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SBA debt relief (7A and 504)
Posted on 4/2/20 at 9:36 pm
Posted on 4/2/20 at 9:36 pm
Anybody know much about the Debt Relief Program for SBA loans? As I read it (and my banker and accountant), the SBA is not deferring these payments. They are MAKING these payments.
Seems to be a very underreported thing, but that saves me 34K per month if it’s actually true.
My banker telling me they have been instructed to reverse payments for any businesses that have made payments since March 27.
Seems to be a very underreported thing, but that saves me 34K per month if it’s actually true.
My banker telling me they have been instructed to reverse payments for any businesses that have made payments since March 27.
5
Posted on 4/2/20 at 9:37 pm to Ag Zwin
Correct. Banks are turning off auto-pay even.
Posted on 4/2/20 at 9:41 pm to Ag Zwin
Your CPA is correct.
Posted on 4/2/20 at 9:43 pm to Ag Zwin
Existing 7a and 504's have a 6 month payment "deferral" where the gov will step in and make the payments for you.
I have read in places that if you elect to do this, you are ineligible for the EIDL and PPP programs; however, I have also seen legislation, and heard Mnuchin say in his own words, go apply for the PPP program no matter what.
I have read in places that if you elect to do this, you are ineligible for the EIDL and PPP programs; however, I have also seen legislation, and heard Mnuchin say in his own words, go apply for the PPP program no matter what.
Posted on 4/2/20 at 9:46 pm to Ag Zwin
Disaster loans from previous events have been auto deferred for 12 months
Posted on 4/2/20 at 9:51 pm to catfish 62
quote:
I have read in places that if you elect to do this, you are ineligible for the EIDL and PPP programs;
I’ve not seen that anywhere. Considering they are doing the payments unilaterally, I have a hard time believing that.
Posted on 4/2/20 at 9:58 pm to Ag Zwin
quote:
I’ve not seen that anywhere. Considering they are doing the payments unilaterally, I have a hard time believing that.
I don't know if you've ever deal with the SBA directly, but the amount of fumbling and changing of the "guidelines" they have put out there since the CARES Act was signed has been monumental.
Posted on 4/2/20 at 9:58 pm to Ag Zwin
Just make sure you only use the money for those couple items they allow. Also, you must retain a certain percentage of your employees or it could back fire on you. I'm going to use it but I'm scared knowing that people will make more money staying home than working. Slippery slope for me.
Posted on 4/3/20 at 7:54 am to catfish 62
quote:
go apply for the PPP program no matter what
Yes. Applications start today. Today will be busy. If you bank is not ready, go find a bank that is ready.
From what I understand, this is how PPP will work:
- 2.5x average monthly payroll up to $10 million
- 2 year term*
- 6 months payment deferral as mentioned
- 1% fixed rate
- Prepayment in full with no penalty
*This can be forgiven in full if the funds are used as intended (payroll, mortgage, rent) and documentation will need to be provided.
Posted on 4/3/20 at 7:57 am to wareaglepete
Do you have to use the bank you have your business bank accounts with?
Posted on 4/3/20 at 8:00 am to Sull
Not that I am aware of. If you use a different bank, I think you would just need to get them documentation of your payroll from the other bank operating accounts. It may be easier to use your current bank.
Posted on 4/3/20 at 8:04 am to Sull
Most banks I have talked to require you to open a checking account with them.
Posted on 4/3/20 at 8:09 am to Ag Zwin
Also, you do not need to prove a need with these programs. The deferral and no prepayment penalty is big because if you aren't hurting now, you can get the funds, hold them just in case things deteriorate, and then just pay back in 6 months with no penalty and without making any payments.
Also, I am not sure of the specifics, but there are special rules around hospitality, franchises, and not-for-profits. Just because you run a location for a larger entity that may be way over the qualifying number of employees limit, you could still qualify.
Also, I am not sure of the specifics, but there are special rules around hospitality, franchises, and not-for-profits. Just because you run a location for a larger entity that may be way over the qualifying number of employees limit, you could still qualify.
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