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New COVID Relief Bill Makes Additional SBA Funds Available

December 28, 2020 / by VITAL Financial Services

** Updated February 2021 after adjustment of Section 1112 payments due to insufficient SBA funds **

 

Congress is moving forward on a long-awaited new round of stimulus efforts, which include additional funding for SBA programs. Here is a brief review of the key information:blog image - additional COVID Relief

 

  • Three months of payment relief (P&I payments made by the SBA, referred to as “Section 1112 payments”) will be available for new SBA 7(a) loans. (updated Feb. 2021)


  • 7(a) borrowers with loans disbursed prior to 3/27/20 will receive an additional two months of P&I payments beginning in February 2021 (capped at $9,000/month). Businesses in specified NAICS codes may be eligible for an additional three months of Section 1112 payments immediately following the two months. (Updated Feb.  2021)


  • All Section 1112 payments are considered non-taxable income. This provision is retroactive starting with the enactment of the CARES act


  • The guarantees on SBA 7(a) loans will be increased to 90% until 30, 2021, and lender and borrower fees will be waived.


  • SBA Express Loan amounts are increased from $350,000 to $1 million until Sept. 30, 2021, and guarantees are temporarily increased to 75% for loans under $350,000. Beginning Oct. 1, 2021, the amount is permanently increased to $500,000 and guarantees return to 50%.


  • The Paycheck Protection Program will be reopened with an additional $284 billion in funding and expanded criteria. As previously for PPP loans, we are asking lenders to underwrite and submit their own PPP applications through E-Tran.


Please contact our experienced SBA lending team if you need support with SBA 7(a) loans in 2021.

 

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Topics: SBA Loan, small business, Lenders, Borrowers, COVID Relief, 7a Loans

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