PAGE 1 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

SBA Procedural Notice

TO: All SBA Employees and Paycheck 

Protection Program Lenders

SUBJECT: Revised SBA Paycheck Protection 

Platform Procedures for Addressing Hold Codes on 

First Draw PPP Loans and Compliance Check Error

Messages on First Draw PPP Loans and Second 

Draw PPP Loans

CONTROL NO.: 5000-20092

EFFECTIVE: February 10, 2021

This Notice revises the guidance provided in SBA Procedural Notice 5000-20083, SBA 

Paycheck Protection Platform Procedures for Addressing Unresolved Issues on Borrower First 

Draw PPP Loans, effective January 26, 2021. The purpose of this updated Notice is to inform 

SBA employees and Lenders of new SBA Paycheck Protection Platform (platform) procedures

to address (1) Second Draw Paycheck Protection Program (PPP) Loan guaranty applications

where there is a Hold Code on the Borrower’s First Draw PPP Loan, and (2) First Draw PPP 

Loan guaranty applications and Second Draw PPP Loan guaranty applications with Compliance 

Check Error Messages.

Under the CARES Act, PPP Lenders are deemed to have delegated authority to make and 

approve PPP loans without prior SBA review. After issuance of the SBA loan number, all First 

Draw PPP Loans made in 2020 were individually screened by an automated tool. The automated 

tool compared First Draw PPP Loan data against publicly available information and applied 

eligibility and fraud detection rules to identify anomalies and/or attributes that may indicate noncompliance with eligibility requirements, fraud or abuse. Additionally, after issuance of the SBA 

loan number, SBA performed data analytics, including reviewing information from the 

Department of Treasury Do Not Pay lists, and other analyses of the 2020 First Draw PPP Loan

portfolio. The automated tool screening, data analysis, and other analyses resulted in the 

issuance of Hold Codes on certain 2020 First Draw PPP Loans.

In 2021, before issuance of an SBA loan number, SBA is conducting front-end Compliance 

Checks on Lender loan guaranty applications for new First Draw PPP Loans and Second Draw 

PPP Loans using a modified version of the automated screening tool and information from the 

Department of Treasury Do Not Pay lists. When an issue is identified, the Compliance Checks 

generate a Compliance Check Error Message. In many cases, the Hold Codes and the 

Compliance Check Error Messages identify the same issues.
PAGE 2 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

As outlined in the Interim Final Rule for Second Draw PPP Loans, if information in SBA’s 

possession indicates that the Borrower may have been ineligible for the First Draw PPP Loan it 

received or for the loan amount received by the Borrower, the Lender will receive notification 

from SBA when the Lender submits an application for guaranty of a Second Draw PPP Loan. 

See, 86 FR 3712, 3722 (January 14, 2021). The Lender will receive the notification through the 

platform and it will include information regarding the Hold Code(s) on the 2020 First Draw PPP 

Loan. When a Lender submits a loan guaranty application for a Second Draw PPP Loan where 

the 2020 First Draw PPP Loan has a Hold Code(s), the application will be moved automatically 

to a research status, and the platform will provide the Lender an opportunity to support the 

resolution of the outstanding 2020 First Draw PPP Loan Hold Code(s). Once resolved, these 

Second Draw PPP Loan guaranty applications will be automatically submitted into the next stage 

of processing and will not require re-entry by the Lender.

Similarly, when the Compliance Check for a 2021 First Draw PPP Loan or a Second Draw PPP 

Loan identifies an issue, the Lender will receive a notification through the platform that will 

include information regarding the Compliance Check Error Message(s). When a Lender submits 

a loan guaranty application for a 2021 First Draw PPP Loan or a Second Draw PPP Loan and a 

Compliance Check Error Message(s) is generated, the platform will provide the Lender an 

opportunity to support the resolution of the outstanding Compliance Check Error Message(s). 

Once resolved, these 2021 First Draw PPP Loan guaranty applications and Second Draw PPP 

Loan guaranty applications will be automatically submitted into the next stage of processing and 

will not require re-entry by the Lender.

SBA is providing Lenders with the following methods for assisting with the resolution of Hold 

Codes and Compliance Check Error Messages:

1. Resolution of Hold Codes and Compliance Check Error Messages through Lender 

Certification (Delegated Authority)

If a Lender receives one or more of the Hold Codes or Compliance Check Error Messages 

identified in Table 1 below, those Hold Codes and/or Compliance Check Error Messages

may be resolved through a Lender certification process. If the Lender elects to resolve the 

Hold Codes and/or Compliance Check Error Messages through the Lender certification 

process, the Lender must review Table 1 for the examples of documentation and information 

that the Lender must obtain from the borrower in order to resolve the particular Hold Code or 

Compliance Check Error Message. If the loan guaranty application generated more than one 

Hold Code or Compliance Check Error Message, the Lender must resolve all Hold Codes 

and Compliance Check Error Messages before making the Lender certification. If there are 

any Hold Codes or Compliance Check Error Messages that require SBA resolution remaining 

after the Lender resolves the other Hold Codes or Compliance Check Error Messages, the 

Lender may make the Lender certification, but the loan will not be processed until all Hold 

Codes and Compliance Check Error Messages are resolved.

After the Lender has obtained, reviewed and retained in its file sufficient documentation to 

resolve all outstanding Hold Codes and/or Compliance Check Error Messages from Table 1, 

the Lender can go to the platform, where the Lender will be prompted onscreen from within 
PAGE 3 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

the platform to execute the certification. An Authorized Lender Official must complete the 

certification. The Authorized Lender Official will be required to certify as follows:

• Lender has obtained from the borrower and/or other sources, and has reviewed,

all information and documentation necessary to resolve the issue(s) underlying 

each of the Compliance Check Error Message(s) and Hold Code(s) checked 

below:

Compliance Check Error Message #/Hold Code # and Description

□ 501/1 Disqualifying Criminal History Identified/Criminal Record

□ 502/2 Disqualifying Bankruptcy Identified/Bankruptcy

□ 504/4 A Potential Match to Sanctions List Identified/Other Adverse 

Information (OFAC)

□ 505/5 Applicant Potentially Deceased/Potential Decedent Application

□ 506/6 Dormant Business Identified/Inactive Business

□ 507/7 Applicant Tax ID Discrepancy/Mismatch of TIN (EIN/SSN)

□ 508/8 Applicant Name Discrepancy/Mismatch of Entity Name 

(Individual or Company)

□ 509/9 Disqualifying Business Formation Date Identified/In Operation 

after February 15, 2020

□ 516/16 Large Number of Employees at Residential Location/Large 

Number of Employees at Residential Business Address

□ 546/46 Do Not Pay – Death Sources

□ 547/47 Do Not Pay – SAM

□ 548/48 Do Not Pay – TOP and CAIVRS

□ 549/49 Do Not Pay – TOP Education

• Except for any Compliance Check Error Messages or Hold Codes that require 

SBA resolution, the Lender has resolved all Compliance Check Error Message(s) 

and Hold Code(s) generated for this loan guaranty application.

• The Compliance Check Error Message(s) and Hold Code(s) have been resolved 

in accordance with Paycheck Protection Program guidance.

• Lender will retain the information and documentation supporting this 

certification in its files for the period required by Paycheck Protection Program 

document retention requirements. Lender will provide the information and 

documentation to SBA when Lender submits a forgiveness decision or guaranty 

purchase request, or upon SBA request, so that SBA can review the information 

and documentation in connection with a loan or lender review or a guaranty 

purchase review.

• Lender acknowledges that SBA is allowing the loan guaranty application to 

proceed in reliance upon this certification.

• I am an Authorized Lender Official and I am authorized to issue this certification 

on behalf of the Lender.
PAGE 4 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

Upon submission of the Lender certification, and provided that there are no outstanding Hold 

Code(s) or Compliance Check Error Message(s) that require SBA resolution, the platform 

will automatically move the loan guaranty application to the next stage of loan processing.

Lenders do not submit any documents to SBA at this time.

If the Lender is unable or unwilling to resolve all of the Compliance Check Error Message(s) 

or Hold Code(s), except for those that require SBA resolution, the Lender must withdraw the 

loan guaranty application from the platform.

When a Lender resolves Hold Code(s) and/or Compliance Check Error Message(s) through 

the Lender certification process, the Lender must submit all information and documentation

supporting the certification to SBA when the Lender submits a forgiveness decision or 

guaranty purchase request, whichever occurs first, or upon SBA request. If the Second Draw 

PPP Loan Lender is different than the First Draw PPP Loan Lender, and the Second Draw 

PPP Loan Lender resolves a Hold Code associated with the First Draw PPP Loan, the First 

Draw PPP Loan Lender will still be responsible for resolving the Hold Code at the time of 

loan forgiveness on the First Draw PPP Loan. The First Draw PPP Loan Lender may reach 

out to the Second Draw PPP Loan Lender or the borrower for information as to how the 

Second Draw PPP Loan Lender resolved the Hold Code on the First Draw PPP Loan.1.

SBA’s Office of Credit Risk Management (OCRM) will be reviewing random samples of 

loans where the Lender has submitted a Lender certification in support of a loan guaranty 

application. OCRM will review the information and documentation that the Lender was 

required to obtain, review and retain in support of the Lender certification. And, as part of its 

ongoing Lender oversight activities, OCRM will include in its loan file sampling those loans 

where the Lender submitted a Lender certification in support of a loan guaranty application

that were not previously reviewed by OCRM as part of the prior random sample to ensure 

that appropriate information and documentation exists in the Lender’s file.

2. Resolution of Hold Codes through SBA Review

If the Lender’s Second Draw PPP Loan guaranty application cannot be processed because 

there is a Hold Code on the First Draw PPP Loan that is identified in Table 2 below, the 

platform will provide the Lender an opportunity to submit information and documentation 

into the platform to support the resolution of the outstanding First Draw PPP Loan Hold 

Code. 

The Lender must resolve the Hold Code by submitting information and documentation 

through the platform for SBA review and resolution. Note: The platform reference guide

titled “Unresolved Borrower Resolution Process for Second Draw PPP Loans” lists the Hold 

Codes that require SBA resolution and provides guidance as to the types of information and 

documentation that may assist with resolution. It is imperative that Lenders respond timely, 

1 The Second Draw PPP Loan Lender remains responsible for providing to SBA, upon request, 

information and documentation supporting the Lender certification.
PAGE 5 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

as SBA will need time to review the documentation to determine whether the Hold Code(s) 

can be resolved. 

If SBA is able to resolve the Hold Code(s), the Second Draw PPP Loan guaranty application 

will be automatically submitted into the next stage of processing. If a Hold Code is resolved 

by SBA at this stage, the Hold Code will not require further SBA review at loan forgiveness.

If SBA is unable to resolve the Hold Code(s), SBA will not issue a loan number for the 

Second Draw PPP Loan. 

3. Duplicate Loans and Multiple DUNS Issues

SBA has controls in place to identify duplicate loans. (A borrower may receive only one First 

Draw PPP Loan and one Second Draw PPP Loan.) A Second Draw PPP Loan Lender may 

be notified of Hold Code 45 on the First Draw PPP Loan, which is identified as “Multiple 

DUNS Number.” Similar Compliance Check Error Messages may be generated on First 

Draw PPP Loans and Second Draw PPP Loans as follows: (1) “The supplied Tax ID is 

potentially already in use on another PPP loan;” or (2) “Only one PPP loan can exist with 

DUNS value.” The Lender must work with the borrower to determine whether the borrower 

has applied for and/or received a duplicate loan and after working with the borrower, contact

SBA through the platform Inbox using the category: “Duplicate Loans and DUNS issues.”

4. Other Hold Codes Not Covered Above

Some First Draw PPP Loans will have Hold Codes that cannot be resolved by the above 

processes. In those cases, the platform will display one of two messages as appropriate: (1) 

“Internal SBA Hold – Details Not Publicly Available,” or (2) “Internal SBA Hold that cannot 

be cleared at this time – Details Not Publicly Available.” For the “Internal SBA Hold –

Details Not Publicly Available” message, the Lender may contact SBA through the platform

Inbox to receive instructions on steps the Lender may take to assist SBA with resolution of

the issue. For the “Internal SBA Hold that cannot be cleared at this time – Details Not 

Publicly Available” message, no further action can be taken by the Lender. 

SBA will provide additional instructions in the user guide on the platform.
PAGE 6 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

TABLE 1: Resolution through Lender Certification (Delegated Authority)

Compliance 

Check 

Error

Message

Hold 

Code Description

501 1 Disqualifying Criminal History Identified/Criminal Record

502 2 Disqualifying Bankruptcy Identified/Bankruptcy

504 4 Potential Match to Sanctions List Identified/Other Adverse Information (OFAC)

505 5 Applicant Potentially Deceased/Potential Decedent Application

506 6 Dormant Business Identified/Inactive Business 

507 7 Applicant Tax ID Discrepancy/Mismatch of TIN (EIN/SSN)

508 8

Applicant Name Discrepancy/Mismatch of Entity Name (Individual or 

Company)

509 9

Disqualifying Business Formation Date Identified/In Operation After Feb 15,

2020

516 16 Large Number of Employees at Residential Location/Large Number of 

Employees at Residential Business Address

546 46 Do Not Pay - Death Sources

547 47 Do Not Pay – SAM 

548 48 Do Not Pay - TOPS and CAIVRS 

549 49 Do Not Pay - TOPS Education

Below is a list of the Table 1 Compliance Check Error Messages and Hold Codes, an 

explanation of the Compliance Check Error Messages and Hold Codes, and examples of 

documentation that can be used to resolve the Compliance Check Error Messages and Hold 

Codes. Please note that these are examples only and do not represent a comprehensive list of 

documents and information needed to resolve the Compliance Check Error Messages and Hold 

Codes. For Hold Codes, if the Second Draw PPP Loan Lender is not the same as the First Draw 

PPP Loan Lender, the Lender should also obtain a copy of the SBA Form 2483 (Borrower 

Application Form) (or Lender’s equivalent) submitted by the borrower on the First Draw PPP 

Loan.

Compliance Check Error Message/Hold Code Explanation and Resolution 

Documentation Examples 

501/1 Criminal Record identified in public records - Potential 

eligibility issue

Lender must obtain proof that the borrower (if an individual) and all 

individuals owning 20% or more of the equity of the borrower do not have a 

criminal record and/or obtain information and documentation explaining the 

criminal record:
PAGE 7 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

a. If no criminal record exists:

Obtain a statement from each individual, signed and dated, confirming that no 

criminal record exists or a background report that demonstrates that no 

criminal record exists. 

b. If a criminal record exists:

Obtain a statement from the individual, signed and dated, that describes the 

specific charge, date of the offense, final disposition, and date of disposition 

and supporting Court documentation. This statement must show that the 

criminal record falls outside of the restrictions in the version of the SBA Form 

2483 (Borrower Application Form) (Questions 5 and 6) (or lender’s 

equivalent) and/or SBA Form 2483-SD (Second Draw Borrower Application 

Form) (Questions 4 and 5) (or lender’s equivalent) submitted by the borrower.

502/2 Bankruptcy identified in public records - Potential eligibility issue

Lender must obtain proof that either (a) the borrower and/or owners of 20% 

or more of the equity of the borrower never filed for bankruptcy, or (b) that 

the bankruptcy was discharged prior to the application date of the First 

Draw PPP Loan or Second Draw PPP Loan, whichever is applicable, or filed 

after the disbursement date of the First Draw PPP Loan, such as:

a. Court filings with filing date and discharge date (where applicable)

b. Additional court correspondence 

c. Bankruptcy forms and documents 

d. If a Hold Code, loan transcript showing disbursement date for First Draw PPP 

Loan

504/4 Potential Match to Sanctions List Identified/Other Adverse Information 

(OFAC)

The name of the borrower or one of the owners of the borrower has matched 

against the name of an individual or entity on an Office of Foreign Assets 

Control (OFAC) sanctions list. (https://home.treasury.gov/policy-issues/officeof-foreign-assets-control-sanctions-programs-and-information) – Potential 

eligibility issue

Lender must document in their file that they have searched all OFAC lists 

for the names of the borrower and all owners of the borrower. For any 

matches, the Lender must compare the information on the OFAC lists, 

including age, address, nationality, gender and any other information 

available from the OFAC lists, against the information provided by the 
PAGE 8 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

borrower and/or its owners to determine whether it is a true match or a false 

positive. 

505/5 Owner or Principal of borrower, as entered in ETRAN or Paycheck 

Protection Platform, appears to be deceased in public records

Lender must obtain proof that each owner and principal is not deceased such 

as:

a. Identity affidavit

b. Current proof of identity including SSN

506/6 Borrower is no longer active according to Secretary of State filings 

or public records - Potential eligibility issue

Lender must obtain proof that the borrower was in operation as of February 

15, 2020 AND at the time of the application for the First Draw PPP Loan or 

Second Draw PPP Loan, whichever is applicable, such as:

a. Secretary of State formation filing

b. Filed copy of DBA documents

c. 2020 Tax returns 

d. Filed 2019 Tax returns

e. Current bank account statements

f. Current business license verified by issuing municipal authority

g. Current official entity verification certificate from state of registration

h. Copies of paid invoices before & after February 15, 2020

507/7 Tax ID of Borrower or Principal, as entered in ETRAN or Paycheck 

Protection Platform, appears to be inaccurate

Lender must obtain proof of correct TIN (EIN/SSN) such as:

a. Copy of 2019 Tax Return or other recently filed tax forms verifying the Name 

and Tax ID Number for the borrower or principal

b. IRS EIN document

c. Copy of SSN card

508/8 Entity/Individual Name of Borrower or Principals, as entered in ETRAN or 

Paycheck Protection Platform, appears to be inaccurate

Lender must obtain proof linking borrower and principal names to TIN 

(EIN/SSN) such as:

a. Copy of 2019 Tax Return or other recently filed tax forms verifying the Name 

and Tax ID Number for the borrower or principal
PAGE 9 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

b. Filed copy of DBA documents

c. Copy of Business License or State License Registration 

d. Individual's Driver's License or Official ID

e. Copy of SSN card

509/9 Public records indicate that borrower either came into existence after 

February 15, 2020 or business activity prior to February 15, 2020 was not 

detected - Potential eligibility issue

Lender must obtain proof that the borrower was in operation as of February 

15, 2020 AND at the time of the application such as:

a. Secretary of State entity formation filing

b. Filed copy of DBA documents

c. Filed 2019 Tax returns

d. Filed 2020 Tax Returns

e. Bank account statements

f. Business license verified by issuing municipal authority

g. Copies of paid invoices before & after February 15, 2020.

516/16 Borrower address entered in ETRAN is a Residential Address and Number 

of Employees >= 100

Lender must obtain proof either that (a) the borrower has an alternate 

business address that supports the number of employees; or (b) that the 

borrower’s operations can be conducted from the current residential 

business address such as: 

a. Proof of an alternate operating address such as a current utility bill, current 

lease/rental agreement, or mortgage note/mortgage statement, and an 

explanation of why the alternate operating address was not listed on the 

application form

b. Signed statement by the borrower explaining how the borrower operations and 

number of employees can be supported from a residential address

c. Payroll documentation validating number of employees

d. Proof that the borrower address entered in ETRAN or Paycheck Protection 

Platform is not a residential address
PAGE 10 of 11 EXPIRES: 2-1-22

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

546/46 Owner or Principal of borrower, as entered in ETRAN or Paycheck 

Protection Platform, appears to be deceased - Potential eligibility issue

Lender must obtain proof that each owner and principal is not deceased such 

as:

a. Identity affidavit

b. Current proof of identity including SSN

547/47 Borrower appears to be on System for Award Management (SAM) 

Exclusion list - Potential eligibility issue

Lender must obtain proof that the borrower is not on the System for Award 

Management (SAM) Exclusion list such as:

a. Verification of ETRAN or Paycheck Protection Platform accuracy

b. Documents validating business is not debarred

Release of debarment

548/48 TOP and CAIVRS - Borrower listed in Do Not Pay for delinquent or has 

defaulted on federal debt and caused a loss within past 7 years - Potential 

eligibility issue

Lender must obtain proof that the borrower has not defaulted on a direct or 

guaranteed business loan (including Federal disaster loans) from SBA or any 

other Federal agency and caused a loss to the government in the last 7 years, 

such as:

a. Screenshot of search on U.S. Department of Housing and Urban Development

Credit Alert System (CAIVRS)

b. Verification of ETRAN or Paycheck Protection Platform accuracy

c. Current credit report(s)

d. Proof of resolution

549/49 Borrower listed in Do Not Pay for delinquent federal debt – Potential 

eligibility issue

Lender must obtain proof that the borrower is not delinquent on any federal 

debt, such as:

a. Verification of ETRAN or Paycheck Protection Platform accuracy

b. Current credit report(s)

c. Proof of resolution
PAGE 11 of 11

SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recycling Program Printed on Recycled Paper

TABLE 2: Resolution through SBA Review

Hold 

Code Description

12 SBA Franchise Directory Review

15 Potential Ineligible Business Size

18 Aggregate Data Mismatch

21 Employee Count Threshold

24 Business Address is Currently Vacant

26 Cannabis – Marijuana/Cannabis Sales

28 Compliance - Debarred Businesses

29 Compliance - Defaulted SBA loan in the last 7 years

30 Compliance - DOL OFCCP Violations

31 NAICS 522 - Credit Intermediation

32 Payday Lender

33 Potential Affiliation Issue

34 Data Anomaly Issue

35 Research Duplicate 9 Digit Tax ID Issue

37 SBA - Potential Affiliation Issue

38 Foreign Country-related entities

39 State or Local Government

40 Eligibility - Lobbying

Questions:

Questions concerning this Notice may be directed to the Lender Relations Specialist in the local 

SBA Field Office, which can be found at https://www.sba.gov/tools/localassistance/districtoffices.

John A. Miller

Acting Associate Administrator

Office of Capital Access

EXPIRES: 2-1-22