SBA Lending Relief for Small Business
As the cliché goes, “the devil is in the details”.
But when those details are buried in a 5,593 page “kitchen sink” bill – combining relief for individuals, help for businesses, and routine government spending – it helps to have a guide.
Fortunately, for Small Business Administration borrowers and lenders Philadelphia Inquirer business columnist Gene Marks highlighted the “needle in the haystack” for local small businesses that get funding through local development agencies, such as the Bucks County Economic Development Corporation.
(In my firm’s experience, the BCEDC has always been a great guide for local firms as well.)
As stated in Marks’ January 5 column (www.inquirer.com/business/small-business/stimulus-ppp-loan-sba-debt-savings-restaurants-hotels-20210105.html), SBA borrowers can get the federal government to pay several months of interest on their loans – even existing loans, as well as new ones.
(Technically, the relief applies to the SBA’s 7(a), 504 and Microloan programs.)
Moreover, as small business advisors know, many bank lenders still prefer SBA loans, because of the generous fees earned and the limited financial risk.
Even better, firms that obtained other forms of COVID-19 relief, such as a forgivable Paycheck Protection loan, or low interest Economic Injury Disaster Loan, also qualify for this program if they meet the SBA’s general standards.
In fact, one new requirement for a PPP loan – proof of a revenue decline – is not required.
In other words, if you have nursed your business through the worst of the initial lockdown, but could still help to survive until business returns to normal, you still qualify for this program.
Benefits of the new program - capped at $9,000.00 per month – include waivers of both borrower and lender fees, and more generous SBA guarantees.
Although such “free money” may sound too good to be true, no small business should pass up low or no-cost cash relief as a bridge to a “normal” post-vaccine world.
Therefore, contact an approved SBA lender, or your local economic development authority, to take advantage of this program, before funding is exhausted.
Copyright 2021 Stanley P. Jaskiewicz, Esquire