SBA, Extension and Revision of Guidance on Whole Loan Sales of Paycheck Protection Program Loans

Summary

An SBA Procedural Notice effective April 30, 2021 that extends and revises guidance on whole loan sales of Paycheck Protection Program loans. It says the guidance in SBA Procedural Notice 5000-20024 expires on May 1, 2021 and that the PPP is continuing. Lenders participating in PPP may sell all of their interest in PPP loans to other participating Lenders under 13 CFR § 120.432(a), and for PPP loans only SBA's prior written consent is not required. The originating Lender must immediately notify SBA's Office of Credit Risk Management of a sale. The signature block names Dianna L. Seaborn, Director, Office of Financial Assistance.

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                       SBA Procedural Notice

TO: All SBA Employees and Paycheck Protection                                        CONTROL NO.: 5000-809242
Program Lenders


SUBJECT: Extension and Revision of Guidance on                                       EFFECTIVE: April 30, 2021
Whole Loan Sales of Paycheck Protection Program
Loans



On May 1, 2020 SBA issued SBA Procedural Notice 5000-20024 to provide guidance to Lenders
approved to participate in the Paycheck Protection Program (“PPP”) regarding whole loan sales of
PPP loans. The guidance provided in SBA Procedural Notice 5000-20024 expires on May 1, 2021.
Because the PPP is continuing, the purpose of this notice is to extend the guidance on whole loan
sales as described and updated below. NOTE: This Procedural Notice applies to Lender merger and
acquisition transactions where the Lender has PPP loan(s) in its portfolio.1

Lenders participating in PPP may sell all of their interest in PPP loans to other participating Lenders
in accordance with 13 CFR § 120.432(a). For purposes of PPP loans only, SBA’s prior written
consent is not required. All PPP loans must be sold to Lenders that have a signed SBA Form 750,
SBA Form 750 CA, SBA Form 3506, or SBA Form 3507 (referred to individually as a “Loan
Guarantee Agreement”). The purchasing Lender must take possession of the note and the loan
documents and service the loan. The purchasing Lender, however, may elect to have the originating
Lender subservice the loan and hold the note and loan documents on behalf of the purchasing Lender.
The purchasing Lender acquires the PPP loan subject to SBA’s existing rights, including its right to
deny liability on its guarantee. The PPP loan will be purchased subject to the acquiring Lender’s
applicable Loan Guarantee Agreement.

The originating Lender must immediately provide SBA’s Office of Credit Risk Management with
notice of any PPP whole loan sale including the name of the purchasing Lender, the current mailing
address for both Lenders, identification of an Authorized Lender Official for both Lenders, and valid
email addresses for both Authorized Lender Officials. Additionally, the notice must include a PPP
loan list in an Excel format that contains the SBA loan number, borrower name, original loan
amount, current amount principal balance, and maturity date. The notice and required information
must be submitted to the following e-mail address: PPPLoanSales@sba.gov.


1
 Other SBA Loan Program Requirements not involving PPP may also apply to Lender merger and
acquisition transactions.
PAGE 1 of 2                                                                                  EXPIRES: 4-1-22
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58

                                     Federal Recycling Program   Printed on Recycled Paper
For purposes of PPP loans only, the originating Lender will be considered to meet the good standing
and satisfactory performance requirements of 13 CFR §120.433.

The purchasing Lender will be the party responsible to SBA with respect to all servicing actions,
including requests for loan forgiveness, and will be the party eligible for the guarantee purchase of a
PPP loan.

Please direct questions to Darrel Eddingfield at darrel.eddingfield@sba.gov or to
PPPLoanSales@sba.gov.



Dianna L. Seaborn
Director
Office of Financial Assistance




PAGE 2 of 2                                                                                  EXPIRES: 4-1-22
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58

                                     Federal Recycling Program   Printed on Recycled Paper


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