Professional Accounting Blog

    Accounting For Your Prosperity

    SBA Guidance for Coronavirus Economic Impact

    Posted by Dan Prendergast on Mar 16, 2020 4:05:47 PM

    Economic Injury Disaster Loan Program

    The Small Business Administration (SBA) announced this week the availability of an Economic Injury Disaster Loan program.  The SBA has announced that they are working directly with state governors to provide targeted, low interest loans to small business and non-profits that have been severely impacted by the Coronavirus (COVID-19). The loan program will provide working capital loans of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue that businesses are currently experiencing.

    SBA-guidance-for-coronavirus-economic-impact

    To learn about the loan program go to https://www.sba.gov/page/guidance-businesses-employers-plan-respond-coronavirus-disease-2019-covid-19

    Relief for existing 7(a) and 504 SBA loans

    The SBA issued an information notice on 3-10-20 to remind SBA lenders of their authority to grant relief to SBA borrowers in the form of deferred payments.  Deferral periods are as follows for the listed loan programs:

    • 7(a) loans- 6-month deferral for loans not sold on the secondary market.  For loans sold on the secondary market a 90-deferral period is available.  Extending the deferral period requires investor consent
    • 504 loans- limited to the lesser of a 6-month deferral or 20% of the original amount

    Borrowers interested in applying for the deferments should contact their commercial bank for the 7(a) deferment or the Certified Development Company (CDC) administering their 504 loan. Please contact us with any questions.

    Topics: Tax Planning & Strategies, Small Business, Accounting & Auditing, Accounting and Tax Resource, COVID-19

    Dan Prendergast

    Written by Dan Prendergast

    Dan Prendergast is a Vice President at Meaden & Moore. He offers over two decades of experience working with closely held and entrepreneurial companies.

    Subscribe to Email Updates

    New Call-to-action
    New Call-to-action
    New Call-to-action
    New Call-to-action