25-YR FIXED RATE
20-YR FIXED RATE
10-YR FIXED RATE
relief for small businesses
economic aid act
sba fee eliminations
Now Limited to Refinance Loans Only
Update (8/27/21) – Fee eliminations and Section 1112 SBA payment relief will no longer be available for the regular 504 loan program. These Economic Aid Act provisions will however, remain available for loans approved under the 504 refinance (without expansion) loan program until September 30, 2021, or until funds are exhausted.
Given the unprecedented volume of 504 lending this year, the regular 504 Loan Program has reached its FY21 congressionally authorized cap of $7.5 billion. Absent congressional to provide additional authority for the 504 Loan Program, SBA will be unable to approve new 504 loans until October 1, 2021, when the new fiscal year starts.
However, the SBA 504 Refinance program has a separate authorization of $7.5 billion and is not in danger of reaching its cap before the September 30, 2021, deadline. Therefore, these loans can still be approved by SBA and will still be eligible to receive the Economic Aid Act provisions (subject to availability) until the funding authorization for SBA fee eliminations expires on September 30, 2021.
Background – On December 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the CARES Act) was enacted to provide emergency and immediate national economic relief and assistance across the American economy, including to small businesses.
With respect to 504 refinancing projects for which an application is approved by September 30, 2021, the following 504 fees are eliminated to the extent the cost of the fee eliminations is offset by appropriations (in other words…when the money set aside by Congress is used up):
- The Third Party Lender Fee Participation Fee – 0.5% of the first mortgage
- The CDC processing fee – 1.5% of the net debenture proceeds
See SBA Procedural Notice 5000-20085 for more details.
Download Our Quick Reference Guides:
SBA Fee Elimination for 504 Refinance Loans
504 Debt Refinance Enhancements
Debt Refinancing with SBA 504 – Quick Reference Guide
Relief provided in the Economic Aid Act is not a loan or deferment – the payments are simply made by SBA on behalf of the borrower. Payments made by SBA under the CARES Act and Economic Aid Act will also not be treated as taxable income for federal income tax purposes. State tax implications may apply – always check with your tax advisor.
As with any regulations, case-specific rules and guidelines may apply.
Please contact us if you have any questions about your eligibility.
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