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Coronavirus Aid, Relief, and Economic Security Act - Existing SBA Loan Treatment
- The government will pay principal and interest for 6 months on existing SBA 7(a) loans (loans made prior to the enactment of the Act)
- No application required
- Beginning with the next payment due after the enactment of the Act
SEC. 1112. SUBSIDY FOR CERTAIN LOAN PAYMENTS
(a) DEFINITION OF COVERED LOAN.—In this section, the term‘‘covered loan’’ means a loan that is—
(1) guaranteed by the Administration under—
(A) section 7(a) of the Small Business Act (15 U.S.C. 636(a))—
(i) including a loan made under the Community Advantage Pilot Program of the Administration; and
(ii) excluding a loan made under paragraph (36) of such section 7(a), as added by section 1102; or
(B) title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.); or
(2) made by an intermediary to a small business concern using loans or grants received under section 7(m) of the Small Business Act (15 U.S.C. 636(m)).
(b) SENSE OF CONGRESS.—It is the sense of Congress that—
(1) all borrowers are adversely affected by COVID–19;
(2) relief payments by the Administration are appropriate for all borrowers; and
(3) in addition to the relief provided under this Act, the Administration should encourage lenders to provide payment deferments, when appropriate, and to extend the maturity of covered loans, so as to avoid balloon payments or any requirement for increases in debt payments resulting from deferments provided by lenders during the period of the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the Coronavirus
Disease 2019 (COVID–19).
(c) PRINCIPAL AND INTEREST PAYMENTS.—
(1) IN GENERAL.—The Administrator shall pay the principal, interest, and any associated fees that are owed on a covered loan in a regular servicing status—
(A) with respect to a covered loan made before the date of enactment of this Act and not on deferment, for the 6-month period beginning with the next payment due on the covered loan;
(B) with respect to a covered loan made before the date of enactment of this Act and on deferment, for the 6-month period beginning with the next payment due on
the covered loan after the deferment period; and
(C) with respect to a covered loan made during the period beginning on the date of enactment of this Act and ending on the date that is 6 months after such date of enactment, for the 6-month period beginning with the first payment due on the covered loan.
(2) TIMING OF PAYMENT.—The Administrator shall begin making payments under paragraph (1) on a covered loan not later than 30 days after the date on which the first such payment is due.
(3) APPLICATION OF PAYMENT.—Any payment made by the Administrator under paragraph (1) shall be applied to the covered loan such that the borrower is relieved of the obligation
to pay that amount.
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