December Stimulus Law: SBA Loan Forgiveness?

by a searcher from Harvard University - Harvard Business School

3 years ago

I read through the law and can't find the answer definitively. Does the new stimulus law passed last night continue the 6 months of debt relief (forgiving fees, interest, and principal) for new SBA 7A loans?

SBA Link to the expired program: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/sba-debt-relief
Full Law Text: https://www.cnn.com/2020/12/21/politics/new-covid-stimulus-bill-text/index.html

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7 comments

lender from University of Missouri - Columbia

The SBA will be issuing guidance soon with regards to the final parameters. Main focus for buyers, as JD pointed out, will be the waiving the guarantee fee and the 6 months of payments up to $9k per month. However keep in mind the stimulus bill also carries a new round of PPP funds. This was all encompassing last Spring and banks are still working on the forgiveness. This round will most likely be less time sensitive, but there appear to be a lot more eligibility validation requirements. Your lender and their support staff may be pulled away from new money to service these loans. Make sure you are in communication with your lender as this could delay an approval/closing process.

3 years ago | like reply | 1 like

searcher from Stanford University - Graduate School of Business

This section makes it sound like the remainder of the loan payment for those 3 months isn't due until the end of the loan period:

"If, for a month, the total amount of principal, interest, and associated fees that are owed on a covered loan for which the Administration makes payments under paragraph (1) is more than $9,000 the Administrator may require the lender with respect to the covered loan to add the amount by which those costs exceed $9,000 for that month as interest to be paid by the borrower with respect to the covered loan at the end of the loan period"

3 years ago | like reply | 0 likes

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