CARES ACT (PART 5): ASSISTANCE FOR EXISTING SBA 7(A) BORROWERS

The CARES Act (PL 116-136) contains several provisions to assist existing SBA 7(a) borrowers. 

- The CARES Act relieves borrowers of any obligation to pay the principal, interest, and associated fees owed on a 7(a) loan in regular servicing status for 6 months;

- The time period begins with the first payment due on the loan after March 27, 2020. The SBA will pay this payment;

- If the borrower makes the payment to the lender after March 27, 2020, the lender is required to inform the borrower that the borrower has the option to have the payment refunded or applied to reduce the existing loan balance.

If you have a questions about the CARES ACT or issues affecting your current loans in this crisis, contact Allen Stahl + Kilbourne

By Derek Allen and James Kilbourne

Updated: April 1, 2020

 

Any statements contained herein do not constitute a formal legal opinion and should not be relied upon as such. These articles are intended for general informational purposes only.  Nothing expressed shall be grounds for the creation of an attorney-client relationship.  Our attorneys can give legal advice only in the context of an attorney-client relationship after a conflict check, the execution of a representation agreement and a discussion of the specific information and unique issues of your particular circumstances.

The situation surrounding COVID-19/coronavirus is changing constantly; as a result, any discussions that might take place may not necessarily reflect the latest information regarding recently-enacted, or pending or proposed legislation or guidance that could override, alter or otherwise affect existing legal analysis.

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