IMPORTANT UPDATES ABOUT THE SBA LOAN RELIEF PROGRAM
February 25, 2021 - The Small Business Administration (“SBA”) recently determined that the $3.5 billion that was appropriated to carry out the Economic Aid Act is insufficient to make the payments for the periods authorized by the CARES Act, as amended by the Economic Aid Act. Effective as of February 16, 2021, the following changes are in effect:
Newly Eligible First Round Loans
For newly eligible loans, SBA will make three (3) months of payments. These loans include 7(a) and 504 loans approved on or before September 27, 2020 that were fully disbursed on or after September 28, 2020.
Second Round Loans (except Community Advantage)
For all non-Community Advantage second round loans, SBA will make two (2) months of payments. In addition to these payments, for non-Community Advantage second round loans assigned a North American Industry Classification System (NAICS) code beginning with 61, 71, 72, 213, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812, SBA will make three (3) additional months of payments. Second round loans include loans that were approved before March 27, 2020.
Second Round Community Advantage Loans and Microloans
For second round Community Advantage Loans and Microloans, SBA will make five (5) months of payments. Second round loans include loans that were approved before March 27, 2020.
Loans Approved between February 1, 2021 and September 30, 2021
For newly approved loans, SBA will make three (3) months of Round 2 payments, subject to availability of funds.
Loans That Will Not Receive Second Round Payments
Loans that were approved between March 27, 2020 and September 27, 2020 were previously eligible for six (6) months payments under the CARES Act if the loans were disbursed on or before September 27, 2020. If these loans were fully disbursed after September 27, 2020, they are eligible for three (3) months as described above under Newly Eligible First Round Loans. None of these loans will be eligible for second round payments.
All Round 2 payments made are subject to the monthly payment limit of $9,000
Please click here for a helpful chart provided by the SBA that illustrates the changes above.
Thank you for choosing our bank for your SBA Loan. We stand by our clients in times of uncertainty and look forward to working together in the better times ahead. Please reach out to your local banker with any questions about this program.