Debt Relief under the CARES Act for SBA Borrowers.

One thing that has not been heavily publicized about the federal government’s stimulus and relief programs  may have a positive impact for those who have obtained SBA loans for business acquisitions or other purposes.

Under the CARES Act, in general, the SBA will make the principal and interest payments due on existing SBA loans (and new SBA loans, other than Paycheck Protection Program and Economic  Injury Disaster Loans that have separate subsidies made through September 27, 2020) for a period of six months.  While this subsidy is conceptually for businesses harmed by the COVID-19 Pandemic, the Act includes language that makes it clear that it is the sense of Congress that everyone has been harmed and would qualify.

The SBA has not released any enabling procedures.  We are unsure at this point if affirmative actiion on the part of borrowers will be required to receive this subsidy.

Here is a link to a fact sheet, which includes the text of Section 1112 of the CARES Act covering the loan subsidy program.  If you have an existing SBA loan and haven’t heard from your lender abiout this sectioin of the Act, we suggest you reach out to them immediately.