How to Become a PPP Approved Lender With the SBA

Update 4/8/20: The PPP Lender Application for Non-banks/fintech Companies is HERE
Update 4/3/20: The PPP Lender Application for Banks is HERE

The Treasury Department has set an April 3rd expected start time for lenders to begin accepting Payroll Protection Program loan applications. But who exactly can make the loans? Are fintech lenders in or out?

According to the Treasury, the following are already approved:

• All existing SBA-certified lenders
• All federally insured depository institutions, federally insured credit unions, and Farm Credit System institutions

BUT! A broad set of additional lenders can begin making loans as soon as they are approved and enrolled in the program. This “broad set,” that presumably includes fintech lenders, can apply by emailing an application to DelegatedAuthority@sba.gov.

While the loans are 100% backed by the full faith and credit of the United States. Lenders will be compensated in accordance with the following structure, a percentage of the financing outstanding balance at the time of final disbursement:

• Loans $350,000 and under: 5.00%
• Loans greater than $350,000 to $2 million: 3.00%
• Loans greater than $2 million: 1.00%

Lenders may not collect any fees from the applicant.

Who can be an agent/broker?

• An attorney;
• An accountant;
• A consultant;
• Someone who prepares an applicant’s application for financial assistance and is employed and compensated by the applicant;
• Someone who assists a lender with originating, disbursing, servicing, liquidating, or litigating SBA loans;
• A loan broker; or
• Any other individual or entity representing an applicant by conducting business with the SBA

Agent fees will be paid out of lender fees. The lender will pay the agent. Agents may not collect any fees from the applicant. The fee structure is below:

• Loans $350,000 and under: 1.00%
• Loans greater than $350,000 to $2 million: 0.50%
• Loans greater than $2 million: 0.25%

Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.