There have been several amendments to the original Coronavirus Aid, Relief and Economic Security Act (the CARES Act) since it was enacted on March 27, 2020. It is important for small business owners to be informed of these changes and understand how they may impact their business. This post briefly summarizes these recent changes and can be used as a guide as you determine how your small business may be impacted.
In January 2021, the U.S. Small Business Administration (SBA) sent out a letter to notify borrowers that they may be eligible for additional debt relief payment. You can view a copy of this letter here.
In February 2021, the SBA announced to lenders that the amount appropriated for the debt relief payments under the Economic Aid Act was insufficient. As a result, the SBA amended loan eligibility and number of payments for most SBA loans. See the notice here.
The breakout summaries below highlight the changes made between these two announcements and how SBA loan payments are impacted.
Loans that received SBA approval on or before September 27, 2020, fully disbursed on or after September 28, 2020, and have not yet received Section 1112 payments:
| Original Communication (January 2021) | New Communication (February 2021) |
| SBA will make six (6) months of payments | SBA will make three (3) months of payments once your loan has been fully disbursed. |
Loans that received SBA approval before March 27, 2020:
| Original Communication(January 2021) | New Communication(February 2021) |
| SBA will make three (3) months of payments | SBA will make two (2) months of payments, beginning with your February 2021 payment, or if your loan is on deferment your first payment will be made after your deferment period ends. |
Loans that received SBA approval before March 27, 2020 AND have a NAICS code beginning with 61, 71, 72, 213, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812:
| Original Communication (January 2021) | New Communication (February 2021) |
| SBA will make three (3) months of payments | SBA will make two (2) months of payments, beginning with your February 2021 payment, or if your loan is on deferment your first payment will be made after your deferment period ends. |
| SBA will make an additional five (5) months of payments immediately following the end of the two-month payment period. | SBA will make an additional three (3) months of payments immediately following the end of the two-month payment period. |
Loans that received SBA approval between March 27, 2020 and September 27, 2020 AND you did not previously receive Section 1112 Payments:
| Original Communication (January 2021) | New Communication (February 2021) |
| SBA will make three (3) months of payments, beginning with your February 2021 payment, or if your loan is on deferment your first payment will be made after your deferment period ends. | No change in original communication. |
Loans that received SBA approval between March 27, 2020 and September 27, 2020 AND received Section 1112 Payments:
| Original Communication (January 2021) | New Communication (February 2021) |
| SBA may make limited payments, subject to availability. | SBA will NOT make additional payments. |
Loans that received SBA approval between February 1, 2021 and September 30, 2021:
| Original Communication (January 2021) | New Communication (February 2021) |
| SBA will make six (6) months of payments | SBA will make three (3) months of payments, after your loan has fully disbursed. |
NOTE: Loans that received SBA approval between September 28, 2020 and January 31, 2021 are not eligible for any assistance under Section 1112 of the CARES Act.
Are you a CRF borrower and have a specific question about how these changes impact your loan? We’re here to help! Please contact your CRF Representative or our Loan Servicing Team if you have any questions.
The terms and information outlined above are subject to change upon further rulemaking or guidance from the U.S. Small Business Administration (SBA) and the U.S. government. If you have specific questions about your eligibility to receive payments under Section 1112 debt relief program, please review the Control Notices or seek independent legal or professional advice.
