A lot has transpired over the past 14 months as it relates to the CARES Act and Economic Aid Act. Below are some important notes to keep in mind as you navigate your SBA loans. For complete details, please refer to SBA Procedural Notices 5000-20079 and 5000-20095.
- Round 1 Section 1112 must be completed before Round 2 payments can begin.
- Round 1 Section 1112 payments are not capped at $9,000 per month, including loans that are eligible to begin receiving Round 1 payments after deferment.
- Borrowers are responsible for paying any excess amount over the $9,000 cap. If Borrower cannot pay the excess amount when due, they must immediately contact CDC/Lender.
- “Underserved” businesses include all Community Advantage (CA) loans; all microloans; and targeted 7(a) and 504 loans to businesses assigned a NAICS code beginning with 61, 71, 72, 213, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812.
- Businesses that have received (or will receive) debt relief on any 7(a) loan, 504 loan, or Microloan that was approved 3/27/2020 through 9/27/2020 are not eligible for Section 1112 payment assistance on any new 7(a) loan, 504 loan, or Microloan approved 2/1/2021 to 9/30/2021.
- All Section 1112 payments begin with the next payment due on or after 2/1/2021 or beginning with the next payment due after any deferment period is granted.
- The number of months for Round 2 Section 1112 payments has been reduced in accordance with the “Adjustment Plan” developed by SBA.
- Loans that are in liquidation status or should have been transferred into liquidation status are not eligible for Section 1112.
Nick Collins
Bank Five Nine
