SBA Debt Relief Program

The Small Business Administration (SBA) Debt Relief Program is part of the Coronavirus Aid, Relief, and Economic Security - CARES Act and is intended to help small businesses cope with the challenges they face during the Coronavirus (COVID-19) pandemic. The program provides immediate financial relief to businesses with new and existing non-disaster SBA loans.

SBA Debt Relief Program Details:

The SBA Debt Relief Program provides small businesses with eligible SBA loans with immediate relief from loan payments. Under the program, the SBA will automatically pay all loan payments, including principal, interest, and fees for six months only.

Eligible borrowers do not have to apply for this program, as they will be enrolled automatically. Payments will be made by the SBA with the next payment due on their loans. For loans currently on deferment, the debt relief program will take effect after the deferment period has ended.

Lenders are notified by the SBA that it will pay eligible borrower loan payments. It has further issued instructions for lenders not to collect loan payments from eligible borrowers after March 27, 2020. Should loan payments have been collected from eligible borrowers after this date, the borrowers must be given the option of having the payments returned.

SBA Debt Relief Program Eligibility:

Borrowers with current SBA 7(a), 504, and Microloans are eligible for the SBA debt relief program. This also applies to SBA 7(a), 504, and Microloans made after March 27, 2020, that have been fully disbursed before September 27, 2020. Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans do not qualify for this program.

Additional Debt Relief:

Borrowers with current SBA disaster loans for business, private nonprofits, homeowners, and renters that were in "regular servicing" status on March 1, 2020, are provided with automatic deferments through December 31, 2020.

Loans on deferment will continue to accrue interest throughout this period. Borrowers will continue to receive 1201 monthly payment notices, which will indicate that the loan is currently on deferment and that no payment is due.

Preauthorized Debit (PAD) or recurring payments that have been established on these loans are not automatically canceled and the borrower must initiate the cancelation of these payments. Once the deferment period is over, borrowers will have to reestablish recurring payments.

Borrowers wanting to continue making regular payments during the deferment period may do so. These payments will then be applied normally.

FAQs:

How does the SBA debt relief program work?

Under the SBA debt relief program, businesses with eligible SBA loans are given immediate financial relief. The SBA automatically covers all loan payments, including principal, interest, and fees for six months.

Who is eligible for the SBA debt relief program?

Borrowers with current SBA 7(a), 504, and Microloans are eligible for the SBA debt relief program. This also applies to SBA 7(a), 504, and Microloans made after March 27, 2020, that have been fully disbursed before September 27, 2020.

What is the SBA Debt Relief Program?

The SBA Debt Relief Program is part of the Coronavirus Aid, Relief, and Economic Security - CARES Act and it provides immediate financial relief to businesses with new and existing non-disaster SBA loans.

How do I apply for the SBA Debt Relief Program?

Eligible borrowers do not have to apply for this program, as they will be enrolled automatically.

Is the SBA Debt Relief Program taxable?

No.