Reminder of Reporting and Repayment Obligations for Paycheck Protection Program Liquidity Facility (PPPLF) Participants that Have Received Loan Forgiveness Payments from the Small Business Administration (SBA)

October 29, 2020

As the SBA has begun making forgiveness payments on Paycheck Protection Program (PPP) loans, we would like to remind you of the requirements for reporting to your lending Reserve Bank any such payments that you have received on PPP loans that are pledged to the PPPLF.

The amount of a PPPLF advance cannot exceed the outstanding amount of the PPP loans pledged to secure the advance. Therefore, when participants in the PPPLF receive payments on PPP loans pledged as collateral for a PPPLF advance, they are required to report those amounts to the lending Reserve Bank. In particular, once a PPPLF participant receives its first forgiveness reimbursement payment from the SBA on any PPP loan pledged to the PPPLF, it must begin reporting to its lending Reserve Bank every two weeks (or more frequently, if requested by the lending Reserve Bank or if the participant wishes to report more frequently) all reductions of its pledged PPP loan pools, so that the amount of the advances can be reduced accordingly. These requirements, along with form instructions, are explained more fully in the Reporting Requirements for Paydowns of PPP Loans Documentation Guide (Off-site, PDF).

To report your first PPP loan forgiveness reimbursement payment, submit an Individual PPP Loan Reduction Report (Off-site, XLXS) (reduction report) for the affected PPPLF advance. When emailing this reduction report to the Reserve Bank, please include the phrase “Forgiveness payments” in the subject line. Once you have submitted your first reduction report to your lending Reserve Bank, the Reserve Bank will assign to you a schedule to submit bi-weekly reduction reports. The schedule will include a day of the week, a starting date and a time-of-day deadline.

You can find PPPLF reporting and repayment information, including the template for the reduction report and sample documents, on the PPPLF (Off-site) page of the Discount Window website. If you have any questions, please contact your lending Reserve Bank (Off-site).

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