Cares Act Section 1102 Lender Agreement (Sba Form 3506)

All borrowers who do not meet any of the above criteria must use Form SBA 3508 (or the bank`s corresponding form). Yes, yes. For each PPP loan controlled by SBA, if the SBA finds, within one year of the PPP loan payment, that the borrower was ineligible, the SBA will request reimbursement of the processing fee by the bank that took out the PPP loan. However, the SBA`s finding of the borrower`s ineligibility does not affect the SBA`s guarantee of such a PPA loan when the bank has fulfilled its obligations, nor does it affect the retention and retention requirements described in the lender application form. None for existing customers of a bank. If the bank has pre-verified the necessary information, the bank is not obliged to re-examine the information. This also applies if the bank has not yet collected such information about the economic beneficiary through an existing customer (unless the bank`s BSA directive imposes something else). In addition, not-for-profit hospitals that are tax-exempt under Section 115 of the Internal Income Code are treated as a compliance with the definition of “non-profit organization” as defined in section 1102 of the CARES Act, where the hospital reasonably finds, in a written report managed by the hospital, that it is an organization described in Section 501 (c)3) of the internal income code and therefore falls into a category organizations that is exempt from tax under Section 501 (a) of the internal tax law. Turnover code. The hospital`s eligibility certificate on the borrower`s application form cannot be made without this finding.

Before entering into a transaction with a “change of ownership,” the PPP borrower must notify the bank in writing of the proposed transaction and provide the bank with a copy of the proposed agreements or other documents that would be at the end of the proposed transaction. If an applicant does not meet the terms of a P3 loan or if, if not, a bank is unable to process a loan in PPP, the bank must notify the applicant in writing as soon as possible in order to reduce the applicant`s potential reputational risks and legal rights. But for the largest borrowers, who were clearly eligible for PPPs – but at least for the vague certification of the need for credit – Form 3509 offers more questions than answers. Many will complain about the lack of an opportunity to determine the impact COVID-19 would have on the business at the time of the loan application. Although there were no necessary closures, no decrease in turnover and no impact on workers, this decision was impossible in March. Borrowers will also complain that at the time of the application, no formal line of guidance had been disturbed, that government officials insisted on the importance of participating in the PPP, and that it would have been contrary to their fiduciary obligations to the company not to apply for funds in the PPP. Still others will complain that the responses requested in Form 3509 are unnecessarily cumbersome and require additional professional advice, ignore subjective considerations made at the time of the credit application, impose potentially proprietary information on competitors, and mistakenly focus on retrograde objective criteria.