SBA 504 Loan - new flexibility for working capital & fixed, low rates
SBA 504 loans are designed for equipment and building purchases, however, the program is becoming increasingly flexible in response to small business needs. A few years back SBA allowed borrowers to refinance existing mortgage debt that had not been 504 loans with building and equipment as collateral. Now they have further loosened the use of funds to permit some working capital out of the refinancing. Interest rates are near the lowest point ever and fixed for the life of the loan! They may also be assumed if a current owner wants to sell in the next 10 years and pass along a lower rate. If you would like to explore this program or other financial options for your business, feel free to request a meeting with our Access to Capital Business Advisor, Greg McFetridge, or your current SBDC business consultant.
PPP Appeals Change
Under the original guidelines from the SBA, any unforgiven amounts were required to convert to repayment terms within 10 months of the end of their eligible period, even if the unforgiven amount was being appealed. However, a new interim rule clarifies that small businesses that are currently waiting for an appeal decision can defer payment on their loans. Furthermore, the interim rule is retroactive for all PPP loans being appealed.
This “reprieve” should prove beneficial for clients that are appealing forgiveness decisions and is the latest in a series of recently-announced changes to the forgiveness process. The goal of these changes is to speed forgiveness, for there are still millions of PPP borrowers that have not applied for forgiveness. If there are any network clients that have not sought forgiveness, they should be strongly encouraged to do so ASAP. If they do not do so, they will be responsible for repaying the amount they received. There is no automatic forgiveness.
Federal Government Reviews PPP and EIDL Accounts
As a result of the presence of “bad actors” in both the PPP and EIDL programs, the federal government is stepping up its review of recipients for both initiatives. The SBA is now working with the IRS, FBI, the FDIC, and SSA to investigate potential fraud to both programs. In addition, the Justice Department is hiring additional staff that will be dedicated to prosecuting False Claims Act fraudsters.
Even though there may not have been fraud involved, borrowers must be able to prove that all the funds received were properly documented, and that their financial records are now fair game for the government to investigate everything. This means that the accounting was performed correctly and that every penny is accounted for.
The SBA Announces Opening of Paycheck Protection Program Direct Forgiveness Portal
On July 28, 2021, the SBA launched a streamlined application portal to allow borrowers with Paycheck Protection Program loans of $150,000 or less through participating lenders to apply for forgiveness directly through the SBA.
For more information, please visit the announcement from the SBA.
Shuttered Venue Operators Grant
SBA announced that the Shuttered Venue Operators Grant program has awarded over $7.5 billion in total funding to more than 10,000 live venues and related businesses across America and U.S. territories.
The SVOG portal remains open and funding is still available for all eligible applicants. However, do not wait. Submit your application as soon as possible.