Deferments on SBA 7(a) and 504 Business Loans and Microloans
Summary
SBA Information Notice, Control No. 5000-20004, effective March 10, 2020, to SBA employees, 7(a) lenders, CDCs and microloan intermediaries, on deferments on SBA 7(a) and 504 business loans and microloans. It reminds 7(a) lenders, 504 program certified development companies and microloan intermediaries of their unilateral authority to provide temporary relief through deferred payments to existing borrowers under certain circumstances. For 7(a) business loans, it cites SOP 50 57 2 and 13 C.F.R § 120.530, under which lenders may defer payments for a stated period for borrowers with temporary cash flow issues.
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SBA Information Notice
TO: All SBA Employees, 7(a) Lenders, CDCs and CONTROL NO.: 5000-20004
Microloan Intermediaries
SUBJECT: Deferments on SBA 7(a) and 504 EFFECTIVE: March 10, 2020
Business Loans and Microloans
The purpose of this Notice is to remind 7(a) Lenders, 504 program Certified Development
Companies (CDCs), and Microloan Intermediaries of their unilateral authority to provide
temporary relief in the form of deferred payments to existing borrowers under certain
circumstances.
7(a) Business Loans
In accordance with SOP 50 57 2 and 13 C.F.R § 120.530, Lenders may assist borrowers
experiencing temporary cash flow issues by deferring payments for a stated period of time.
1. For a Loan Not Sold on Secondary Market: Lenders may grant a deferment of up to six (6)
consecutive months.
2. For a Loan Sold on Secondary Market: As outlined in the Secondary Participation
Guaranty Agreement (SBA Form 1086), Lenders may grant a one-time unilateral
deferment of up to 90 days without requiring prior investor consent. The Lender notifies
the investor through the Fiscal Transfer Agent (FTA) (Info@colsonservices.com) of the
unilateral deferment and reports the affected loan on SBA Form 1502. Lenders may
make additional loan deferments only with prior investor consent.
For additional guidance regarding deferments of 7(a) loans, please refer to SOP 50 57 2.
504 Business Loans
In accordance with SOP 50 55 and 13 C.F.R. § 120.530, CDCs may assist borrowers experiencing
temporary cash flow issues by deferring payments for a stated period of time.
The amount deferred should not exceed six (6) cumulative monthly payments or 20% of
the original loan amount, whichever is less. Unless SBA has purchased the Debenture,
the CDC must notify the Central Servicing Agent (CSA) of any deferment in order to
avoid acceleration of the Note and the need to purchase the Debenture.
PAGE 1 of 2 EXPIRES: 3-1-2021
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
For additional guidance regarding deferments of 504 loans, please refer to SOP 50 55.
Microloans
In accordance with SOP 52 00 B, Intermediaries may provide a deferment on a loan made to a
small business to ensure full repayment of the Microloan.
Microloan Intermediaries may make deferments for up to six (6) months. No deferment may cause
the life of the Microloan to extend beyond the maximum six (6) year maturity.
Questions concerning this Notice should be directed to the Lender Relations Specialist in the local
SBA Field Office.
William M. Manger
Associate Administrator
Office of Capital Access
PAGE 2 of 2 EXPIRES: 3-1-2021
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recyling Program Printed on Recycled Paper
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