April 2, 2020

CARES Act Paycheck Protection Program: Lender Guidance

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Most people know the basics by now but here is a recap. Under Title I of the CARES Act, small businesses can get a loan from an SBA lender in the amount of 2.5 times their monthly payroll, up to $10MM, and the loan will be forgiven as long as it is used to pay employees or rent/ mortgage/ utilities.

From the lender side, here are the items we see as critical:

  1. Operational Efficiency– There is some money to be made here by the lenders but only if they can process the deluge of applications efficiently. CrossCountry is in the process of building an automation prototype that will allow the applications to be validated and processed with analytics being produced on the back end
  2. Fraud Controls – While the terms of the program loans seem relatively loose, lenders will want to make sure they have performed basic KYC and validated the documentation borrowers need to provide for loan forgiveness. CrossCountry is creating a controls and audit framework for this process.


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