How Credit Unions Can Become PPP Lenders

As a credit union, you know that our communities are built around the success of individuals and their small businesses. They need your help now more than ever in the face of the COVID-19 Pandemic. You can give them the safety net they need by becoming a Payroll Protection Program (PPP) Lender.

The first sum of PPP was dispensed within weeks of being signed. If you’re reading this, it’s because you missed the opportunity to help your members. The process to become a Credit union PPP lender was unclear and complicated during the first round of discernments. We’re here to help make it simple.


How to Become a PPP Lender

Maybe you’re not an official lender yet. Or maybe you already know you’re qualified, but couldn’t get through the application process in time. You’re not alone.

There are two steps to becoming a PPP lender with the Small Business Association (SBA).

  1. Ensure that your credit union meets the eligibility requirements
  2. Apply to be a PPP lender by sending SBA Form 3506 to

After you follow these steps,

Here are the requirements for eligibility to become a credit union PPP lender listed on the lender agreement:

  • You are federally insured
  • You are NOT designated in “Troubled Condition” by your primary federal regulator
  • You must NOT be subject to a formal enforcement action due to unsafe or unsound lending practices

That’s it! If you already meet these requirements, you’re approved to become a PPP lender! Just fill out the agreement (SBA Form 3506) and submit to


How Does it Work?

You’ll need to submit Form 2484 electronically with each borrower loan application.

The 30-day delay for loan disbursement has been lifted for the second round of PPP lending. So, once approved, your members should have access to their loans within 10 days. Further information about the SBA’s policies for accepting, distributing, and closing PPP loans can also be found on the agreement.

Helping small businesses to keep their employees on payroll assures that they won’t default on their existing business loans. Your members’ PPP loans are forgivable if 75% of the funds are used for payroll costs and they retain their employees.


What’s the Risk?

Our country’s unemployment rate has skyrocketed. PPP loans are the answer to closed businesses and economic disaster. In case you’re still not sure about being a participating lender, the SBA had this to say in the “PPP Interim Final Rule” statement:

“… loans are 100 percent guaranteed by the SBA and the fact that lenders will receive a substantial processing fee from the SBA provide ample inducement for lenders to participate in the PPP.”

If your members don’t have PPP loans available from your institution, they may begin to look elsewhere. Don’t miss the opportunity to protect your members’ livelihoods!


Necessary Documents and Additional Reading

Apply to become a PPP lender today with the SBA. Your members need your help to keep their families and customers provided for.

The PPP loan application and approval process can be slow. If you’d like to streamline your lending, you may consider partnering with a digital lending platform to help uncomplicate and expedite the loan process.

Know the steps to get your members the cash they need for their employees. Have the forms on hand so that you can be your community’s safety net as their credit union PPP Lender.

SBA PPP Rules and Regulations

PPP Lender Information Fact Sheet from the Treasury

PPP New Lender Application

PPP Lending Frequently Asked Questions

Would you like to get your PPP lending operational ASAP? Contact us to see how.

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