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SBA Information Notice: Temporary Increase to SBA Express Maximum Loan Amount and Permanent Changes to Fee Relief for SBA Express loans to Veteran-Owned Small Businesses in the CARES Act

Summary

SBA Information Notice, control no. 5000-20025, effective May 7, 2020, addressed to SBA employees and SBA Express Lenders, on CARES Act (P.L.116-136) changes to the SBA Express Loan Program. It explains that Section 1102(c) of the CARES Act amends 15 U.S.C. 636(a)(31)(D) to raise the SBA Express maximum loan amount from $350,000 to $1,000,000 for loans approved from March 27, 2020 through December 31, 2020, after which it reverts. The notice also announces permanent changes to fee relief for SBA Express loans to veteran-owned small businesses.

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Full text

                       SBA Information Notice

TO: All SBA Employees and SBA Express Lenders                                       CONTROL NO.: 5000-20025

SUBJECT: Temporary Increase to SBA Express
Maximum Loan Amount and Permanent Changes to                                        EFFECTIVE: May 7, 2020
Fee Relief for SBA Express loans to Veteran-
Owned Small Businesses in the CARES Act



On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic
Security Act (“CARES Act”) (P.L.116-136). This Notice announces the changes to the SBA
Express Loan Program made by the CARES Act.

SBA Express Maximum Loan Amount Temporarily Increased to $1,000,000 through December
31, 2020:

   •   Section 1102(c) of the CARES Act amends Section 7(a)(31)(D) of the Small Business
       Act (15 U.S.C. 636(a)(31)(D)) by temporarily increasing the maximum loan amount
       under the SBA Express Loan Program from $350,000 to $1,000,000 for loans approved
       from March 27, 2020 through December 31, 2020. The maximum loan amount under the
       SBA Express Loan Program will automatically revert to a maximum of $350,000
       effective January 1, 2021. It is important to note that this temporary increase to the SBA
       Express maximum loan amount does not apply to Export Express loans (Section 7(a)(34)
       of the Small Business Act), which remains at a maximum loan amount of $500,000.

   •   SBA Express loans approved prior to March 27, 2020 may not be increased to a total loan
       amount of more than $350,000. If the borrower needs additional funding, the borrower
       must request a new loan.

   •   SBA Express loans approved on or after March 27, 2020 may be increased up to a
       maximum of $1,000,000 in the aggregate for all outstanding SBA Express loans to the
       Borrower (and its affiliates). After December 31, 2020, an increase to an SBA Express
       loan that would bring the aggregate SBA Express loan approval amount(s) to a level
       exceeding $350,000 will not be permitted.




PAGE 1 of 2                                                                                 EXPIRES: 5-1-2021
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
   •   A Borrower (including its affiliates) may have multiple SBA Express loans at one time;
       however, the aggregate SBA Express loan amount for all outstanding SBA Express loans
       may not exceed $1,000,000 during the period from March 27, 2020 through December
       31, 2020.

   •   Lenders are reminded that, in accordance with SOP 50 10 5(K), Subpart B, Chapter 2,
       Paragraph V.E.9., a Lender may not refinance its own existing SBA debt (including an
       existing SBA Express loan) with an SBA Express loan. Existing SBA-guaranteed loans
       may not be refinanced under SBA Express. The only exceptions are:

       If the transaction is the purchase of an existing business that has an existing SBA loan
       that is not with the requesting SBA Express Lender; and

       If the Applicant needs additional financing and the existing Lender is unable or unwilling
       to increase the existing SBA loan or make a second loan, and the new loan will meet the
       10 percent improvement to debt service coverage requirement, as applicable.

Upfront Guaranty Fee Relief for SBA Express loans to Veteran-Owned Small Businesses:

       Section 1102(d) of the CARES Act amends Section 7(a)(31)(G) of the Small Business
       Act (15 U.S.C. 636(a)(31)(G)) by removing the exception provision in paragraph
       7(a)(31)(G)(ii) for guarantee fee waivers for veteran-owned businesses. As a result of
       this change to the Small Business Act, for all SBA Express loans to veteran-owned small
       businesses approved on or after March 27, 2020, the upfront guaranty fee will
       permanently be zero.

Questions
If you have any questions regarding this notice, please contact your local SBA field office or the
service centers. To locate your local office or service center, please go to
https://www.sba.gov/about-sba/sba-locations.



Dianna L. Seaborn
Director
Office of Financial Assistance




PAGE 2 of 2                                                                                 EXPIRES: 5-1-2021
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

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