On July 13, 2020, the U.S. Small Business Administration (SBA) released a procedural notice that further details the process for reporting fully disbursed Paycheck Protection Program (PPP) loans and collecting the related processing fee.
Under the initial instructions published May 21, 2020, lenders must submit Form 1502 data for all PPP loans by May 29, 2020, or 10 calendar days after the loan is disbursed or canceled, whichever is later. Monthly reporting is required for outstanding PPP loans (see BKD article “PPP Form 1502 Released for Lenders’ Fees & Reporting Requirements”).
This notice establishes the regular filing deadline for the monthly 1502 reports and provides a special grace period for the first report due in July. Lenders must submit monthly PPP 1502 reports on or before the 15th of each month, or if the 15th is not a business day, on the next business day after the 15th. The first monthly PPP 1502 report is due on or before July 15, 2020; however, lenders are permitted a two-day grace period to report for this month only.
Monthly Reporting Requirements
Lenders must provide monthly 1502 reports that include loan status information regardless of whether the borrower made a payment in the current month; all PPP loans are deferred for the first six months. Lenders must continue reporting on a loan until the lender notifies the SBA that the loan has been fully repaid.
After a loan forgiveness, if no loan balance remains, the lender must report the PPP loan as paid in full on the next Form 1502 report. If a loan balance remains after forgiveness, the lender must report the reduction in the loan balance for the forgiveness amount on the next SBA Form 1502 and must service the loan’s remaining balance in accordance with PPP requirements.
BKD will continue to follow this developing situation. As with most topics related to COVID-19, changes are being made rapidly. Please note that this information is current as of the date of publication. Visit BKD’s COVID-19 Resource Center to learn more. If you have questions about these changes, contact your BKD Trusted Advisor™ today.