The Coronavirus Aid Relief and Economic Security (CARES) Act was passed on Friday, March 27th. The passage of this bill brings many benefits and resources to business owners and communities. It also brings a lot of questions. We want you to know that we are in this together. We are here to help and will do so in any way we can. We are staying up to date on all regulations and will relay them to you as we get them.
Today we want to highlight some of the programs of the Act, and share the details that are available at this time. Please utilize these resources and share them with your team members and clients.
This program will pay the monthly payments (including principal, interest and fees) on existing SBA 504, 7(a), Community Advantage, and Microloans that are current for a period of six months. Borrowers that qualify for this program will not need to do anything to take advantage of it as we will work with SBA to obtain payment. We do not know when these payments will start and if you can’t make upcoming payments, please contact your lender. At this time we do not have details on the program beyond this at this time, but we expect to learn about regulations in the coming days and will post updates when they are available.
The SBA Debt Relief Program gives immediate relief to borrowers with existing SBA 7(a) loans, 504 loans and microloans. For these existing borrowers, the SBA will cover all loan payments for the next six months. This includes principal, interest and fees.
7A Info
- The SBA will also pay the principal and interest of new 7(a) loans issued prior to September 27, 2020.
- The SBA will pay the principal and interest of current 7(a) loans for a period of six months.
Information on when the first payment will be made has not been released.
504 Info
The 504 Loan Program Central Servicing Agent (CSA) has released that they will NOT apply an ACH debit to the borrower’s account to cover the loan payments due on April 1, 2020 for all 504 loans in regular servicing status. Under the CARES Act, SBA will pay the principal, interest and any associated fees that are owed on a 504 loan in a regular servicing status to the CSA within 30 days of April 1. SBA will continue to make these loan payments to the CSA for the 6-month period beginning April 1, 2020.
This program is still actively taking
applications. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
If you applied for the SBA’s Economic Injury Disaster Loan before 3/30/2020 and you want to receive your forgivable $10,000 loan advance, you must reapply at the SBA’s newly launched
portal. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.
This is a loan program that allows businesses to borrow up to 250% of their average monthly payroll. While this program was signed into law by the President, we are waiting for guidance from SBA on how the program will be offered. Use this
Guide and Checklist to see if you are eligible. Check out these
frequently asked questions about the program. This is not a program that HCDC Lending is able to facilitate, please contact your local lender for details on applying.
