25-YR FIXED RATE
20-YR FIXED RATE
10-YR FIXED RATE
relief for small businesses
economic aid act
sba payment subsidies
FEBRUARY 1, 2021 - SEPTEMBER 30, 2021
What are Section 1112 Payments?
On March 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. Section 1112 of the CARES Act authorized SBA to pay, for a six month period, the principal, interest and associated fees that borrowers owe on covered 504 loans, 7(a) loans and Microloans. The initial availability of this debt relief expired on September 27, 2020 (hereafter “First Round Section 1112 Payments”).
With the enactment of the Economic Aid Act on December 27, 2020, Congress amended section 1112 to authorize a second round of Section 1112 payments, which will cover the principal, interest, and associated fees that borrowers owe on covered loans, subject to availability (hereafter “Second Round Section 1112 Payments”). The terms and eligibility are case-specific, so please refer to SBA Procedural Notice 5000-20095 for more details, or contact any member of our team.
- The debt relief payments are not a loan or a deferment. The payments will be forgiven.
- You do not have to apply for this…it is automatic.
- For 504 Loans, the debt relief only applies to the 504 portion of the financing. The first mortgage loan is through a bank, so borrowers should contact their lender if they need assistance with the first mortgage.
- Any past or future payment subsidies made on behalf of borrowers will not be treated as taxable income for federal tax purposes. However, borrowers are advised to check with their tax advisors, particularly regarding any possible state tax implications. Please see SBA Procedural Notice 5000-20087.
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 will also not be treated as taxable income for federal income tax purposes. State tax implications may apply – always check with your tax advisor.
DECEMBER 27, 2020 - SEPTEMBER 30, 2021
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 each 504 project for which an application is approved beginning on December 27, 2020, and ending on 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.
Purchase a Building
Construct a New Facility
Renovate Your Current Property
Purchase Heavy Machinery or Equipment
Refinance Commercial Mortgage Debt
As with any regulations, case-specific rules and guidelines may apply.
Please contact us if you have any questions about your eligibility.
Question About an Existing Loan?
Looking to Obtain a New Loan?
SBA 504 LOANS
How Will You Grow Your Business?