Subsidy for Certain SBA Loans

The Small Business Administration (SBA), has also allowed for certain subsidies where the loan is guaranteed by the SBA.  This is outside of the current Payment Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Programs, within the CARES Act.

Covered Loans Include:
  • Loans guaranteed by the SBA under Section 7(a) of Small Business Act (excluding paycheck protection loans under section 1102)
  • Loans guaranteed by the SBA under title V of the Small Business Investment Act
  • Loans made by an intermediary to a small business concern using loans or grants received under section 7(m) of the Small Business Act
With respect to the ‘covered loans’ above, the SBA will pay the principal, interest and fees that are owed on these loans in a regular servicing status for 6 months beginning:
  • On next due date for loans made before the CARES Act and are not on deferment
  • With the next due date after a deferment period for loans made before the CARES Act and are on deferment
  • Beginning with the first payment due for loans made after CARES Act

Essentially, for types of SBA loans that clients may have that are OUTSIDE of the 7a and 7(b)(2) loans (also known as PPP or EIDL) which cover COVID-19 issues, the SBA is providing relief by paying 6 months of principal, interest and fees.

For further questions on this topic please reach out to me at [email protected] or a member of our task force at [email protected].