SBA Loan Deferment

This is strange, because all of our clients who have SBA notes, the SBA made payments for them through December 1st. I believe it was 6 months of deferred payments. Although after that date, it has gone back to normal payments. I haven't seen any guidance from the SBA. You can reach out to the SBA groups in your area, typically called Business Finance Group of "location"

Anonymous - We are not a direct lender but a broker. However, we also have a bank consulting division and consult for community banks and some SBA Banks throughout the Country. Under the SBA guidelines the Bank has the ability to grant up to a 3 month deferment without investor approval. However, if you request a deferment beyond 90 days and the Bank approves it, typically the Bank has to request approval from the investor. There may have been some changes allowing the Bank to go longer without investor approval with some of the recent stimulus, but I have to check on that. However, the initial decision on whether or not to grant the deferment first lies with the bank itself. Deferments are not automatic, and granting a deferment for any amount of time is ultimately the decision of the servicing lender.

I have found that most lenders have been generous in granting at least one 3 month extension, and many are granting a second three months or did after the initial set of payments provided by the SBA via the Cares Act ran out. However, many lenders are not granting extensions beyond 3 months due to the SBA made payments and the additional payments many SBA customers are getting starting this month. I have not seen very many lenders at all make payment extensions beyond 90 days at a time. Often times the investor will not grant the payment extension beyond 90 days. Furthermore, to get a long term extension in many cases the SBA has to approve it and often times the SBA must take out the investor when that happens. So typically only in cases of dire need do we see this happen, as lenders do not want to be in the habitat of having the SBA take out the investor or of having to go to the investor to request multiple extensions.

If you are really in need of the extension to survive, I would recommend putting together updated financial information with projections and show a timeline of how you plan to get your business from where it is at today to where you can be to survive, and in doing so justify your need for an additional extension. Present the best case you can to your lender. If they still do not grant the extension, then you probably need to try to find a way to move forward without it. If you really do not need the extension to survive but it would be helpful, then likely you will have a hard time getting the Bank to provide one. I hope this was helpful. I wish I could provide better news. If you want to talk through it I would be happy to discuss it with you at###-###-#### or via email at --@----.com I wish you luck.