SBA Procedural Notice: Guidance on Participation Sales for Paycheck Protection Program Loans (Control No. 5000-)
Summary
An SBA Procedural Notice to all SBA employees and PPP lenders, effective 4/24/2020 and expiring 4-1-2021, on the sale of participating interests in Paycheck Protection Program loans; its control number prints as 5000-XXXXX. Lenders may sell participating interests in PPP loans to other participating lenders under 13 CFR § 120.432(b), without SBA's prior written consent, for up to 100 percent of the principal balance. Buyers must have a signed SBA Form 750, SBA Form 3506 or SBA Form 3507. The originating lender keeps the note, the loan documents and all servicing rights, stays responsible to SBA for servicing, advance purchases and loan forgiveness, and must give SBA's Office of Credit Risk Management prior written notice of any sale. Dianna L. Seaborn, Director of the Office of Financial Assistance, signed it.
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Full text
SBA Procedural Notice
TO: All SBA Employees and PPP Lenders CONTROL NO.: 5000-XXXXX
SUBJECT: Guidance on Participation Sales for EFFECTIVE : 4/24/2020
Paycheck Protection Program Loans
The purpose of this Notice is to provide guidance to Lenders approved to participate in the
Paycheck Protection Program (“PPP”) regarding the sale of participating interests in PPP loans.
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.
If you have any questions, please contact John Wade, Chief of Secondary Markets at
john.wade@sba.gov.
Dianna L. Seaborn
Director
Office of Financial Assistance
PAGE 1 of 1 EXPIRES: 4-1-2021
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
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