February 3, 2021
SBA Loan Forgiveness
On December 27, 2020, the Economic Aid Act was enacted, which provides additional months of debt relief payments for certain SBA borrowers.
If your loan was approved on or before September 27, 2020, and was funded after September 28, 2020, it is eligible to receive debt relief payments by the SBA for 6 months. These are considered first-round Section 1112 payments.
If your loan was approved before March 27, 2020, SBA will make debt relief payments for 3 months, beginning with your February 1, 2021 payment. These payments are referred to as second-round Section 1112 payments and will be capped at $9,000 per month.
For loans that are approved between February 1, 2021, and September 30, 2021, second round payments will be made for 6 months and will be capped at $9,000 per month.
If your SBA loan was approved before March 27, 2020, and your business classification is in one of the hardest-hit industries, you will receive an additional 5 months of debt relief payments after the first and second round payments. The hardest-hit industries fall within the North American Industry Classification System (NAICS) codes that include the following:
• 61- Educational Services
• 71- Arts, Entertainment, and Recreation
• 72- Accommodation and Food Services
• 213- Support Activities for Mining
• 315- Apparel Manufacturing
• 448- Clothing and Clothing Accessories Stores
• 451- Sporting Good, Hobby, Book, and Music Stores
• 481- Air Transportation
• 485- Transit and Ground Passenger Transportation
• 487- Scenic and Sightseeing Transportation
• 511- Publishing Industries
• 512- Motion Picture and Sounds Recording Industries
• 515- Broadcasting
• 532- Rental and Leasing Services
• 812- Personal and Laundry Services
Borrowers will not need to apply for this assistance. The SBA provides this assistance automatically. The SBA works with lenders to provide loans to small businesses. If you are considering an SBA loan, now is the time to apply. Wilke & Associates, CPAs & Business Advisors can help with the loan process.
Our team can help prepare financial statements, assist in the preparation or review of personal financial statements, provide lender contacts, and provide your lender with other financial information to complete your application. Contact us today for an appointment.
Amanda is a general ledger manager and business advisor at Wilke & Associates. She currently serves closely-held businesses using her prior experience as a corporate accounting manager in the manufacturing industry. Her resume includes serving clients in various business sectors to include distribution, logistics, real estate, and pension plans.