfilled its obligations set forth in paragraphs 3.b.(i)-(iii) of the
PPP Interim Final Rule. Please refer to the Interim Final Rule and FAQ #1 for more
information on the lender’s responsibility regarding confirmation of payroll costs.
Lenders who did not understand that these steps are required before submission to E-Tran
need not withdraw applications submitted to E-Tran before April 14, 2020, but must
fulfill lender responsibilities with respect to those applications as soon as practicable and
no later than loan closing. 8
29. Question: Can lenders use scanned copies of documents or E-signatures or E-consents
permitted by the E-sign Act?
Answer: Yes. All PPP lenders may accept scanned copies of signed loan applications
and documents containing the information and certifications required by SBA Form 2483
and the promissory note used for the PPP loan. Additionally, lenders may also accept
any form of E-consent or E-signature that complies with the requirements of the
Electronic Signatures in Global and National Commerce Act (P.L. 106-229).
If electronic signatures are not feasible, when obtaining a wet ink signature without in-
person contact, lenders should take appropriate steps to ensure the proper party has
executed the document.
This guidance does not supersede signature requirements imposed by other applicable
law, including by the lender’s primary federal regulator. 9
30. Question: Can a lender sell a PPP loan into the secondary market?
Answer: Yes. A PPP loan may be sold into the secondary market at any time after the
loan is fully disbursed. A secondary market sale of a PPP loan does not require SBA
approval. A PPP loan sold into the secondary market is 100% SBA guaranteed. A PPP
loan may be sold on the secondary market at a premium or a discount to par value. 10
8
Questions 26 – 28 published April 14, 2020.
9
Question 29 published April 15, 2020.
10
Question 30 published April 17, 2020.
A00261
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As of April 29, 2020
31. Question: Do businesses owned by large companies with adequate sources of liquidity
to support the business’s ongoing operations qualify for a PPP loan?
Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all
borrowers must assess their economic need for a PPP loan under the standard established
by the CARES Act and the PPP regulations at the time of the loan application. Although
the CARES Act suspends the ordinary requirement that borrowers must be unable to
obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers
still must certify in good faith that their PPP loan request is necessary. Specifically,
before submitting a PPP application, all borrowers should review carefully the required
certification that “[c]urrent economic uncertainty makes this loan request necessary to
support the ongoing operations of the Applicant.” Borrowers must make this certification
in good faith, taking into account their current business activity and their ability to access
other sources of liquidity sufficient to support their ongoing operations in a manner that is
not significantly detrimental to the business. For example, it is unlikely that a public
company with substantial market value and access to capital markets will be able to make
the required certification in good faith, and such a company should be prepared to
demonstrate to SBA, upon request, the basis for its certification.
Lenders may rely on a borrower’s certification regarding the necessity of the loan
request. Any borrower that applied for a PPP loan prior to the issuance of this guidance
and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the
required certification in good faith. 11
32. Question: Does the cost of a housing stipend or allowance provided to an employee as
part of compensation count toward payroll costs?
Answer: Yes. Payroll costs includes all cash compensation paid to employees, subject to
the $100,000 annual compensation per employee limitation.
33. Question: Is there existing guidance to help PPP applicants and lenders determine
whether an individual employee’s principal place of residence is in the United States?
Answer: PPP applicants and lenders may consider IRS regulations (26 CFR § 1.121-
1(b)(2)) when determining whether an individual employee’s principal place of residence
is in the United States.
34. Question: Are agricultural producers, farmers, and ranchers eligible for PPP loans?
Answer: Yes. Agricultural producers, farmers, and ranchers are eligible for PPP loans
if: (i) the business has 500 or fewer employees, or (ii) the business fits within the
revenue-based sized standard, which is average annual receipts of $1 million.
Additionally, agricultural producers, farmers, and ranchers can qualify for PPP loans as a
small business concern if their business meets SBA’s “alternative size standard.” The
11
Question 31 published April 23, 2020.
A00262
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 65 of 125
As of April 29, 2020
“alternative size standard” is currently: (1) maximum net worth of the business is not
more than $15 million, and (2) the average net income after Federal income taxes
(excluding any carry-over losses) of the business for the two full fiscal years before the
date of the application is not more than $5 million.
For all of these criteria, the applicant must include its affiliates in its calculations. Link to
Applicable Affiliation Rules for the PPP.
35. Question: Are agricultural and other forms of cooperatives eligible to receive PPP
loans?
Answer: As long as other PPP eligibility requirements are met, small agricultural
cooperatives and other cooperatives may receive PPP loans. 12
36. Question: To determine borrower eligibility under the 500-employee or other applicable
threshold established by the CARES Act, must a borrower count all employees or only
full-time equivalent employees?
Answer: For purposes of loan eligibility, the CARES Act defines the term employee to
include “individuals employed on a full-time, part-time, or other basis.” A borrower
must therefore calculate the total number of employees, including part-time employees,
when determining their employee headcount for purposes of the eligibility threshold. For
example, if a borrower has 200 full-time employees and 50 part-time employees each
working 10 hours per week, the borrower has a total of 250 employees.
By contrast, for purposes of loan forgiveness, the CARES Act uses the standard of “full-
time equivalent employees” to determine the extent to which the loan forgiveness amount
will be reduced in the event of workforce reductions. 13
37. Question: Do businesses owned by private companies with adequate sources of liquidity
to support the business’s ongoing operations qualify for a PPP loan?
Answer: See response to FAQ #31. 14
38. Question: Section 1102 of the CARES Act provides that PPP loans are available only to
applicants that were “in operation on February 15, 2020.” Is a business that was in
operation on February 15, 2020 but had a change in ownership after February 15, 2020
eligible for a PPP loan?
Answer: Yes. As long as the business was in operation on February 15, 2020, if it meets
the other eligibility criteria, the business is eligible to apply for a PPP loan regardless of
the change in ownership. In addition, where there is a change in ownership effectuated
through a purchase of substantially all assets of a business that was in operation on
12
Questions 32 – 35 published April 24, 2020.
13
Questions 36 published April 26, 2020.
14
Question 37 published April 28, 2020.
A00263
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 66 of 125
As of April 29, 2020
February 15, the business acquiring the assets will be eligible to apply for a PPP loan
even if the change in ownership results in the assignment of a new tax ID number and
even if the acquiring business was not in operation until after February 15, 2020. If the
acquiring business has maintained the operations of the pre-sale business, the acquiring
business may rely on the historic payroll costs and headcount of the pre-sale business for
the purposes of its PPP application, except where the pre-sale business had applied for
and received a PPP loan. The Administrator, in consultation with the Secretary, has
determined that the requirement that a business “was in operation on February 15, 2020”
should be applied based on the economic realities of the business’s operations. 15
15
Question 38 published April 29, 2020.
A00264
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 67 of 125
EXHIBIT 27
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 68 of 125
Short Message Report
Conversations: 1 Participants: 2
Total Messages: 298 Date Range: 5/1/2020
Outline of Conversations
DD5PLH2NN - 2020/05/01 • 298 messages on 5/1/2020 • Amit Kesarwani <akesarwani@kabbage.com>
• Siddharth Shah <sshah@kabbage.com>
A00265
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 69 of 125
Messages in chronological order (times are shown in GMT +00:00)
DD5PLH2NN - 2020/05/01
s Siddharth Shah <sshah@kabbage.com> 5/1/2020, 12:58 AM
Sorry was sleeping
s Siddharth Shah <sshah@kabbage.com> 12:58 AM
Is it resolved
A Amit Kesarwani <akesarwani@kabbage.com> 12:59 AM
No
A Amit Kesarwani <akesarwani@kabbage.com> 12:59 AM
What do you think
s Siddharth Shah <sshah@kabbage.com> 12:59 AM
Continue with app 1
s Siddharth Shah <sshah@kabbage.com> 12:59 AM
Simplest solution
A Amit Kesarwani <akesarwani@kabbage.com> 12:59 AM
Why can't we clear kyb
A Amit Kesarwani <akesarwani@kabbage.com> 12:59 AM
For app 2
s Siddharth Shah <sshah@kabbage.com> 1 :00 AM
No EIN
A Amit Kesarwani <akesarwani@kabbage.com> 1:00 AM
Sole proprietor doesn't have
A Amit Kesarwani <akesarwani@kabbage.com> 1:00 AM
Generally
A Amit Kesarwani <akesarwani@kabbage.com> 1:00 AM
I have seen more
s Siddharth Shah <sshah@kabbage.com> 1:01 AM
Can they submit to sba without ein?
A Amit Kesarwani <akesarwani@kabbage.com> 1:01 AM
Let's ask
A Amit Kesarwani <akesarwani@kabbage.com> 1:01 AM
On group
A Amit Kesarwani <akesarwani@kabbage.com> 1:01 AM
I think they can
A Amit Kesarwani <akesarwani@kabbage.com> 1:01 AM
For soleprop
A00266
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 70 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 1:02 AM
She attached her license
A Amit Kesarwani <akesarwani@kabbage.com> 1:02 AM
And also tax documents
A Amit Kesarwani <akesarwani@kabbage.com> 1:02 AM
If anything is wrong
A Amit Kesarwani <akesarwani@kabbage.com> 1:02 AM
She is commiting federal crime
s Siddharth Shah <sshah@kabbage.com> 1:02 AM
What's the problem with the App 1
A Amit Kesarwani <akesarwani@kabbage.com> 1:02 AM
Kabbage is not liable
A Amit Kesarwani <akesarwani@kabbage.com> 1:03 AM
Don't know
s Siddharth Shah <sshah@kabbage.com> 1:03 AM
Is that true
s Siddharth Shah <sshah@kabbage.com> 1:03 AM
Then when is kabbage liable
A Amit Kesarwani <akesarwani@kabbage.com> 1:03 AM
It's first party fraud
A Amit Kesarwani <akesarwani@kabbage.com> 1:03 AM
We are not liable
s Siddharth Shah <sshah@kabbage.com> 1:03 AM
Are you sure about that
s Siddharth Shah <sshah@kabbage.com> 1:03 AM
So if anyone forges documents, kabbage is not liable?
A Amit Kesarwani <akesarwani@kabbage.com> 1:04 AM
Spencer , I, KP , Pujish and I had a long chat yesterday
s Siddharth Shah <sshah@kabbage.com> 1:04 AM
What's the point of any fraud checks then? I don't understand
A Amit Kesarwani <akesarwani@kabbage.com> 1:04 AM
Forged doc is a different issue
A Amit Kesarwani <akesarwani@kabbage.com> 1:04 AM
It's not forged
s Siddharth Shah <sshah@kabbage.com> 1:04 AM
I don't feel comfortable
A00267
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 71 of 125
s Siddharth Shah <sshah@kabbage.com> 1:04 AM
Please work with Bethany and team
A Amit Kesarwani <akesarwani@kabbage.com> 1:05 AM
About which case?
s Siddharth Shah <sshah@kabbage.com> 1:05 AM
This case
A Amit Kesarwani <akesarwani@kabbage.com> 1:06 AM
What's the process to remove flag
A Amit Kesarwani <akesarwani@kabbage.com> 1:06 AM
I will do it
s Siddharth Shah <sshah@kabbage.com> 1:06 AM
Log in to <http://admin.kabbage.comladmin.kabbage.com>, search via userid, click on applications, and change status
to verified
A Amit Kesarwani <akesarwani@kabbage.com> 1:07 AM
Okay
s Siddharth Shah <sshah@kabbage.com> 1:07 AM
Update Salesforce with details in case of audit concerns
A Amit Kesarwani <akesarwani@kabbage.com> 1:07 AM
Was the first app lie?
s Siddharth Shah <sshah@kabbage.com> 1:08 AM
Corporation
A Amit Kesarwani <akesarwani@kabbage.com> 1:09 AM
I think she is the only employee
A Amit Kesarwani <akesarwani@kabbage.com> 1:10 AM
So probably she filled taxes as sole prop
A Amit Kesarwani <akesarwani@kabbage.com> 1:10 AM
That's why we have 1040c and not 940
s Siddharth Shah <sshah@kabbage.com> 1:10 AM
They only provided schedule C btw
A Amit Kesarwani <akesarwani@kabbage.com> 1:10 AM
That's the reason she deleted
s Siddharth Shah <sshah@kabbage.com> 1:10 AM
Or full tax returns
s Siddharth Shah <sshah@kabbage.com> 1:10 AM
*Not
A Amit Kesarwani <akesarwani@kabbage.com> 1:10 AM
Schedule C is the only requirement
s Siddharth Shah <sshah@kabbage.com> 1:10 AM
Anyone can create that on word doc
A00268
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 72 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 1:10 AM
For sole prop
s Siddharth Shah <sshah@kabbage.com> 1:10 AM
For payroll
s Siddharth Shah <sshah@kabbage.com> 1:11 AM
For establishing business existence, we should request full tax return imo
A Amit Kesarwani <akesarwani@kabbage.com> 1:13 AM
whats the process today for passing KYB for soleprop
A Amit Kesarwani <akesarwani@kabbage.com> 1:13 AM
They will Never have a time
A Amit Kesarwani <akesarwani@kabbage.com> 1 :13 AM
I am asking from manual verification standpoint
S Siddharth Shah <sshah@kabbage.com> 1:16 AM
[April 27th, 2020 3:50 PM] jrobinson: would y'all use a 2018 schedule C to verify business name, users association and
address? or only 2019?
A Amit Kesarwani <akesarwani@kabbage.com> 1:16 AM
can you reset my TLO password?
A Amit Kesarwani <akesarwani@kabbage.com> 1:18 AM
It says email will be sent
A Amit Kesarwani <akesarwani@kabbage.com> 1 :18 AM
but it never came
s Siddharth Shah <sshah@kabbage.com> 1:18 AM
Are you logged in to vpn?
A Amit Kesarwani <akesarwani@kabbage.com> 1:18 AM
yes
A Amit Kesarwani <akesarwani@kabbage.com> 1:18 AM
I wanted to check her on TLO
A Amit Kesarwani <akesarwani@kabbage.com> 1:18 AM
based on SSN
A Amit Kesarwani <akesarwani@kabbage.com> 1:18 AM
if there is any association
s Siddharth Shah <sshah@kabbage.com> 1:18 AM
Ok give me a few minutes
s Siddharth Shah <sshah@kabbage.com> 1:18 AM
Association of?
A Amit Kesarwani <akesarwani@kabbage.com> 1:19 AM
Association with this business
A00269
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 73 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 1:19 AM
Thats a proof of KYB
s Siddharth Shah <sshah@kabbage.com> 1 :19 AM
I had checked
s Siddharth Shah <sshah@kabbage.com> 1:19 AM
I could find the Corp in TLO
s Siddharth Shah <sshah@kabbage.com> 1:19 AM
Not the sole prop
A Amit Kesarwani <akesarwani@kabbage.com> 1:19 AM
not the business
A Amit Kesarwani <akesarwani@kabbage.com> 1:19 AM
Search individual
s Siddharth Shah <sshah@kabbage.com> 1:19 AM
Probably why they got a 0
s Siddharth Shah <sshah@kabbage.com> 1:20 AM
But we are reviewing KYB
A Amit Kesarwani <akesarwani@kabbage.com> 1:20 AM
then she if she has associated with her profile
s Siddharth Shah <sshah@kabbage.com> 1:21 AM
The individual can be associated to the address but we would still need proof that the business exists and is associated
to that address
s Siddharth Shah <sshah@kabbage.com> 1:22 AM
Will reset in 5 mins
A Amit Kesarwani <akesarwani@kabbage.com> 1:23 AM
Basically, TLO shows business affiliations too with individuals
A Amit Kesarwani <akesarwani@kabbage.com> 1:23 AM
I want to see if we serah by her SSN, do we see any business under her profile
A Amit Kesarwani <akesarwani@kabbage.com> 1:23 AM
If not, then what addional documents we will need
A Amit Kesarwani <akesarwani@kabbage.com> 1:23 AM
to Pass her KYB?
s Siddharth Shah <sshah@kabbage.com> 1:25 AM
i have reset
s Siddharth Shah <sshah@kabbage.com> 1:25 AM
i would request a full tax return
A Amit Kesarwani <akesarwani@kabbage.com> 1:25 AM
Great
A Amit Kesarwani <akesarwani@kabbage.com> 1 :25 AM
Thanks,
A00270
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 74 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 1:25 AM
Now, what if she had no business in 2018
s Siddharth Shah <sshah@kabbage.com> 1:26 AM
then how does she have a schedule C
A Amit Kesarwani <akesarwani@kabbage.com> 1:26 AM
Thats for 2019 I guess
s Siddharth Shah <sshah@kabbage.com> 1:26 AM
then can provide full tax return for 2019
A Amit Kesarwani <akesarwani@kabbage.com> 1:26 AM
Got it, make sense
A Amit Kesarwani <akesarwani@kabbage.com> 1 :26 AM
I will respond KP
A Amit Kesarwani <akesarwani@kabbage.com> 1:27 AM
Give me 5 mins
A Amit Kesarwani <akesarwani@kabbage.com> 1:27 AM
I will review TLO
A Amit Kesarwani <akesarwani@kabbage.com> 1:27 AM
if not enough, we can request W2 and Full tax return
A Amit Kesarwani <akesarwani@kabbage.com> 1:27 AM
Pujish Need W2
A Amit Kesarwani <akesarwani@kabbage.com> 1:28 AM
he just confirmed
A Amit Kesarwani <akesarwani@kabbage.com> 1:28 AM
Who can send these doc requests?
s Siddharth Shah <sshah@kabbage.com> 1:28 AM
You can open it in Kore
s Siddharth Shah <sshah@kabbage.com> 1:28 AM
Or ask Pujish
s Siddharth Shah <sshah@kabbage.com> 1:28 AM
Or give me a few minutes
A Amit Kesarwani <akesarwani@kabbage.com> 1:29 AM
I will get it via Pujish
A Amit Kesarwani <akesarwani@kabbage.com> 1:29 AM
Thanks
A Amit Kesarwani <akesarwani@kabbage.com> 1:32 AM
I changed but not working G
s Siddharth Shah <sshah@kabbage.com> 1:33 AM
A00271
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 75 of 125
What error did you get
A Amit Kesarwani <akesarwani@kabbage.com> 1:33 AM
*LOGIN FAILED: Invalid USER ID or PASSWORD.*
A Amit Kesarwani <akesarwani@kabbage.com> 1:33 AM
worked now
A Amit Kesarwani <akesarwani@kabbage.com> 1:33 AM
wierd
A Amit Kesarwani <akesarwani@kabbage.com> 1:34 AM
what selections
s Siddharth Shah <sshah@kabbage.com> 1:34 AM
Great
A Amit Kesarwani <akesarwani@kabbage.com> 1:34 AM
please remind me
s Siddharth Shah <sshah@kabbage.com> 1:34 AM
3b
s Siddharth Shah <sshah@kabbage.com> 1:34 AM
3
s Siddharth Shah <sshah@kabbage.com> 1:34 AM
Last one is false
A Amit Kesarwani <akesarwani@kabbage.com> 1:34 AM
yes or no in 2
s Siddharth Shah <sshah@kabbage.com> 1:35 AM
What is the question
A Amit Kesarwani <akesarwani@kabbage.com> 1:36 AM
Will the TransUnion Risk and Alternative Data Solutions, Inc. ("TRADS") services be used in connection with demand
deposit, transaction account or brokerage account opening, monitoring or review (excluding collection activities)?
A Amit Kesarwani <akesarwani@kabbage.com> 1:36 AM
should be No i guess
A Amit Kesarwani <akesarwani@kabbage.com> 1:41 AM
She run this company as per TLO
A Amit Kesarwani <akesarwani@kabbage.com> 1:41 AM
as sole prop
s Siddharth Shah <sshah@kabbage.com> 1:41 AM
Where did you see that
s Siddharth Shah <sshah@kabbage.com> 1:41 AM
Can you send screenshot
A Amit Kesarwani <akesarwani@kabbage.com> 1:42 AM
Comprehensive report
A00272
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 76 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 1:42 AM
US Corporate Affiliations (2 Found)
s Siddharth Shah <sshah@kabbage.com> 1 :43 AM
Ok
A Amit Kesarwani <akesarwani@kabbage.com> 1:44 AM
Can you please also see and double check
A Amit Kesarwani <akesarwani@kabbage.com> 1:44 AM
I am downloading
A Amit Kesarwani <akesarwani@kabbage.com> 1:44 AM
and sending you
A Amit Kesarwani <akesarwani@kabbage.com> 1:45 AM
Please delete after download and review
s Siddharth Shah <sshah@kabbage.com> 1:46 AM
its showing corporation
A Amit Kesarwani <akesarwani@kabbage.com> 1:47 AM
can corporations file 1040C
s Siddharth Shah <sshah@kabbage.com> 1:47 AM
you will have to delete the comprehensive report from your end
s Siddharth Shah <sshah@kabbage.com> 1:48 AM
thats the business name they used on the first app and got a 50
s Siddharth Shah <sshah@kabbage.com> 1:48 AM
deleting image
A Amit Kesarwani <akesarwani@kabbage.com> 1:49 AM
this is wierd case then
s Siddharth Shah <sshah@kabbage.com> 1:49 AM
exactly
A Amit Kesarwani <akesarwani@kabbage.com> 1:49 AM
Something is wrong
A Amit Kesarwani <akesarwani@kabbage.com> 1 :49 AM
I think single LLC can file 1040C
A Amit Kesarwani <akesarwani@kabbage.com> 1:52 AM
She is a single LLC
s Siddharth Shah <sshah@kabbage.com> 1:52 AM
would single lie have schedule C?
s Siddharth Shah <sshah@kabbage.com> 1:52 AM
isnt that for sole prop
A Amit Kesarwani <akesarwani@kabbage.com> 1:53 AM
A00273
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 77 of 125
Tax Forms/1040•Schedule C
• 1040 Schedule Cs are often required for Sole Proprietorships and Single LLCs. They are standard in
tax documents and the key values we look for are in LINE 31 and LINE 14
• If Line 31 is negative (it often is), put a 0.00 in the '1040 Schedule-C Line 31' box in Kore.
• In the example below, the 1040 Schedule C is not required because the borders aren"l highlighted In
Red
Image: image.png (82 KB)
s Siddharth Shah <sshah@kabbage.com> 1:54 AM
ok
s Siddharth Shah <sshah@kabbage.com> 1:54 AM
we should request full tax return...anyone can type a schedule c and send
s Siddharth Shah <sshah@kabbage.com> 1:54 AM
there is no confirmation on this schedule c that it has been filed with IRS
A Amit Kesarwani <akesarwani@kabbage.com> 1:55 AM
I know, but looks unlikely because her old app and new app had same numbers in 1040c
A Amit Kesarwani <akesarwani@kabbage.com> 1:55 AM
But we will ask
A Amit Kesarwani <akesarwani@kabbage.com> 1:55 AM
anyways
A Amit Kesarwani <akesarwani@kabbage.com> 1:56 AM
who can clear a KYC/KYB flag, and put manual verification need field
A Amit Kesarwani <akesarwani@kabbage.com> 1:56 AM
?
A Amit Kesarwani <akesarwani@kabbage.com> 1:56 AM
Until we get void check and Full Tax
A Amit Kesarwani <akesarwani@kabbage.com> 1:56 AM
will not release money
A Amit Kesarwani <akesarwani@kabbage.com> 1:57 AM
Are you happy with this verdict?
s Siddharth Shah <sshah@kabbage.com> 1:57 AM
it is not about me being happy or not...but sure it works
A Amit Kesarwani <akesarwani@kabbage.com> 1:57 AM
i know, you are expert
s Siddharth Shah <sshah@kabbage.com> 1:57 AM
can you see if you can do it in admin
A Amit Kesarwani <akesarwani@kabbage.com> 1:57 AM
and i am learning
A Amit Kesarwani <akesarwani@kabbage.com> 1:58 AM
A00274
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 78 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 1:58 AM
so, i respect your opinion
s Siddharth Shah <sshah@kabbage.com> 1 :58 AM
if not, i will do it here in a few minutes
A Amit Kesarwani <akesarwani@kabbage.com> 1:58 AM
this is a new area for me
A Amit Kesarwani <akesarwani@kabbage.com> 2:02 AM
can't i think I don't have admin privilage
A Amit Kesarwani <akesarwani@kabbage.com> 2:02 AM
it was taken away
s Siddharth Shah <sshah@kabbage.com> 2:02 AM
ok give me 10 minutes
A Amit Kesarwani <akesarwani@kabbage.com> 2:03 AM
few days back when Clint was doing it
A Amit Kesarwani <akesarwani@kabbage.com> 2:03 AM
So, two doc requests
A Amit Kesarwani <akesarwani@kabbage.com> 2:03 AM
and manual var failed flag
s Siddharth Shah <sshah@kabbage.com> 2:03 AM
doc request can be opened in kore and flag can also be added
s Siddharth Shah <sshah@kabbage.com> 2:03 AM
its just the verification thing
A Amit Kesarwani <akesarwani@kabbage.com> 2:03 AM
take your time, no rush
A Amit Kesarwani <akesarwani@kabbage.com> 2:03 AM
Thanks
A Amit Kesarwani <akesarwani@kabbage.com> 2:04 AM
We will do all diligence
A Amit Kesarwani <akesarwani@kabbage.com> 2:04 AM
Just wanty to push it to SBA
A Amit Kesarwani <akesarwani@kabbage.com> 2:04 AM
just 36 hours or 48 hours left
A Amit Kesarwani <akesarwani@kabbage.com> 2:05 AM
SBA reulation is also the same.. Due diligence can be done later too
s Siddharth Shah <sshah@kabbage.com> 2:06 AM
ok its done
A00275
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 79 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 2:36 AM
Thanks
A Amit Kesarwani <akesarwani@kabbage.com> 3:08 AM
Hey, do we need to Check TLO if someone fail just KYC?
s Siddharth Shah <sshah@kabbage.com> 4:47 AM
yes, we need to verify the risk indicators we got for KYC
A Amit Kesarwani <akesarwani@kabbage.com> 5:14 AM
I pushed Mukesh to increase output
A Amit Kesarwani <akesarwani@kabbage.com> 5:14 AM
Please try similar message in your talk
A Amit Kesarwani <akesarwani@kabbage.com> 3:10 PM
Make sure, this woman is not stopped
A Amit Kesarwani <akesarwani@kabbage.com> 3:10 PM
in KYC/KYB bug queue
s Siddharth Shah <sshah@kabbage.com> 3:10 PM
which woman
A Amit Kesarwani <akesarwani@kabbage.com> 3:10 PM
the case we looked yesterday night
s Siddharth Shah <sshah@kabbage.com> 3:11 PM
do you have the guid
A Amit Kesarwani <akesarwani@kabbage.com> 3:11 PM
yes
A Amit Kesarwani <akesarwani@kabbage.com> 3:11 PM
1 min plz
s Siddharth Shah <sshah@kabbage.com> 3:12 PM
found it
A Amit Kesarwani <akesarwani@kabbage.com> 3:12 PM
cool
s Siddharth Shah <sshah@kabbage.com> 3:13 PM
they are not on the list to flag and review right now
s Siddharth Shah <sshah@kabbage.com> 3:14 PM
probably cuz they never got to ready to send to sba stage
s Siddharth Shah <sshah@kabbage.com> 3:14 PM
it was a new app
s Siddharth Shah <sshah@kabbage.com> 3:14 PM
but i will try and remember that
A00276
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 80 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 3:14 PM
thanks
A Amit Kesarwani <akesarwani@kabbage.com> 3:18 PM
put in the code. userid not in
A Amit Kesarwani <akesarwani@kabbage.com> 4:17 PM
Hey
KP is asking- can we force that doc request to her?
A Amit Kesarwani <akesarwani@kabbage.com> 4:17 PM
Is it doable
s Siddharth Shah <sshah@kabbage.com> 4:18 PM
I already did it yesterday
A Amit Kesarwani <akesarwani@kabbage.com> 4:18 PM
Her meaning to KP
A Amit Kesarwani <akesarwani@kabbage.com> 4:18 PM
she want that doc request
s Siddharth Shah <sshah@kabbage.com> 4:19 PM
Don't get the question
A Amit Kesarwani <akesarwani@kabbage.com> 4:19 PM
Can you force that doc request for me?
[12:13 PM] Thank you
A Amit Kesarwani <akesarwani@kabbage.com> 4:19 PM
Thats the question
s Siddharth Shah <sshah@kabbage.com> 4:20 PM
It's already forced
A Amit Kesarwani <akesarwani@kabbage.com> 4:22 PM
I mean can it be sent to some other email id
A Amit Kesarwani <akesarwani@kabbage.com> 4:22 PM
for that account
s Siddharth Shah <sshah@kabbage.com> 4:28 PM
will call you back
s Siddharth Shah <sshah@kabbage.com> 4:28 PM
give me 5 minutes
A Amit Kesarwani <akesarwani@kabbage.com> 4:28 PM
no worries
A Amit Kesarwani <akesarwani@kabbage.com> 4:55 PM
need 2 mins
A Amit Kesarwani <akesarwani@kabbage.com> 4:55 PM
For Line increase manual review
A00277
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 81 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 4:55 PM
Do we calculate eligibility and line manually?
A Amit Kesarwani <akesarwani@kabbage.com> 4:56 PM
for cases where channel is not connected and bank account review is needed
s Siddharth Shah <sshah@kabbage.com> 5:06 PM
yes, but with guardrails and multipliers given
A Amit Kesarwani <akesarwani@kabbage.com> 7:48 PM
Fraud rings are first or 2nd party
A Amit Kesarwani <akesarwani@kabbage.com> 7:48 PM
?
s Siddharth Shah <sshah@kabbage.com> 7:48 PM
usually third party
s Siddharth Shah <sshah@kabbage.com> 7:48 PM
id theft related
s Siddharth Shah <sshah@kabbage.com> 7:49 PM
someone gets hold of a bunch of ids and keeps creating apps for them
A Amit Kesarwani <akesarwani@kabbage.com> 7:49 PM
give me a first and 2nd party fraud at kabbage
A Amit Kesarwani <akesarwani@kabbage.com> 7:49 PM
examples*
A Amit Kesarwani <akesarwani@kabbage.com> 7:49 PM
They will ask,
A Amit Kesarwani <akesarwani@kabbage.com> 7:49 PM
some example of first or 2nd
s Siddharth Shah <sshah@kabbage.com> 7:50 PM
first party - armenian fraud ring
s Siddharth Shah <sshah@kabbage.com> 7:50 PM
second party - can find some one off cases
A Amit Kesarwani <akesarwani@kabbage.com> 7:50 PM
then why 2nd party is similar percentage as first? Shouldn't 2nd party be small
s Siddharth Shah <sshah@kabbage.com> 7:51 PM
it is small right 60-30-10 was what i said..
A Amit Kesarwani <akesarwani@kabbage.com> 7:51 PM
30 is first or second
s Siddharth Shah <sshah@kabbage.com> 7:51 PM
30 is first
A00278
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 82 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 7:51 PM
got you
A Amit Kesarwani <akesarwani@kabbage.com> 7:52 PM
example of 3rd party ones
s Siddharth Shah <sshah@kabbage.com> 7:52 PM
paypal fraud ring
s Siddharth Shah <sshah@kabbage.com> 7:53 PM
stealing id to pass kyb/c, connecting paypal as default for disbursement and adding ynn/ynm account to get a line
s Siddharth Shah <sshah@kabbage.com> 7:53 PM
alibaba fraud as well
A Amit Kesarwani <akesarwani@kabbage.com> 7:57 PM
got you
s Siddharth Shah <sshah@kabbage.com> 7:57 PM
are they going to ask questions in this meeting
s Siddharth Shah <sshah@kabbage.com> 7:57 PM
to you
s Siddharth Shah <sshah@kabbage.com> 7:57 PM
on fraud
A Amit Kesarwani <akesarwani@kabbage.com> 7:58 PM
No
A Amit Kesarwani <akesarwani@kabbage.com> 7:58 PM
Don't know
A Amit Kesarwani <akesarwani@kabbage.com> 7:58 PM
First meeting is internal
A Amit Kesarwani <akesarwani@kabbage.com> 7:58 PM
Let see
A Amit Kesarwani <akesarwani@kabbage.com> 7:58 PM
They will send questions
A Amit Kesarwani <akesarwani@kabbage.com> 7:58 PM
we will respond in writeup
A Amit Kesarwani <akesarwani@kabbage.com> 7:58 PM
i guess
A Amit Kesarwani <akesarwani@kabbage.com> 7:58 PM
or call
A Amit Kesarwani <akesarwani@kabbage.com> 7:59 PM
By the way
A00279
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 83 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 7:59 PM
Lets PUt URS on 2-30 KYB tomorrow
s Siddharth Shah <sshah@kabbage.com> 7:59 PM
is urs team working over weekend
A Amit Kesarwani <akesarwani@kabbage.com> 7:59 PM
I want to see which is fast.. KYC or KYP
A Amit Kesarwani <akesarwani@kabbage.com> 7:59 PM
KYB*
A Amit Kesarwani <akesarwani@kabbage.com> 7:59 PM
I mean whenever they work again
s Siddharth Shah <sshah@kabbage.com> 8:00 PM
sunday night
s Siddharth Shah <sshah@kabbage.com> 8:00 PM
ok
A Amit Kesarwani <akesarwani@kabbage.com> 8:00 PM
I pushed them already on Volume
s Siddharth Shah <sshah@kabbage.com> 8:00 PM
can you also push lopapa and clint on getting them access to admin
s Siddharth Shah <sshah@kabbage.com> 8:00 PM
they are not able to change the id status on their end
s Siddharth Shah <sshah@kabbage.com> 8:00 PM
since that is only in admin
s Siddharth Shah <sshah@kabbage.com> 8:01 PM
we have to do it for the approved accounts
A Amit Kesarwani <akesarwani@kabbage.com> 8:01 PM
so, how are we changing to approved
s Siddharth Shah <sshah@kabbage.com> 8:01 PM
trey
s Siddharth Shah <sshah@kabbage.com> 8:01 PM
right now its ok since numbers are low
s Siddharth Shah <sshah@kabbage.com> 8:01 PM
but not possible with more numbers
s Siddharth Shah <sshah@kabbage.com> 8:02 PM
i have already pinged them
s Siddharth Shah <sshah@kabbage.com> 8:02 PM
clinUlopapa/dylan
A00280
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 84 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 8:17 PM
ok
A Amit Kesarwani <akesarwani@kabbage.com> 8:17 PM
i am on webex
s Siddharth Shah <sshah@kabbage.com> 8:39 PM
Fraud - Fraud verified and confirmed by Fraud
Pending Fraud- Fraud identified by colloction team and not confirmed by Fraud
Reversals or Hidden Fraud - Union cl network , reversal and hidden fraud;
Fraud netwm- Account connocted to verified fraud;
Reversal Fraud - ZPD accolJlts that rett.med ·unauthorized' reversal codes
Hidden Fraud - ZPD acccxmts that have multiple fraud triggers {>4);Verified
Image: image.png (98 KB)
s Siddharth Shah <sshah@kabbage.com> 8:41 PM
<https://drive.google.com/drive/u/2/folders/1jVW5JO9cZ2xDcblMfEOaABfsLF3sZx2D>
s Siddharth Shah <sshah@kabbage.com> 8:42 PM
<https://docs.google.com/presentation/d/1KRxXphhFutz2vfTLZJymjgZaKUDOsu6s/edit?dls=true>
s Siddharth Shah <sshah@kabbage.com> 8:56 PM
R02
R03
R04
R05
RO?
ROB
R09
R10
R16
R20
R29
R73
s Siddharth Shah <sshah@kabbage.com> 8:59 PM
<https://www.vericheck.com/ach-return-codes/> Vericheck Inc: ACH Return Codes (R01 - R33) - NACHA ACH Return
Codes
s Siddharth Shah <sshah@kabbage.com> 8:59 PM
<https:/Id rive.google.com/ct rive/u/2/folders/1s-eajwQ4836Q4R9rS23OiDNbMTNrJOP>
A Amit Kesarwani <akesarwani@kabbage.com> 9:51 PM
Hey
What are 4 triggers
A Amit Kesarwani <akesarwani@kabbage.com> 9:51 PM
For identifying fraud
s Siddharth Shah <sshah@kabbage.com> 10:12 PM
just sent a reply
A Amit Kesarwani <akesarwani@kabbage.com> 10:12 PM
Thanks
A Amit Kesarwani <akesarwani@kabbage.com> 10:14 PM
sentilink and emailage will also be indicators ?
Correct
A00281
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 85 of 125
A Amit Kesarwani <akesarwani@kabbage.com> 10:14 PM
Triggers I mean
s Siddharth Shah <sshah@kabbage.com> 10:14 PM
that is what i thought
s Siddharth Shah <sshah@kabbage.com> 10:14 PM
but i didnt see them here
A Amit Kesarwani <akesarwani@kabbage.com> 10:15 PM
Okay
A Amit Kesarwani <akesarwani@kabbage.com> 10:15 PM
It should have been more impactful
A Amit Kesarwani <akesarwani@kabbage.com> 10:15 PM
If we add it, I guess
A Amit Kesarwani <akesarwani@kabbage.com> 10:16 PM
But good for now
A Amit Kesarwani <akesarwani@kabbage.com> 10:16 PM
Don't send anything
A Amit Kesarwani <akesarwani@kabbage.com> 10:16 PM
More
s Siddharth Shah <sshah@kabbage.com> 10:16 PM
ok
s Siddharth Shah <sshah@kabbage.com> 10:17 PM
need abhigyan for this lol
A Amit Kesarwani <akesarwani@kabbage.com> 10:17 PM
Claimed fraud is also not clear
A Amit Kesarwani <akesarwani@kabbage.com> 10:17 PM
We may get another question
s Siddharth Shah <sshah@kabbage.com> 10:19 PM
ok
A00282
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 86 of 125
EXHIBIT 28
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 87 of 125
From: Amit Kesarwani <akesarwani@kabbage.com>
Sent: Friday, May 22, 2020 10:57 AM
To: Joseph Sce
Cc: Scott Asher
Subject: Re: Request on flag clearing
Got it, Thanks. I will reach to Nan.
Sorry, I didn't know whom she reports to.
Regards,
Amit
On Fri, May 22, 2020 at 10:36 AM Joseph Sce <jsce@kabbage.com> wrote:
Good Morning Amit,
I took a look at this one and it was cleared by Alicia Caul. She is actually working for Nan on the
Document Review team. She is not in my group. You may want to reach out to Nan so she can share the
message with her group on clearing flags.
Joe
On Wed, May 20, 2020 at 3:55 PM Amit Kesarwani <akesarwani@kabbage.com> wrote:
Thanks Joseph.
ade49434-41f3-49be-9f52-1a478cd46110
On Wed, May 20, 2020 at 3:50 PM Joseph Sce <jsce@kabbage.com> wrote:
Amit,
Can you get me the GUID in question please so I can address the agent.
We stressed it with the team again today.
Joe
On Wed, May 20, 2020 at 12:49 PM Amit Kesarwani <akesarwani@kabbage.com> wrote:
We have one more case today where the Felony flag is removed by a customer-facing person. The
person who cleared it doesn't have any visibility in LexisNexis Background data or TLO, so not sure
why the flag was removed.
I think we should make clear policies around - who can clear flags and who can not. Otherwise,
someday we will end up in a difficult financial/legal situation. The team should understand that every
team is working toward a common goal of maximizing profit for Kabbage. So, if there is a flag on some
account, there must be some reason behind it.
I would appreciate your help in enforcing this policy on the ground.
1
A00283
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 88 of 125
A00284
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 89 of 125
Kabbage, Inc.
Amit Kesarwani
730 Peachtree St NE #1100
www.kabbage.com +1 669 262 8826
Atlanta, GA 30308
--
Kabbage, Inc.
Amit Kesarwani
730 Peachtree St NE #1100
www.kabbage.com +1 669 262 8826
Atlanta, GA 30308
--
Part of the Kabbage Team
www.kabbage.com
--
Kabbage, Inc.
Amit Kesarwani
730 Peachtree St NE #1100
www.kabbage.com +1 669 262 8826
Atlanta, GA 30308
--
Part of the Kabbage Team
www.kabbage.com
--
Kabbage, Inc.
Amit Kesarwani
730 Peachtree St NE #1100
www.kabbage.com +1 669 262 8826
Atlanta, GA 30308
3
A00285
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 90 of 125
EXHIBIT 29
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 91 of 125
Paycheck Protection Program OMB Control No.: 3245-0407
Borrower Application Form Revised June 2020 Expiration Date: 10/31/2020
(
Check One: Sole proprietor Partnership C-Corp S-Corp LLC DBA or Tradename if Applicable
Independent contractor Eligible self-employed individual
501(c)(3) nonprofit 501(c)(19) veterans organization
Tribal business (sec. 31(b)(2)(C) of Small Business Act) Other
Business Legal Name
Business Address Business TIN (EIN, SSN) Business Phone
( ) -
Primary Contact Email Address
Average Monthly Payroll: $ x 2.5 + EIDL, Net of $ Number of Employees:
Advance (if Applicable)
Equals Loan Request:
Purpose of the loan
(select more than one):
☐Payroll ☐Lease / Mortgage Interest ☐Utilities ☐Other (explain): __________________
Applicant Ownership
List all owners of 20% or more of the equity of the Applicant. Attach a separate sheet if necessary.
Owner Name Title Ownership % TIN (EIN, SSN) Address
If questions (1) or (2) below are answered “Yes,” the loan will not be approved.
Question Yes No
1. Is the Applicant or any owner of the Applicant presently suspended, debarred, proposed for debarment, declared ineligible,
voluntarily excluded from participation in this transaction by any Federal department or agency, or presently involved in any ☐ ☐
bankruptcy?
2. Has the Applicant, any owner of the Applicant, or any business owned or controlled by any of them, ever obtained a direct or ☐ ☐
guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted in the last 7 years and
caused a loss to the government?
3. Is the Applicant or any owner of the Applicant an owner of any other business, or have common management with any other ☐ ☐
business? If yes, list all such businesses and describe the relationship on a separate sheet identified as addendum A.
4. Has the Applicant received an SBA Economic Injury Disaster Loan between January 31, 2020 and April 3, 2020? If yes, ☐ ☐
provide details on a separate sheet identified as addendum B.
If questions (5) or (6) are answered “Yes,” the loan will not be approved.
Question Yes No
5. Is the Applicant (if an individual) or any individual owning 20% or more of the equity of the Applicant
subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges ☐ ☐
are brought in any jurisdiction, or presently incarcerated, or on probation or parole?
Initial here to confirm your response to question 5 →
6. Within the last 5 years, for any felony, has the Applicant (if an individual) or any owner of the Applicant 1)
been convicted; 2) pleaded guilty; 3) pleaded nolo contendere; or 4) been placed on any form of parole or ☐ ☐
probation (including probation before judgment)?
Initial here to confirm your response to question 6 →
7. Is the United States the principal place of residence for all employees of the Applicant included in the
Applicant’s payroll calculation above?
☐ ☐
8. Is the Applicant a franchise that is listed in the SBA’s Franchise Directory? ☐ ☐
1
A00286
SBA Form 2483 (06/20)
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 92 of 125
Paycheck Protection Program
Borrower Application Form Revised June 2020
By Signing Below, You Make the Following Representations, Authorizations, and Certifications
CERTIFICATIONS AND AUTHORIZATIONS
I certify that:
• I have read the statements included in this form, including the Statements Required by Law and Executive Orders, and I understand them.
• The Applicant is eligible to receive a loan under the rules in effect at the time this application is submitted that have been issued by the
Small Business Administration (SBA) implementing the Paycheck Protection Program under Division A, Title I of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act) (the Paycheck Protection Program Rule).
• The Applicant (1) is an independent contractor, eligible self-employed individual, or sole proprietor or (2) employs no more than the
greater of 500 or employees or, if applicable, the size standard in number of employees established by the SBA in 13 C.F.R. 121.201 for
the Applicant’s industry.
• I will comply, whenever applicable, with the civil rights and other limitations in this form.
• All SBA loan proceeds will be used only for business-related purposes as specified in the loan application and consistent with the Paycheck
Protection Program Rule.
• To the extent feasible, I will purchase only American-made equipment and products.
• The Applicant is not engaged in any activity that is illegal under federal, state or local law.
• Any loan received by the Applicant under Section 7(b)(2) of the Small Business Act between January 31, 2020 and April 3, 2020 was for
a purpose other than paying payroll costs and other allowable uses loans under the Paycheck Protection Program Rule.
For Applicants who are individuals: I authorize the SBA to request criminal record information about me from criminal justice agencies for the
purpose of determining my eligibility for programs authorized by the Small Business Act, as amended.
CERTIFICATIONS
The authorized representative of the Applicant must certify in good faith to all of the below by initialing next to each one:
The Applicant was in operation on February 15, 2020 and had employees for whom it paid salaries and payroll taxes or paid independent
contractors, as reported on Form(s) 1099-MISC.
Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.
The funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments,
as specified under the Paycheck Protection Program Rule; I understand that if the funds are knowingly used for unauthorized purposes,
the federal government may hold me legally liable, such as for charges of fraud.
The Applicant will provide to the Lender documentation verifying the number of full-time equivalent employees on the Applicant’s payroll
as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the
24-week period following this loan.
I understand that loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered
rent payments, and covered utilities, and not more than 40% of the forgiven amount may be for non-payroll costs.
During the period beginning on February 15, 2020 and ending on December 31, 2020, the Applicant has not and will not receive another
loan under the Paycheck Protection Program.
I further certify that the information provided in this application and the information provided in all supporting documents and forms is
true and accurate in all material respects. I understand that knowingly making a false statement to obtain a guaranteed loan from SBA is
punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to
$250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a
federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.
I acknowledge that the lender will confirm the eligible loan amount using required documents submitted. I understand, acknowledge and
agree that the Lender can share any tax information that I have provided with SBA’s authorized representatives, including authorized
representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA
reviews.
_________________________________________________________ ________________________
Signature of Authorized Representative of Applicant Date
Print Name Title
2
A00287
SBA Form 2483 (06/20)
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Paycheck Protection Program
Borrower Application Form Revised June 2020
Purpose of this form:
This form is to be completed by the authorized representative of the Applicant and submitted to your SBA Participating Lender. Submission of the
requested information is required to make a determination regarding eligibility for financial assistance. Failure to submit the information would affect
that determination.
Instructions for completing this form:
With respect to “purpose of the loan,” payroll costs consist of compensation to employees (whose principal place of residence is the United States) in
the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence
of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for
separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and
retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wage,
commissions, income, or net earnings from self-employment or similar compensation.
For purposes of calculating “Average Monthly Payroll,” most Applicants will use the average monthly payroll for 2019, excluding costs over $100,000
on an annualized basis for each employee. For seasonal businesses, the Applicant may elect to instead use average monthly payroll for the time period
between February 15, 2019 and June 30, 2019 or any 12-week period between May 1, 2019 and September 15, 2019, excluding costs over $100,000
on an annualized basis for each employee. For new businesses, average monthly payroll may be calculated using the time period from January 1, 2020
to February 29, 2020, excluding costs over $100,000 on an annualized basis for each employee.
If Applicant is refinancing an Economic Injury Disaster Loan (EIDL): Add the outstanding amount of an EIDL made between January 31, 2020 and
April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan, to Loan Request as indicated on the form.
All parties listed below are considered owners of the Applicant as defined in 13 CFR § 120.10, as well as “principals”:
• For a sole proprietorship, the sole proprietor;
• For a partnership, all general partners, and all limited partners owning 20% or more of the equity of the firm;
• For a corporation, all owners of 20% or more of the corporation;
• For limited liability companies, all members owning 20% or more of the company; and
• Any Trustor (if the Applicant is owned by a trust).
Paperwork Reduction Act – You are not required to respond to this collection of information unless it displays a currently valid OMB Control
Number. The estimated time for completing this application, including gathering data needed, is 8 minutes. Comments about this time or the information
requested should be sent to: Small Business Administration, Director, Records Management Division, 409 3rd St., SW, Washington DC 20416, and/or
SBA Desk Officer, Office of Management and Budget, New Executive Office Building, Washington DC 20503. PLEASE DO NOT SEND FORMS
TO THESE ADDRESSES.
Privacy Act (5 U.S.C. 552a) – Under the provisions of the Privacy Act, you are not required to provide your social security number. Failure to provide
your social security number may not affect any right, benefit or privilege to which you are entitled. (But see Debt Collection Notice regarding taxpayer
identification number below.) Disclosures of name and other personal identifiers are required to provide SBA with sufficient information to make a
character determination. When evaluating character, SBA considers the person’s integrity, candor, and disposition toward criminal actions.
Additionally, SBA is specifically authorized to verify your criminal history, or lack thereof, pursuant to section 7(a)(1)(B), 15 USC Section 636(a)(1)(B)
of the Small Business Act (the Act).
Disclosure of Information – Requests for information about another party may be denied unless SBA has the written permission of the individual to
release the information to the requestor or unless the information is subject to disclosure under the Freedom of Information Act. The Privacy Act
authorizes SBA to make certain “routine uses” of information protected by that Act. One such routine use is the disclosure of information maintained
in SBA’s system of records when this information indicates a violation or potential violation of law, whether civil, criminal, or administrative in nature.
Specifically, SBA may refer the information to the appropriate agency, whether Federal, State, local or foreign, charged with responsibility for, or
otherwise involved in investigation, prosecution, enforcement or prevention of such violations. Another routine use is disclosure to other Federal
agencies conducting background checks but only to the extent the information is relevant to the requesting agencies' function. See, 74 F.R. 14890
(2009), and as amended from time to time for additional background and other routine uses. In addition, the CARES Act, requires SBA to register
every loan made under the Paycheck Protection Act using the Taxpayer Identification Number (TIN) assigned to the borrower.
Debt Collection Act of 1982, Deficit Reduction Act of 1984 (31 U.S.C. 3701 et seq. and other titles) – SBA must obtain your taxpayer identification
number when you apply for a loan. If you receive a loan, and do not make payments as they come due, SBA may: (1) report the status of your loan(s)
to credit bureaus, (2) hire a collection agency to collect your loan, (3) offset your income tax refund or other amounts due to you from the Federal
Government, (4) suspend or debar you or your company from doing business with the Federal Government, (5) refer your loan to the Department of
Justice, or (6) foreclose on collateral or take other action permitted in the loan instruments.
3
A00288
SBA Form 2483 (06/20)
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Paycheck Protection Program
Borrower Application Form Revised June 2020
Right to Financial Privacy Act of 1978 (12 U.S.C. 3401) – The Right to Financial Privacy Act of 1978, grants SBA access rights to financial records
held by financial institutions that are or have been doing business with you or your business including any financial institutions participating in a loan
or loan guaranty. SBA is only required provide a certificate of its compliance with the Act to a financial institution in connection with its first request
for access to your financial records. SBA's access rights continue for the term of any approved loan guaranty agreement. SBA is also authorized to
transfer to another Government authority any financial records concerning an approved loan or loan guarantee, as necessary to process, service or
foreclose on a loan guaranty or collect on a defaulted loan guaranty.
Freedom of Information Act (5 U.S.C. 552) – Subject to certain exceptions, SBA must supply information reflected in agency files and records to a
person requesting it. Information about approved loans that will be automatically released includes, among other things, statistics on our loan programs
(individual borrowers are not identified in the statistics) and other information such as the names of the borrowers (and their officers, directors,
stockholders or partners), the collateral pledged to secure the loan, the amount of the loan, its purpose in general terms and the maturity. Proprietary
data on a borrower would not routinely be made available to third parties. All requests under this Act are to be addressed to the nearest SBA office and
be identified as a Freedom of Information request.
Occupational Safety and Health Act (15 U.S.C. 651 et seq.) – The Occupational Safety and Health Administration (OSHA) can require businesses
to modify facilities and procedures to protect employees. Businesses that do not comply may be fined, forced to cease operations, or prevented from
starting operations. Signing this form is certification that the applicant, to the best of its knowledge, is in compliance with the applicable OSHA
requirements, and will remain in compliance during the life of the loan.
Civil Rights (13 C.F.R. 112, 113, 117) – All businesses receiving SBA financial assistance must agree not to discriminate in any business practice,
including employment practices and services to the public on the basis of categories cited in 13 C.F.R., Parts 112, 113, and 117 of SBA Regulations.
All borrowers must display the "Equal Employment Opportunity Poster" prescribed by SBA.
Equal Credit Opportunity Act (15 U.S.C. 1691) – Creditors are prohibited from discriminating against credit applicants on the basis of race, color,
religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into a binding contract); because all or part of the
applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer
Credit Protection Act.
Debarment and Suspension Executive Order 12549; (2 CFR Part 180 and Part 2700) – By submitting this loan application, you certify that neither
the Applicant or any owner of the Applicant have within the past three years been: (a) debarred, suspended, declared ineligible or voluntarily excluded
from participation in a transaction by any Federal Agency; (b) formally proposed for debarment, with a final determination still pending; (c) indicted,
convicted, or had a civil judgment rendered against you for any of the offenses listed in the regulations or (d) delinquent on any amounts owed to the
U.S. Government or its instrumentalities as of the date of execution of this certification.
4
A00289
SBA Form 2483 (06/20)
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EXHIBIT 30
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A00290
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 97 of 125
Report Limitations
General Limitations
The information contained herein has been prepared by Alvarez & Marsal Disputes and Investigations, LLC (A&M) and is based upon financial, regulatory,
and other data provided by management and staff of the Company, including access to source systems, and other sources deemed reliable by A&M. A&M
further relied upon the assurance of management of the Company that they were unaware of any facts that would make the information provided by them to
A&M incomplete or misleading. A&M has not subjected the information contained herein to an audit in accordance with Generally Accepted Auditing or
Attestation Standards or the Statement on Standards for Prospective Financial Information issued by the AICPA. Accordingly, A&M cannot express an opinion
or any other form of assurance on, and assumes no responsibility for, the accuracy or correctness of the historical information, system data, or the
completeness and achievability of the projected financial data, information, and assessments upon which the enclosed report (the "Report") is presented.
PPP Limitations
Due to the timing of this independent assessment in relation to the release of rules and guidance for the Paycheck Protection Program (PPP), A&M's
assessment does not consider or incorporate risk relating to the loan forgiveness phase. While the loan forgiveness phase is an integral part of the program
and likely includes unique inherent risks faced by Kabbage, the incomplete guidance at the time of the beginning of this assessment prevented A&M from
both assessing the guidance as well as any Kabbage policies or procedures in relation to the guidance. As such, A&M does not offer in this report any
observations or opinions relating to this phase of the PPP and recommends Kabbage perform additional testing on this phase once the SBA guidance and
Kabbage policies and procedures are finalized.
Kabbage I June 05, 2020 1 ALVAREZ & MARSAL
A00291
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 98 of 125
Executive Summary
Pursuant to an engagement letter dated May 8th, 2020, between Kabbage, Inc. (Kabbage) and A&M Disputes and Investigations, A&M performed an
independent risk assessment and targeted testing of Kabbage's Paycheck Protection Program (PPP). The covered period for this assessment was from initial
product launch through May 20th, 2020.
The independent risk assessment and testing was performed through telephonic interviews of relevant Kabbage personnel, an assessment of relevant
compliance and operational documentation, and a high-level review of certain controls in place with relation to the PPP. See Appendices A and B of this
report for a list of documents assessed and personnel interviewed, respectively.
Overall, A&M observed a PPP compliance program that generally appears to be consistent with the SBA's PPP Interim Final Rules guidance and applicable
BSA/AML and OFAC requirements and our understanding of regulatory expectations. We also observed that Kabbage is currently in the midst of enhancing
controls and making key operational changes to comply with evolving SBA PPP guidance changes.
Through A&M's targeted independent assessment and testing, relevant risks and controls were identified. Kabbage should leverage the risk and control
matrix provided to address high risk areas with control enhancements. In addition, as rule changes are issued, and other key risks are identified internally,
Kabbage should update the risk and control matrix to account for such changes (e.g., loan forgiveness interim final rule guidance). The risk and control matrix
should be a tool used by Kabbage that is constantly evolving.
In conclusion of the risk assessment and testing, A&M identified areas of improvement to strengthen compliance and operational processes and noted them
in the recommendations sections of the Risk and Control Matrix and Independent Testing.
Kabbage I June 05, 2020 2 ALVAREZ & MARSAL
A00292
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A00293
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Scope and A&M Approach
Scope A&M Approach
■ A&M Shall provide the following services to the ■ A&M will accomplish the services listed in the scope
Company: section through the following:
— (1) Conduct an independent risk assessment on — (1) Document review (policies, procedures,
the Payment Protection Program (PPP) loans; previous assessments, previous exams,
organizational charts, and other relevant
— (2) Provide a risk assessment report, including
information);
recommendations to mitigate identified risks;
(2) Telephonic interviews;
— (3) Review of applicable policies and procedures;
— (3) Observation and review of processes
— (4) Review existing red flags, and recommend
(customer onboarding, CDD/EDD, transaction
additional red flags as necessary that indicate
monitoring, PEP & Sanctions screening,
potentially suspicious activity, specifically as they
suspicious activity reporting, risk modeling, and
relate to fraud;
investigations);
— (5) Independent testing and report of the
(4) Discussion with senior compliance staff
program/processes, including recommendations
to address findings; and
— (6) Such other services as may be agreed to by
A&M and the Company.
Kabbage I June 05, 2020 4 ALVAREZ & MARSAL
A00294
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A00295
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 102 of 125
Risk Assessment Methodology
Framework for Measuring Residual Risk Inherent Risk & QRM A&M Risk Ratings and Kabbage Updates
This risk assessment is designed to assist A&M prepared this assessment based on A&M's risk ratings are based on A&M's
management in evaluating compliance and Interim Final Rule guidance from the Small independent observations of Kabbage's PPP
operational risks related to Paycheck Business Administration (SBA). A&M held compliance program and leverage policies,
Protection Program (PPP). A&M took existing discussions with members from Kabbage's procedures, sample documentation,
policies, procedures and identified internal compliance, risk and business teams on May interviews, and other communication with key
controls into consideration in the evaluation of 29th, 2020 and June 1st, 2020, PPP personnel.
residual risk for Kabbage. Residual risk is a telephonically to discuss the PPP product
offering. Kabbage should adjust any risk ratings
function of two separate components: (i) the
provided in the Risk and Control Matrix to
institution's inherent risk and (ii) the institution's We identified inherent risk factors that drive reflect changes in risk and thus treat the
Quality of Risk Management (QRM). Kabbage's PPP risk. Inherent risk is Matrix as a living document. Additionally, any
Inherent risk is a measure of the risk created expressed as a risk consideration (Low, incomplete sections of the Risk and Control
by a particular institution-wide characteristic or Moderate and High) and reflects the extent matrix should be completed to finalize the
products assuming that the institution has no to which that particular inherent risk factor initial draft of the matrix.
controls in place to manage that risk. QRM is a drives the overall inherent risk.
As such, Kabbage should update the risk and
measure of the controls in place at a particular We also identified QRM categories that control matrix when one of the following
institution to control its overall inherent risk. To mitigate Kabbage's inherent risk. QRM is events occur:
appropriately understand residual risk, it is expressed as a risk consideration (Strong,
necessary to understand both inherent risk and ■ Updates to SBA PPP regulatory guidance
Satisfactory and Needs Improvement) and
QRM. For example, an institution with high reflects Kabbage's overall risk mitigation in ■ Identification of additional risk factors
inherent risk may nevertheless have low or relation to the PPP product. internally
moderate residual risk if the institution has
strong QRM. ■ Updates to any operational/compliance
processes
Kabbage I June 05, 2020 6 ALVAREZ & MARSAL
A00296
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 103 of 125
Risk Considerations —Residual Risk
A product or process where internal controls and risk management systems mitigate substantially all of the inherent risk. Management proactively identifies and
controls regulatory and operational risks undertaken by the institution and responds promptly to changes in the institution's risk profile. Internal controls and risk
management systems are commensurate with the magnitude and complexity of the product or process. Incidents and exceptions are not expected to occur and
if they did occur would not be material or part of a pattern. No impact to Kabbage's earnings or capital is likely. Management reports and information systems
are appropriate to keep management and the Board informed of Kabbage's risk profile.
A product or process where internal controls and risk management systems manage most of the inherent risk, but a significant portion of risk is not controlled.
Management identifies regulatory and operational risk and responds to changing conditions, but gaps are present. Internal controls and risk management
Moderate systems are not fully commensurate with the magnitude and complexity of the product or process. Incidents and exceptions may occur from time to time and
they could be material or part of a pattern. A material impact to Kabbage's earnings and capital could occur. Management reports and information systems are
not adequate to keep management and the Board informed of Kabbage's risk profile.
A product or process where internal controls and risk management systems manage little or none of the inherent risk and large gaps exist. Management may
identify regulatory and operational risk, but response to changing conditions is inadequate. Internal controls and risk management systems are not
commensurate with the magnitude and complexity of the product or process. Incidents and exceptions do occur regularly and they are material or part of a
pattern. A material impact to Kabbage's earnings and capital has occurred or is imminent. Management reports and information systems are not present or are
not adequate to keep management and the Board informed of Kabbage's risk profile.
ALVAREZ & MARSAL
A00297
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Risk Considerations —Inherent Risk
The volume, size, or nature of the product or process is such that in the absence of functional controls, losses or violations of law or regulation would have little
negative impact on Kabbage's earnings and capital.
The volume, size or nature of the product or process is such that in the absence of functional controls losses or violations of law and regulation would have a
Moderate material effect on Kabbage's earnings and capital.
The volume, size, or nature of the product or process is such that in the absence of functional controls losses or violations of law and regulation would have a
material impact on Kabbage's earnings and capital. A critical inherent risk also implies that absent functional controls losses or violations have occurred or are
imminent.
Inherent risk is often described as a pure state where no controls whatsoever exist. In practice this pure state never exists and the concept proves to be an impediment to fully appreciating risk management
methodology. We use the term 'functional controls' here to acknowledge that some form of structure probably exists, but is not targeted to the specific risk; in other words does not functionally control the specific
risk. Inherent risk establishes a practical starting point for application of controls and risk management systems, which will function to mitigate inherent risk to a level that is within Kabbage's risk appetite.
I
Kabbage June 05, 2020 8 ALVAREZ & MARSAL
A00298
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Risk Considerations —Quality of Risk Management
Kabbage's risk management systems fully identify and appropriately control all risks posed by the product or process. The risk management framework as
applied to the product or process contains all required elements, including board and executive management participation, established risk appetite, risk
assessment, policies and procedures, reporting, testing and monitoring, audit, appropriate risk management and reporting systems. Losses, exceptions, and
violations of law or regulation are rare and not material to Kabbage's earnings and capital.
The Kabbage's risk management systems identify and appropriately control most risks posed by the product or process, but some gaps may exist. The risk
management framework as applied to the product or process contains most required elements, including board and executive management participation,
established risk appetite, risk assessment, policies and procedures, reporting, testing and monitoring, audit, appropriate risk management and reporting systems.
Sat. facto Some of the elements of the risk management framework may not be fully developed or gaps may exist. These may increase the residual risk level, but do not
result in an unacceptable residual risk. Losses, exceptions, and violations of law or regulation may be expected on a regular basis, but they are not material to
Kabbage's earnings and capital.
The Kabbage's risk management systems do not identify and appropriately control significant risks posed by the product or process; substantial gaps exist. The
risk management framework as applied to the product or process may be lacking minimum required elements such as policies and procedures, testing and
_ monitoring, or reporting and risk management systems. Board and executive management participation may be insufficient. There may be gaps or deficiencies
e 1111] '11.111 11 in the framework and these may point to an overall deficiency in the framework itself. Risk management does not minimally control the risk of the product or
process and residual risk is outside risk appetite. Losses, exceptions, and violations of law or regulation have occurred or are imminent and either have or
predictably will result in material harm to Kabbage's earnings and capital.
Kabbage I June 05, 2020 9 ALVAREZ & MARSAL
A00299
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Residual Risk Rating Mapping
I
Kabbage June 05, 2020 10 ALVAREZ & MARSAL
A00300
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Risk & Control Matrix
Inherent Residual
Control
Control Ref Title Risk Risk Control(s) QRM Rating Risk Recommendation
Rating Rating
PPP I Regulatory Kabbage does not identify • Kabbage has personnel dedicated to monitoring SBA PPP Moderate 1) Kabbage should consider
regulatory updates updates and communicating questions and concerns as they updating its PPP program manual
arise. The following Kabbage personnel are listed as authorizing to include the roles and
officials with the SBA for Kabbage: responsibilities of Kabbage
personnel. The roles and
1) Spencer Robinson (Head of Strategy) - official contact for E- responsibilities should include who
trans is responsible for SBA
2) Azba Habib (BSA/AML Officer) - official contact for regulatory communication and
compliance tracking regulatory updates.
In addition, Sam Taussig (Head of Policy) has direct access to the 2) Given the departure of
SBA's department head. Kabbage's BSA/AML Officer, Azba
Habib, as of June 6, 2020,
Kabbage should consider updating
any contact information with the
SBA to that of the interim or new
BSA/AML Officer.
PPP 2 Regulatory Management does not provide Kabbage communicates regulatory updates relevant to the Satisfactory fl 1 1) Kabbage should consider, when
relevant information pertaining to appropriate teams through the following methods: able, documenting in the PPP
PPP regulatory changes to the program manual regulatory and
review team 1) An email listsery for department heads other key changes to the PPP
2) Slack channels utilized by each PPP process team requirements, processes, and
procedures which are identified in
3) Daily morning meetings with department heads which dive into meetings, emails, and slack
granular issues channels.
4) Daily afternoon meetings with a larger audience which
discusses key themes and concerns which may need to be
discussed with the SBA. The larger audience at times may include
the following personnel: CEO, CCO, BSA/AML Officer,
Department Heads, and other personnel as warranted.
I
Kabbage June 05, 2020 11 ALVAREZ & MARSAL
A00301
Case 25-52372-CTG Doc 97-3 Filed 04/09/26 Page 108 of 125
Risk & Control Matrix
Inherent Residual
Control
Control Ref Risk Risk Control(s) QRM Rating Risk Recommendation
Title
Rating Rating
PPP 3 Staffing Kabbage does not maintain the Per conversation with Kabbage management, the Company Satisfactory 1) Kabbage should consider
appropriate staffing levels to appears to be staffed to handle the volume of applications and risk updating their PPP organizational
support the high volume and tickets that are being generated. chart to include application
time constraints related to PPP reviewers and risk analysts and
The risk group has —6 risk analysts and are able to close risk their direct reporting lines.
tickets between 1-10 days (including applicant response time).
Per Spencer Robinson, if volumes for applications or risk tickets
spike, they will engage consulting resources they leveraged in the
past to address staffing needs.
Additionally, Kabbage advised they are able to team resources
with financial institution partners such as Cross River and
Customers Banks.
PPP 4 Customer Kabbage does not have an Moderate Kabbage has a BSA/AML program in place that includes a Satisfactory Moderate 1) As of April 2020, Kabbage is still
Identification adequate BSA/AML program Customer Identification Program (CIP). More specifically, Kabbage refining its customer risk
Program that includes a CIP in place to has a KYC framework that provides for risk-based customer segmentation process for PPP
(CIP) identify PPP applicants, identification, verification, and due diligence. loans and expects this process will
resulting in potential fraudulent likely be different from the
loans. standard CRR. Once
implemented, Kabbage may want
to perform a risk-based review of
applicant loans.
PPP 5 KYC/CDD Kabbage does not have a Kabbage has BSA/AML and Fraud procedures for PPP loan Moderate N/A
process to adequately perform applications. Included in the procedures are processes for
customer due diligence on Kabbage to run OFAC and KYB/KYC Checks.
applicants and beneficial
owners. OFAC
Leverages a tool called GIACT, which provides results based on a
composite of sanctions lists.
KYC/KYB
Leverages LexisNexis & CLEAR to perform KYC/KYB verification
for the business applicant, the authorized representative, and any
owner with 20% or greater interest.
I
Kabbage June 05, 2020 12 ALVAREZ & MARSAL
A00302
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Risk & Control Matrix
Inherent Residual
Control
Control Ref Risk Risk Control(s) QRM Rating Risk Recommendation
Title
Rating Rating
PPP 6 Application Kabbage does not have an • Kabbage has a dedicated PPP loan application landing page. The N/A
Review adequate PPP customer landing page prompts questions to the applicant that answer the
application that captures all SBA loan application requirements (i.e., payroll requirements,
required borrower information relevant documents, corporate groups, and certifications).
in SBA Form 2483 and payroll Included in the landing page is a document upload prompt,
documentation whereby the applicant must upload the necessary documentation
needed to fulfill the application review.
PPP 7 Application Kabbage submits applicants for • Kabbage has a process in place to decline applicants based on Satisfactory • 1) Update procedures to reflect
Review PPP loan approval to the SBA the following knock-out rules: minimum timeframes and dates.
who do not meet the eligible (e.g., 5 years timeframe for felony)
borrower requirements 1) Authorized business representative and/or any of the owners
with 20% or greater interest in the Applicant is a non-U.S. citizen 2) Update procedures/manual to
include language from:
2) Applicants falls into an ineligible industry https://www.federalregister.gov/d/2
3) Applicant has >500 employees 020-08257/p-56 &
https://www.federalregister.gov/d/2
4) Applicant started operation after February 15, 2020 020-09098/p-26
5) Applicant is self-employed (sole-proprietorship or Single LLCs)
who started in 2020
6) Applicant has an Associate or an owner who is incarcerated, on
probation, on parole, or has been indicted for a felony or a crime of
moral turpitude
7) Applicant is currently involved in bankruptcy proceedings
PPP 8 Application Kabbage submits multiple PPP • As part of Kabbage's online application it requires the borrower to N/A
Review loan applications to the SBA for confirm they are not receiving an additional PPP loan. The
single entities language states the following:
"During the period beginning on February 15, 2020 and ending on
December 31, 2020, the applicant has not and will not receive
another loan under the Paycheck Protection Program".
In addition, per conversation with Amit Kesarwani, Kabbage runs a
query that compares the information from the new borrower
application to existing customer information. The query will flag
any applications with duplicate information.
I
Kabbage June 05, 2020 13 ALVAREZ & MARSAL
A00303
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Risk & Control Matrix
Inherent Residual
Control
Control Ref Risk Risk Control(s) QRM Rating Risk Recommendation
Title
Rating Rating
PPP 9 Application Applicants submit inaccurate, Moderate Kabbage has two types of application reviews (manual and N/A
Review insufficient, or fictitious automated). As part of the manual review process, Kabbage has
documentation procedures in place that detail step by step instructions on how to
review PPP loan applications. Included in the "PPP Document
Review Guide in Kore" procedures are sections that address:
1) Getting started with Kore
2) How to find documents and fill in the fields (i.e., W-3, W-2s, 940
tax form, verified government ID, etc.)
3) How to request a document in Kore
4) Where to see information about a customer's application?
5) Common errors and what they mean?
6) FAQ's
In addition to the "PPP Document Review Guide in Kore",
Kabbage has targeted procedures for specific customer types (i.e.,
General Partnerships, Seasonal Businesses, PEO's)
Per conversations with Kabbage Management, —75% of all PPP
application reviews are fully automated and run through straight
through processing leveraging OCR technology.
I
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Risk & Control Matrix
Inherent Residual
Control
Control Ref Title Risk Risk Control(s) QRM Rating Risk Recommendation
Rating Rating
PPP 10 Payroll Kabbage calculates PPP Kabbage has an Overview of Protection Program Calculations and Moderate 1) Update language regarding the
applicant payroll inaccurately Verification Procedure document which outlines: compensation of an individual
employee in excess of $100,000
1) The overarching process Kabbage follows to determine and per year.
verify loan amounts
2) Update Seasonal SMB section
2) Details regarding the data and calculations used to reflect 2019 and 2020 and not
3) The quality assurance/quality control (QA/QC) procedures that 3019 and 3030, respectively.
are in place
As part of the QA/QC Kabbage performs both a manual and
automated review.
Manual Review
QA/QC Procedures: When a Google Sheet has been completed,
a Kabbage employee (auditor) reperforms the review procedures
outlined above for 10% of the loan applications. If an error is
discovered, the auditor corrects the Google Sheet and reperforms
an additional judgmental sample size. Once the audit has been
completed, the Google Sheet is marked as complete. If an auditor
identifies a repetitive issue, they meet with the employee and
explain exactly what is being missed. Additional work is further
validated to ensure the training is successful.
Automated Review
Certain PPP loan applications can be processed in an automated
flow using optical character recognition (OCR). Today the OCR
capability is applicable to tax documents (940, 1099, W-3, etc.),
which have very standardized, machine-readable formats. To
perform verification, Kabbage performs several checks, which
involve a document validation and an extracted values process.
In addition, Kabbage maintains targeted procedures for
documentation issues and specific customer types (i.e., PEO's,
Seasonal Businesses, General Partnerships).
I
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Risk & Control Matrix
Inherent Residual
Control Ref Control Title Risk Risk Control(s) QRM Rating Risk Recommendation
Rating Rating
PPP 11 Regulatory Kabbage knew or should Kabbage performs fraud checks on applications through a process 1) Update "Overview of Paycheck
have known it was which utilizes the following tools: Protection Program BSA/AML
transmitting fraudulent Procedures" to require Fraud
information to the SBA 1) Emailage Review Team to clear an
2) Sentilink application's suspected fraud
flag(s) prior to submission to the
3) Threatmetrix SBA for loan approval. Current
procedure appears to allow for
The above tools produce a score for each application. If the score
application to proceed to the SBA
is high, an "SBA Failed Manual Verification" flag is created on the
prior to flag review.
account and remains until processed by the Fraud Review Team.
Funds for the application are not able to be disbursed until the flag
is cleared by the Fraud Team.
PPP 12 Loan Kabbage does not disburse Prior to loan disbursement the customer is provided a DocuSign Satisfactory 1) To ensure compliance with the
Disbursements loan funds within ten envelope for signature and asked 6 KBA questions. The customer disbursement of loan funds within
calendar days of loan must answer 4 of 6 KBA questions correct to move forward. If the ten calendar days of SBA loan
approval answers are correct, the customer signs and loan funds are approval, Kabbage should
disbursed within 10 calendar days from when the loan was consider updating their KBA failure
approved by the SBA (i.e., from when the guarantee number was procedures to detail the timeframe
issued by the SBA) . a KBA failure must be remediated.
In addition, Kabbage has a KBA Failure procedure for instances 2) Update BSA/AML and Fraud
where the borrower fails the KBA test. The applicant must call in to procedures to require Fraud
initiate the escalated review, and the frontline team will create a Review Team to clear a flag prior
salesforce ticket attached to the application. The account review to SBA approval of funds. This will
team will then review the ticket and relevant documentation to prevent previously unreviewed or
either clear the ticket or flag the applicant preventing them from unresolved flags from delaying
loan disbursement and a SAR may be filed. Kabbage's ability to disburse
loans.
PPP 13 Loan Kabbage does not submit Moderate Per conversation with the Kabbage team, the first SBA Form 1502 Satisfactory Moderate 1) Kabbage should create
Disbursements SBA Form 1502 indicating submission through E-trans was executed on 5/25/2020. The procedures detailing the PPP loan
that PPP loan funds have Kabbage team plans to upload a bulk SBA form 1502 on a weekly disbursement reporting
been disbursed in a timely basis, requirement, which include at a
manner minimum:
Roles and responsibilities
SBA Form 1502 requirements
I
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Risk & Control Matrix
Inherent Residual
Control Ref Control Title Risk Risk Control(s) QRM Rating Risk Recommendation
Rating Rating
PPP 14 Suspicious Kabbage does not have a Moderate Kabbage identifies suspicious activity at the time of onboarding Moderate 1) Kabbage should consider
Activity & process in place to identify and monitors for the same throughout the lifecycle of the creating SAR procedures that
Monitoring and report unusual activity. borrower. In the event suspicious activity is identified, Kabbage include escalation of suspicious
will refer (in the event a bank partner is the PPP lender) or report activity and how to complete a
(in the event Kabbage is the PPP lender) such activity to its bank SAR. Kabbage may want to
partner or the Financial Crimes Enforcement Network ("FinCEN"), consider creating a SAR narrative
respectively. template that incorporates
FinCEN's SAR Narrative Guidance
In addition, Kabbage leverages the following tools to identify ("who, what, where, when, why")
instances of fraud:
1) Sentilink (Daily Batch) - identifies instances of fabricated or
manipulated identifies.
2) Emailage (Daily Batch) - identifies emails associated with fraud
3) Threatmetrix (Sign-in Disbursement) - Identifies if applicant
device has been associated with multiple application or previously
identified fraudulent customers
4) TLO (Manual) - manual review tool that provides business,
personal, and social media records to validate
5) Inscribe (Manual) - identifies fraudulent documents
6) DocuSign KBA (Real-time) - Asks questions to authenticate
identity of signer
PPP 15 Suspicious Suspicious activity is not Moderate Kabbage leverages an excel workbook named Moderate 1) Kabbage should consider
Activity & tracked and monitored. "Fraud_suspect_list" to track suspicious activity and instances of creating a formalized suspicious
Monitoring fraud. The workbook includes the userid and business name of activity tracking document that
the accounts with suspicious activity. details at a minimum:
• Identification dates
• Reason for flagging
• Notes related to the
investigation of the potentially
suspicious activity
• If a SAR has been filed
SAR/No SAR decisioning
I
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Risk & Control Matrix
Inherent Residual
Control Ref Control Title Risk Risk Control(s) QRM Rating Risk Recommendation
Rating Rating
PPP 16 Data Retention Data provided by the Kabbage's enterprise-wide data retention policy is contained in "4 Satisfactory rn
i
1) Update Data Retention section
borrower related to loan - Kabbage Information Security Policy v1 (approved 2019-12-31)" (7.4) of Kabbage's Information
application, approval, and outlines the following: Security Policy document to
disbursement, or forgiveness require Kabbage retain PPP data
is not retained by Kabbage 1) Data Classification by level of sensitivity includes (from least to fora minimum of six years (as well
for a minimum of 6 years. most restrictive): Public Data, Confidential Data, and Restricted as the BSA/AML data for a
Data; minimum of five years from the
2) All data determined "critical to Company operations and/or date of last activity on the
team member job functions" must be backed up; account).
3) Network and data security processes; 2) Ensure PPP data is retained
onsite at Kabbage's principle place
4) Requirement of Restricted Data to be transferred via encrypted of business in Atlanta and able to
methods only; be compiled and supplied to the
SBA upon request within one
Additionally, Kabbage's "Enterprise BSA_AML and OFAC Policy
business day.
(AH Draft 4.27.20)(v2)" outlines the record retention and record
keeping policies relating to their BSA/AML requirements, which 3) A&M recommends clearly
include: classifying the following PPP
related data as either Restricted or
1) Retention of information related to BSA/AML requirements for a
Confidential Data in accordance
period of at least five years from the date of last activity on any
with Kabbage policies:
one Account;
documentation received from
2) A list of the related BSA/AML data types to be retained, borrowers, communications with
borrowers, internal assumptions or
decisions made by Kabbage
relating to a loan calculation or
forgiveness, and any other
relevant data related to loan
application, calculation, approval,
disbursement, forgiveness, and/or
repayment.
I
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Risk & Control Matrix
Inherent Residual
Control Ref Control Title Risk Risk Control(s) QRM Rating Risk Recommendation
Rating Rating
PPP 17 Internal Fraud Kabbage personnel do not Moderate Kabbage maintains Quality Assurance / Quality Control processes Satisfactory Moderate N/A
execute their responsibilities to combat the ability and effectiveness of internal fraud, including:
fully or with integrity
1) Application Review- Random selection by management of 3
tickets from each review team member's queue (weekly basis);
2) PPP payroll Calculation Review - Review of 10% of the manual
loan applications in each Google Sheet, and an automated
processing QA/QX which validates document types and extracted
values.
I
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Testing Methodology
Following completion of the Risk and Control Matrix, A&M utilized Kabbage's policy and procedure documentation to walk through a random sample of ten
(10) applications previously approved by Kabbage and the SBA for a PPP loan. The purpose of the testing was to track and provide Kabbage with
observations and recommendations which might assist in identifying areas of opportunity in the PPP loan program.
To begin testing, A&M utilized a random number generator to select ten (10) approved borrowers from a list of the 76,726 applicants Kabbage had approved
by the beginning of this assessment. Once selected, A&M requested the following categories of documentation from Kabbage for each of the 10 borrowers
(now samples):
1. KYC/KYB/OFAC Check documentation
2. Payroll/Loan Amount Verification documentation
3. Fraud Review documentation
4. Background Check documentation
5. KBA Check documentation
6. E-Tran approval date and number
7. Other relevant documentation that may relate to the loan application and approval process
Finally, the testing utilized A&M's knowledge of Kabbage's processes gained through generation of the Risk & Control Matrix as well as Kabbage's PPP
policies and procedures to analyze borrower documentation provided to the lender as part of the loan approval process. A&M's analysis concluded with the
generation of observations and recommendations intended to assist Kabbage in identifying areas of focus or opportunity for the PPP loan program. The
results and observations from sample testing are contained in the following slides.
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Independent Testing
KYC/KYB Testing Dashboard
Test Steps:
1 ✓ ✓ 1) Verify the customer has passed the BVI test in LexisNexis
(>=40).
2 ✓ ✓ 2) Verify the customer was screened and not a match in GIACT.
3 ✓ ✓
4 ✓ ✓
5 ✓ ✓
6 ✓ ✓
Observations/Recommendations:
7 01/R1 ✓
01/R1) Customer failed BVI check. A&M noted BSA/AML procedures
8 ,/ ,/ and/or the KYB/KYC Desktop Procedures should more clearly
account for process for EDD when BVI score in CLEAR is below 40.
9 ✓ ✓
10 ✓ ✓
✓ Test passed.
0 A&M observation noted.
R A&M recommendation.
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Independent Testing
Payroll/Loan Amount Verification Testing Dashboard
Test Steps:
1 1) Verify the customer has provided all required payroll
documentation.
2 01
3
4
5 02
6 02
Observations:
7 03
01) Missing the following documents: 2019 IRS Form 940; Payroll
Vt statement covering 2/15/2020.
02) Missing 2019 IRS Form 940.
9 04
03) A&M noted that the borrower did not provide IRS Form 940.
10 However, the borrower provided a paystub evidencing the year to date
federal and state withholding taxes.
*A&M did not perform a recalculation of Kabbage's payroll calculation.
04) W-3 form was not provided. However, the borrower uploaded
documentation evidencing total number of employees and detailed
payroll schedules.
✓ Test passed.
0 A&M observation noted.
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Independent Testing
Fraud Testing Dashboard
Test Steps:
1 1) Verify the customer passed the Emailage fraud check.
2) Verify the customer passed the Sentilink fraud check.
2
3) Verify the customer passed the Threatmetrix fraud check.
3
4
5
6
Observations:
7
A&M made no new observations for this section of the independent
testing.
9
10
✓ Test passed.
0 A&M observation noted.
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Independent Testing
KBA/E-Tran/DocuSign Testing Dashboard
Test Steps:
1 1) Verify Kabbage ran the customer against LexisNexis RiskScreen
01/R1
Background Check.
2 01/R1 2) Verify the application was successfully submitted through E-Tran.
3 3) Verify the applicant passed the KBA requirements.
O1/R
4) Verify the customer signed the DocuSign envelope.
4 O1/R
5 O1/R
6 O1/R
Observations:
7 O1/R
01/R1) Sample(s) appear to have triggered a manual background
O1/R review based on the "Note" in the Background Check CSV file
provided to A&M. A&M noted Kabbage does not have a clear
procedure for performing manual background checks when the
9 02
applicant fails the automated process.
10 02 02) Sample(s) provided to A&M do not appear to contain results of
any performed background checks.
✓ Test passed.
0 A&M observation noted.
R A&M recommendation.
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Appendix A: Documents Reviewed for Matrix
In generating the Risk & Control Matrix, A&M evaluated PPP lender risks against Kabbage's existing controls by reviewing the following Kabbage
documentation:
1 - Document Request List (5.19.20).docx 2 - PPP Data Acquisition and Storage.docx 17 - PPP - Doc Uploader Scripts .docx
1(a) - Kabbage - Enterprise BSA_AML and OFAC Policy (AH Draft 4 - KABBAGE INFORMATION SECURITY POLICY v1 (approved
18 - PPP - App Review Audit Process (as of 5.22.20).docx
4.27.20)(v2).docx 2019-12-31) copy.docx
1(b) - Kabbage - BSA_AML and Fraud Procedures for PPP (AH
6 - Listing of all applicants (1).csv 19 - General Partnerships Loan Calculation.docx
Draft 4.30.20) copy.docx
1(c) - Desktop Procedures - OFAC Screening (4_2020) copy.docx 7 -Listing of all approved applicants (1).csv 20 - Seasonal Training — Tis the season for seasonal.docx
1(d) - Desktop Procedures - KYB_KYC (4_2020) copy.docx 8 - Fraud_suspect_list.xlsx 21 - 4.25 Miscategorized PPP Apps.xlsx
1(e) - Desktop Procdures - Sentilink, Emailiage and Threatmetrix 13- Kabbage - 2017 BSA AML and OFAC Risk Assessment
22 - SUSPICIOUS PPP APPS (REVIEWERS).xlsx
(4_2020) copy.docx (FINAL)(March 2018).docx
13- Kabbage - 2018 BSA AML and OFAC Risk Assessment (FINAL 23 - 2018 Enterprise BSA_AML & OFAC RA Remediation Plan (as
1(g) - Desktop Procedures - KBA Failure copy.docx
7.19.19).docx of 5.29.30).xlsx
14 - Kabbage - 2019 BSA-AML-OFAC Audit Report_FINAL_2019-
1(h) - PPP Calculations and Verification.docx PPP - Compliance Review Assignment.xlsx
11-04.pdf
1(i) - Payroll Verification Document Mapping.docx 15- PPP - Document Review Guide + Kore - UX Update.docx
1(j)(k).pptx 16- PPP - Teach me how to PEO.docx
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Appendix B: Interviewed Personnel
In performing the independent risk assessment, A&M evaluated PPP lender risks against Kabbage's existing controls by interviewing the following Kabbage
personnel:
Kristel Adler PPP Business Owner
Nan Siler PPP Application Manual Review Process Lead
Azba Habib BSA/AML Compliance Lead for PPP
Spencer Robinson PPP Overall Risk & Strategy
Nipun Goel PPP Strategy Lead for Acceptable Documentation, Eligible Businesses, and Loan Calculations
Sam Taussig PPP Government Relations & Policy
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Alvarez & Marsal Holdings, LLC. All rights reserved. ALVAREZ & MARSAL®,
/41g ® and A&M® are trademarks of Alvarez & Marsal Holdings, LLC.
© Copyright 2020
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Cited in: Robert Frohwein