The new COVID Stimulus Bill signed by President Trump on December 27, 2020 brought more good news for businesses with SBA 7(a) loans. The SBA paid 6 months of payments for borrowers during 2020, and the payments on these loans are NOT going to be included in taxable income.
The bill keeps on giving – starting February 2021, the SBA will be making another 3 months of payments on SBA 7(a) loans. For specific industries that were hardest hit, there will be an additional 5 months of payments beyond the 3 months provided to all businesses. For those of you wondering if you are in the hardest hit industries, the NAICS codes included begin with 61, 71, 72, 213, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, 812, 232, or 234.
There is nothing you need to do for this benefit. The SBA will work directly with the bank who holds your loan. One limit on this benefit is a $9,000 monthly maximum loan payment the SBA will cover. If your loan payment is more than that each month, you will have to cover the amount over $9,000.
Another item to note, the current Stimulus Bill also allows for a 1-year deferment on your SBA loan payments. You would need to work with your bank if you need to take advantage of this benefit. Please reach out to our COVID team if you have any questions.
December 29, 2020