As the novel coronavirus continues to spread, the Small Business Administration (SBA) has distributed several loans to help small businesses stay afloat. In a continuous effort to aid these business owners, the SBA has further issued a Debt Relief Program. Unlike many of the other programs issued by the SBA, this program doesn’t provide loans, but instead, it covers 6 months of principal, interest, and any additional fees owed by borrowers.
If you area small business owner who’s worried about your loans, the Debt Relief Program is available for you to rely on. Below, we have comprised all the information that you need in order to get the most help for your business.
Who qualifies for this program?
If you are a current borrower of a 7(a), 504, or Microloan in regular servicing status or if you obtained your 7(a), 504, or Microloan before September 27, 2020, then you qualify for this program.
How does the program work?
If you qualify for this program, you don’t have to do anything! Qualification of the Debt Relief Program is provided automatically by the SBA and will be covered without you needing to apply. Depending on the type of loan you have, relief will be provided in the following below:
- For any loans NOT on deferment, the SBA will make payments beginning with the next payment due on the loan. After that, they will make six monthly payments.
- For any loans that are currently on deferment, the SBA will make payments starting with the next payment due after the deferment period. After that, they will continue to make six monthly payments.
- Loans made after March 27, 2020 and completely disbursed before September 27, 2020 will be covered starting from the first payment due on the loan with six monthly payments afterwards.
What’s the catch?
All this sounds too good to be true, so what’s the catch?
Unfortunately, the Debt Relief Program does not apply to the PPP loans, EIDL, or the EEIG.
The SBA is also unable to help you access the Debt Relief Program and recommends you contacting your loan servicing office directly.
Before relying on the SBA to cover your fees, check with your lender first to ensure that you qualify for the program so that you don’t miss any of your payments.
If you’d like to discuss how to leverage SBA’s debt relief program and other SBA resources, contact us to schedule a hassle-free consultation.