Best Practices: Recent Changes to Section 1112 Payments
The Economic Aid to Hard Hit Small Businesses, Nonprofits and Venues Act (the Economic Aid Act) contained provisions for SBA to cover up to six months of loan payments for certain 7(a) borrowers. When the Economic Aid Act was enacted, it was anticipated that the funds allocated to cover such payments may not be sufficient ... Read More
Best Practices: Determining Maturities of New 7(a) Loans Eligible to Receive Section 1112 Payments
SBA Procedural Notice 5000-20093 (the Notice), effective February 12, 2021, focuses on establishing maturities of new 7(a) loans approved between February 1, 2021 and September 30, 2021 which may be eligible for a 6-month payment subsidy of principal, interest and associated fees, subject to a $9,000 monthly cap and availability of funds. The repayment schedule ... Read More
Best Practices: SBA Releases Updated PPP Lender Processing Fee Payments and 1502 Reporting Process
Due to changes to the PPP loan program contained in the Economic Aid Act, the SBA released SBA Procedural Notice 5000-20091 on February 8, 2021, which updates the SBA Procedural Notice 5000-20036, effective July 13, 2020, concerning the PPP loan reporting process and processing fees. Lenders must still continue to report fully disbursed PPP loans ... Read More
Best Practices: 7(a) Loan Program Reduces Lender Fees and Increases Guaranty Percentages
SBA released Information Notice 5000-20084 on January 27, 2021. In accordance with the Economic Aid Act, the Notice provides for temporary changes to SBA loan programs, including higher guaranty percentages and fee reductions, to assist small businesses. A brief overview of the changes to SBA loan programs and lenders’ responsibilities follow. Guaranty Percentage Increases For ... Read More
Best Practices: Unraveling the New Payment Subsidy Guidance in the Economic Aid Act
Section 1112 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020, provided payment relief to small businesses in the form of a payment subsidy from the U.S. Small Business Administration (the “SBA”) equal to six (6) months of payments on certain SBA loans. The recently ... Read More
Best Practices: Correcting PPP Loan Discrepancies Before a Partial or Full Forgiveness Denial
Now that SBA has established regulations and guidance for PPP, and lenders have moved into the PPP loan forgiveness process, they are identifying some PPP compliance issues that may have not been fully vetted or missed during the PPP loan origination process. SBA Interim Final Rule Docket No. SBA-2020-0033 (May 22, 2020) (“IFR 2020-0033”) states, ... Read More