Dear Clients, Business Associates and Friends:
The Small Business Administration’s Debt Relief Program eliminates certain SBA loan payments for six months. As of March 27, the SBA covers all SBA 7(a), 504, and microloan payments, including principal and interest.
The Paycheck Protection Program loans and Economic Injury Disaster Loans aren’t eligible. Participation in the program is automatic, and no application is necessary. The SBA has instructed lenders to stop collecting payments from borrowers during the debt-relief period.
For loans that aren’t deferred, the SBA will start making payments on the next payment due, and will make six monthly payments. With loans that are deferred, the SBA will make payments starting with the first payment due after the deferment and will make six monthly payments.
Businesses that pay their 7(a), 504, or microloans through automatic payments have to stop these payments during the debt-relief period. If a business makes a payment on its loans after March 27, they say, its lender must give them the option to return the payment or apply it to the loan balance.
New 7(a), 504, and microloans that businesses apply for and receive between March 27 and Sept. 27 are also eligible for the Debt Relief Program. For these loans, the SBA will pay the first six monthly payments. The SBA will make payments within 30 days of the date that the first payment is due.
While SBA Serviced Disaster (Home and Business) Loans aren’t eligible for the Debt Relief Program, if the loan had a “regular servicing” status on March 1, then the SBA will automatically defer loan payments through Dec. 31. These loans will continue to accrue interest, but businesses are not required to make regular payments until after Dec. 31. With disaster loan deferrals, the SBA does not automatically cancel pre-authorized or recurring payments. Businesses are responsible for canceling these payments.
AS ALWAYS, WAGNER & ZWERMAN IS HERE TO ANSWER ALL OF YOUR QUESTIONS AND CONCERNS. WE ARE ALL IN THIS TOGETHER.
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