We wanted to relay the latest information we have received from the U.S. Small Business Administration (SBA) regarding a reduction in the debt relief benefits originally authorized under the Economic Aid Act enacted December 27, 2020.
In Section 325 of the Economic Aid Act, Congress appropriated $3.5 billion to carry out extended CARES Act Section 1112 payment subsidies. SBA borrowers should have received a letter from SBA dated January 27, 2021, detailing the additional debt relief benefits that had been authorized by Congress based on the approval date of your SBA loan.
SBA has since determined that the funds appropriated by Congress will be insufficient to make all payments for the periods previously authorized. Consequently, SBA developed an Adjustment Plan to proportionately reduce the number of months of payment subsidies provided for each specific category of loans.
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. For ease of reference, please refer to a flow chart Guide to Section 1112 Payments covering the changes in SBA’s Adjustment Plan.
Please note: if your SBA loan was approved prior to March 27, 2020 and your Second Round of Section 1112 payments began in February 2021, ACH debit transactions will resume on April 1, 2021.*
*If your business falls into one of the “underserved” industries based on the NAICS code, according to SBA records, your loan may be eligible to receive three additional Second Round Section 1112 payments that will begin April 1, 2021.
Questions About Your SBA Loan?
If you have questions/concerns about your existing SBA Loan and its corresponding debt relief benefits, we’re here to help. Feel free to reach out to us at 217-241-3000, or contact any member of our Servicing Team:
- Becky Minett | 217-241-4638 | minett@growthcorp.com
- Randy Neumann | 217-241-3636 | neumann@growthcorp.com
- Braden Pope | 217-241-3635 | pope@growthcorp.com
Thank you for your continued trust in Growth Corp…we will keep you informed if anything else changes.