New PPP IFR Creating COVID Revenue Reduction Score & Direct Borrower Forgiveness Process
Yesterday, the SBA announced the release of yet another PPP IFR – this IFR covers COVID Revenue Reduction Score, Direct Borrower Forgiveness Process, and Appeals Deferment. The IFR is designed to streamline the forgiveness process for PPP loans of $150,000 or less by (a) allowing lenders to use a COVID Revenue Reduction Score at the time of loan forgiveness to document the required revenue reduction for Second Draw PPP loans of $150,000 or less, and (b) establishing a direct borrower forgiveness process for lenders that choose to opt-in as an alternative method of processing loan forgiveness applications for PPP Loans of $150,000 or less. This IFR also extends the loan deferment period for those PPP loans where the borrower timely files an appeal of a final SBA loan review decision with the SBA Office of Hearings and Appeals.
The COVID Revenue Reduction Score was developed by an SBA third party contractor and is based on a variety of inputs, including industry, geography, and business size. Each Second Draw PPP Loan of $150,000 or less will be assigned a Score in the SBA’s Paycheck Protection Platform, and this Score will be visible to lenders to use on an optional basis as an alternative to document revenue reduction. The SBA will be providing additional guidance regarding the procedures for lenders and borrowers to use the Score.
Yesterday’s IFR also creates a direct borrower forgiveness process for borrowers with loans of $150,000 or less. Lenders must opt-in to the direct borrower forgiveness process, and once they do, the Paycheck Protection Platform will provide a single secure location for borrowers to apply for loan forgiveness through the Platform using the electronic equivalent of SBA Form 3508S. Upon receipt of notice that a borrower has applied for forgiveness through the Platform, lenders will review the loan forgiveness application and issue a forgiveness decision to SBA, all within the Platform. The SBA will be providing additional guidance regarding the direct borrower forgiveness process. The new forgiveness platform will begin accepting applications from borrowers on August 4, 2021.
Read the COVID Revenue Reduction Score, Direct Borrower Forgiveness Score, and Appeals Deferment IFR HERE.