February 3, 2021
C-Suite Wednesday – SBA Borrowers are Now Eligible for Additional Debt Relief Payments
Beginning this month, SBA borrowers who previously received six months of debt relief payments will be eligible for three additional months of payments. Borrowers assigned a NAICS code beginning with 61, 71, 72, 213, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812 will then be eligible for five supplemental months of debt relief payments immediately following their initial three month period.
To be eligible for a second round of debt relief payments, the borrower generally must have a 7(a) or 504 loan that is in a regular servicing status. For loans on deferment, the SBA will not make a debt relief payment until the deferment period has expired. Borrowers are also limited to $9,000 in monthly debt relief payments and are only eligible to receive debt relief payments on one loan.
To provide 7(a) borrowers with a second round of debt relief payments, lenders are required to submit the information found on SBA form 1502 through the CARES Act menu on the FTA’s website. This information must be submitted by the 7th day of each month (or the next business day). The SBA will then make a payment based on that information by the 15th day of that month. On 504 loans, the SBA will automatically make second round debt relief payments by the 15th day of each month based on information maintained in the CSA E-Tran system.
In addition to creating a second round of debt relief payments, the Economic Aid Act also adjusted the rules surrounding the date when loans became eligible for payments. Previously, the SBA required that to be eligible for the first round of debt relief payments the covered loan had to be moved into a regular servicing status by September 27, 2020. However, that rule has been adjusted so loans approved prior to the September 27 deadline may now receive an initial six months of debt relief payments which may be immediately followed by second round payments.
SBA Procedural Notice 5000-20079