In response to the coronavirus (COVID-19) pandemic, the U.S. Small Business Administration’s Buffalo District office announced it is strongly encouraging its participating 7(a) lenders and certified development companies to work with business borrowers to provide them with the flexibility they need to keep their businesses running during these difficult economic times.
As this nation’s small businesses are facing an unprecedented economic disruption, many businesses are seeking relief in meeting their financial obligations. This is especially true of small businesses hit hard by the recent economic slowdown and closures that are now unable to make payroll or rent.
On Friday, March 27, the president signed into law the CARES Act. Under the CARES Act, current SBA 7(a) borrowers are relieved of any obligation to pay the principal, interest and any associated fees that are owed on a 7(a) loan in a regular servicing status (including community advantage loans) for a six-month period beginning with the first payment due on a loan after March 27. By making this change, deferments through Dec. 31 will be automatic.
“The SBA is here to help small businesses during these difficult economic times,” said SBA Buffalo District Director Franklin J. Sciortino. “We recognize that small business owners are faced with challenging decisions right now. By providing six-months of payment relief to qualifying borrowers who are struggling, we can help small business owners free up the capital they need to maintain their businesses.”