There are many SBA developments amid the Coronavirus outbreak and several changes are being made to the SBA loan program. As changes continue to unfold, I will keep you informed.
Friday morning, President Trump announced $50,000,000,000 in additional aid for Small Business Borrowers through the SBA Disaster Assistance Program. These loans are low interest rate loans funded directly by the SBA to any Small Business Impacted by the Coronavirus. If you have borrowers asking for assistance or how to apply, please direct them here:
https://disasterloan.sba.gov/ela/Information/ApplyOnline
They will need to apply directly with the SBA.
Here is a FAQ sheet to help you answer questions about what is available through the Disaster Loan Program:
https://disasterloan.sba.gov/ela/Documents/Three_Step_Process_SBA_Disaster_Loans.pdf
Thursday, Senator Marco Rubio introduced a bill that includes the following provisions:
Chairman Rubio's bill responds to the President's request by including authority for $50 billion in 7(a) lending for the remainder of FY2020. This is in addition to the $30 billion in 7(a) lending authority provided for in the FY2020 funding package passed by Congress and signed into law in December. It also proposes several stimulus measures to be in effect for the duration of one year, including the following key provisions:
- Waives all borrower upfront guaranty fees for all borrowers, regardless of loan size
- Waives the ongoing fee for all lenders
- Increases the guarantee on all 7(a) loans to 90%
- Increases the Express maximum loan amount to $1 million from $350,000, and after 1 year, lowers the maximum loan amount to $500,000 rather than the existing $350,000.
- Gives increased flexibility to the Economic Injury Disaster Loans (EIDLs)
If passed, this will be the first time since 2008. ALL 7a loans will have a 0% Guarantee fee and carry a 90% guaranty.
In addition, please remember that you can refinance your own debt to mitigate any credit risks which you identify that could be directly impacted by Coronavirus. This includes extending terms, potentially lowering interest rates, or providing short term working capital. Borrowers that immediately come to mind are hospitality industry, restaurants, or entertainment facilities.
If you or your customers have any questions, please do not hesitate to ask. As always we are here to serve you.