- Enhancements of loans through U.S. Small Business Administration in place through Sept. 30
- Changes include higher loan guarantees and lending caps
- The SBA will also cover up to $9,000 in monthly principal and interest payments and fees for up to three months
Summary by Dirk Langeveld
Several standard U.S. Small Business Administration loan products were enhanced as part of the Economic Aid Act passed last year. The enhancements offer more favorable terms and assistance to business owners, who can take advantage of them through Sept. 30.
Principal and interest payments
The SBA is covering two or three months of principal and interest loan payments as well as any associated fees, up to $9,000. Conditions vary based on factors such as when the loan was approved, issued, or disbursed, and whether the borrower deferred payments.
Borrowers who took out a loan any time after Feb. 1, 2021, including any loans originating before the enhancements expire on Sept. 30, can receive three months of principal and interest payments as well as any associated fees. This enhancement is limited to one loan.
Any amount beyond $9,000 must be paid by the borrower. If the borrower opts to continue making regular payments, this money can be put toward future loan payments.
Guarantee and annual guarantee fees, which typically fall between 2 percent and 3.5 percent, are being waived through Sept. 30 for 7(a) and 504 loans.
SBA guarantees have increased for certain loan products. Guarantees on SBA Express loans under $350,000 have increased from 50 percent to 75 percent, while the 7(a) loan guarantee is up to 90 percent.
The maximum SBA Express Loan has increased from $350,000 to $1 million. Starting on Oct. 1, the cap will drop to $500,000.