OMB Control Number: 3245-0407 

Expiration Date: 12/31/2023

CARES Act Section 1102 Lender Agreement

 (“Lender”) hereby agrees as a condition and in 

consideration of authorization by the United States Small Business Administration (“SBA”) and 

the Department of Treasury for Lender to make Paycheck Protection Program SBA-guaranteed 

financing available as part of the Coronavirus Aid, Relief, and Economic Security Act 

(“CARES Act”) (P.L. 116-136) to eligible recipients, as follows (the “Agreement”): 

1. Lender Eligibility Requirements.

Federally insured depository institutions, federally insured credit unions, and Farm Credit 

System institutions (other than the Federal Agricultural Mortgage Corporation) are eligible to 

participate in the Paycheck Protection Program unless they currently are designated in Troubled 

Condition by their primary federal regulator or are subject to a formal enforcement action by 

their primary federal regulator that addresses unsafe or unsound lending practices. 

Lender attests that it is: 

Initial below 

A federally insured depository institution; OR 

A federally insured credit union; OR 

A Farm Credit System institution (other than the Federal Agricultural 

Mortgage Corporation) that applies the requirements under the Bank 

Secrecy Act and its implementing regulations as a federally regulated 

financial institution, or functionally equivalent requirements. 

Lender attests that it is NOT: 

Initial below 

Designated in Troubled Condition by its primary federal regulator 

Subject to a formal enforcement action by its primary federal regulator 

that addresses unsafe or unsound lending practices 

Lender Information: 

Institution Name: 

Headquarters (City, State): 

Primary Federal Regulator (check one): FRB 

FDIC 

OCC 

NCUA 

FCA 

Lender Identifier (provide any that apply) 

RSSD ID: 

FDIC Certificate ID: 

OCC Charter No.: 

NCUA Charter No.: 

SBA Form 3506 (07/2020)
2. Application for Guaranty. This Agreement governs only “covered loans,” duly approved

under delegated authority hereafter for guaranty by SBA, that are subject to the Paycheck

Protection Program under the CARES Act, section 7(a)(36) of the Small Business Act, any rules

or guidance that has been issued by SBA implementing the Paycheck Protection Program, or any

other applicable Loan Program Requirements, as defined in 13 CFR § 120.10, as amended from

time to time (collectively “PPP Loan Program Requirements”).

3. Approval of Guaranty. Lender will process and approve covered loans under delegated

authority from SBA. Lender assumes all obligations, responsibilities, and requirements

associated with delegated processing of covered loans made under the Paycheck Protection

Program. Any change in the terms or conditions stated in the loan authorization shall be made in

accordance with PPP Loan Program Requirements. For purposes of making covered loans to an

eligible recipient under the Paycheck Protection Program, Lender is responsible, to the extent set

forth in the PPP Loan Program Requirements, for all decisions concerning the eligibility

(including size) of a borrower for a covered loan. Lender may issue a covered loan approved

under PPP procedures without prior SBA review and approval of the processing and underwriting

of the loan by executing a PPP Authorization.

4. Closing and Disbursement of Covered Loans. Lender must close and disburse each covered

loan in accordance with the terms and conditions of the PPP Authorization and PPP Loan

Program Requirements. Lender must ensure that a note and all other Loan Documents (as defined

in this paragraph) and additional documents are properly executed and take such other actions

necessary to fulfill the requirements of the Paycheck Protection Program. SBA is entitled, at any

time, to examine and obtain copies of all notes, certifications and documentation (herein,

collectively, called “Loan Documents”), and all other records held by Lender which relate to

covered loans made pursuant to the Paycheck Protection Program.

5. Administration of Covered Loans. Lender will hold the Loan Documents and receive all

payments of principal and interest unless Lender is required to transfer or assign the note to SBA

or a third party at SBA’s direction. Lender must service and liquidate all covered loans made

under the Paycheck Protection Program in accordance with PPP Loan Program Requirements.

Except when SBA directs otherwise, all servicing actions will be the responsibility of Lender,

which must follow accepted standards of loan servicing employed by prudent lenders.

6. Purchase by SBA. By making any written demand that SBA purchase the guaranteed portion

of a loan, Lender will be deemed thereby to certify that the covered loan has been made, closed,

serviced, and liquidated in compliance with the Paycheck Protection Program and PPP Loan

Program Requirements. This Agreement will remain in full force and effect with respect to the

covered loan after any purchase.

7. Prohibited Fees. Other than a fixed interest rate of 1.0% on the covered loan, Lender is not

permitted to charge or receive any bonus, fee, prepayment penalty, commission or other payment

or benefit from a borrower in connection with the making or servicing of any covered loan under

the Paycheck Protection Program.

SBA Form 3506 (07/2020) 2
 

 

 

8. Termination.

A. A Lender’s authority to make a covered loan under this Agreement will terminate on August

9, 2020. Either party may also terminate this Agreement upon not less than 10 days written

notice by certified mail to the other party. Termination will not affect the guaranty of any

covered loan previously authorized by SBA under the Paycheck Protection Program. It is

understood and agreed that Lender shall continue to comply with the Paycheck Protection

Program and PPP Loan Program Requirements with respect to any covered loan previously

authorized by SBA, including but not limited to the servicing and liquidation of such covered

loans. Termination by either party will not affect in any way Lender’s continuing obligation

to comply with this Agreement, the Paycheck Protection Program, and all PPP Loan Program

Requirements with respect to any covered loan previously authorized by SBA under this

Agreement. If this Agreement is terminated by either Lender or SBA, Lender hereby agrees

that SBA may in its sole discretion transfer some or all of the covered loans and/or the

servicing and liquidation of such covered loans and related fees or income to SBA or another

entity approved by SBA. If SBA requires the transfer of Lender’s covered loans, Lender

must cooperate with SBA to transfer responsibility for servicing and liquidating of such

covered loans.

B. The guaranty of any covered loan will be automatically terminated if Lender does not submit

to SBA a demand to purchase the guaranty or a request to extend the maturity within one year

after the maturity of the note.

9. Assignment. Lender may only assign or transfer its rights and obligations under this

Agreement with SBA’s prior written consent, which SBA may withhold in its sole discretion.

10. Interpretation of this Agreement.

A. This Agreement is subject to 7(a)(36) of the Small Business Act, including the Paycheck

Protection Program and PPP Loan Program Requirements and will be interpreted and

construed subject to, and to give full effect to, the broad scope of SBA’s power and authority

under the Small Business Act and those requirements. Lender consents and agrees to all rights

and remedies available to SBA under the Small Business Act, the Paycheck Protection

Program and PPP Loan Program Requirements, as each of those are amended from time to

time, and any other applicable law.

B. To the best of its knowledge, Lender certifies that it is in compliance and will maintain

compliance with all applicable requirements of the Paycheck Protection Program, andPPP

Loan Program Requirements.

C. Lender understands that SBA’s rights and powers under the Small Business Act, the Paycheck

Protection Program and PPP Loan Program Requirements are in addition to, and exist

independent of, this Agreement, and that nothing in this Agreement may be asserted against

SBA under any circumstances to delay or prevent SBA’s full exercise of its rights under

applicable law.

D. Lender agrees to hold SBA harmless for any action taken by SBA in enforcing this

Agreement, the Small Business Act, the Paycheck Protection Program and PPP Loan Program

Requirements against Lender for any covered loan made under this Agreement.

SBA Form 3506 (07/2020) 3
 

 

 

 

 

 

E. Lender agrees that any modification to this Agreement to be asserted against SBA or any

exemption to be claimed from any provision of the Small Business Act, the Paycheck

Protection Program, or PPP Loan Program Requirements is invalid, null, and void unless it is

made in writing by an official of SBA authorized to grant such modification or exemption

and was made after full disclosure to SBA of all material facts and circumstances.

F. This Agreement is to be interpreted under and construed in accordance with federal law.

G. This Agreement will inure to the benefit of, and be binding upon, the Lender’s authorized

successors and assigns.

By signing below, I hereby certify that I have the authority to execute this Agreement for the 

Lender on whose behalf I am signing, and that all representations made are true and correct to 

the best of my knowledge. I further acknowledge that on behalf of the Lender I have also 

submitted an Incumbency Certificate attached hereto. I further acknowledge that any false 

statements made to the U.S. Small Business Administration and Department of the Treasury can 

result in criminal prosecution under 18 U.S.C. 1001, 15 U.S.C. 645, and other provisions and 

imposition of civil money penalties under 31 U.S.C. 3729. 

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement. 

Name of Lender 

Signature Date 

Name and Title 

ATTEST/WITNESS 

I, , hereby represent and warrant that I am a duly 

elected or appointed Secretary or Officer of (the 

“Lender”) and that is duly authorized and 

has the legal capacity to execute this Agreement on behalf of the Lender. 

Signature: 

Name and Title: 

Attachment: Incumbency Certificate 

Transmit executed SBA Form 3506 (07/2020) and Attachment to DelegatedAuthority@sba.gov. 

SBA Form 3506 (07/2020) 4
Paperwork Reduction Act – You are not required to respond to this collection of information 

unless it displays a currently valid OMB Control Number. The estimated time for completing 

this agreement, including gathering information, is 10 minutes. Comments about this time or 

suggestions for reducing the time burden estimate should be sent to Small Business 

Administration, Director, Records Management Division, 409 3rd St., SW, Washington DC 

20416, and/or SBA Desk Officer, Office of Management and Budget, New Executive Office 

Building, Washington DC 20503. DO NOT SUBMIT AGREEMENTS TO THESE 

ADDRESSES. 

SBA Form 3506 (07/2020) 5