Small Business Debt Relief Program
The SBA will automatically pay the principal, interest, and fees of current 7(a) loans for a period of six months.
The SBA will also automatically pay the principal, interest, and fees of new 7(a) loans issued prior to September 27, 2020.
Program Details
Who is Eligible:
All small businesses, non-profits, veterans organizations, tribal businesses, ESOPs and cooperatives with less than 500 employees, sole proprietorships, self-employed individuals, and independent contractors
Loan Details:
- Maximum Amount: Up to $10 million or 2.5x average payroll cost, whichever is less.
- Interest rate of 0.5%
- Maturity of 2 years
- First payment deferred for six months
- 100% guarantee by SBA
- No collateral
- No personal guarantees
- No borrower or lender fees payable to SBA
Loan Forgiveness:
If proceeds used for payroll costs and other designated business operating expenses [mortgage/rent, utilities] in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs)
How to Apply
Applications for small business businesses and sole proprietors open April 3. Applications for independent contractors and self-employed open April 10. You will apply through your locally authorized bank and non-bank lenders. This will typically be your existing banking partner.