SBA Procedural Notice: 504 Debt Refinancing Second Extension
Summary
SBA Procedural Notice, Control No. 5000-808223, effective March 30, 2021, to SBA employees, certified development companies and third-party lenders. It is a second extension, through June 30, 2021, of temporary guidance on eligibility for 504 debt refinancing with expansion for applicants granted loan deferments due to the COVID-19 emergency. It extends the guidance SBA issued in Procedural Notice 5000-20069, effective December 14, 2020.
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Full text
SBA Procedural Notice
TO: All SBA Employees, Certified Development CONTROL NO.: 5000-808223
Companies and Third-Party Lenders
SUBJECT: Second Extension of Temporary EFFECTIVE: March 30, 2021
Guidance through June 30, 2021 on Eligibility for
504 Debt Refinancing with Expansion for
Applicants Granted Loan Deferments Due to
COVID-19 Emergency
The purpose of this Notice is to extend the temporary guidance that SBA issued in SBA
Procedural Notice 5000-20069, effective December 14, 2020, with respect to the eligibility of
a loan for refinancing under SBA’s 504 debt refinancing with expansion program when the
loan that the applicant is seeking to refinance was granted a deferment due to the COVID-19
emergency. The guidance provided in SBA Procedural Notice 5000-20069 is in effect through
March 31, 2021 and, with this Notice, SBA is extending this guidance through June 30, 2021
with respect to the debt refinancing with expansion program.
SBA first provided guidance with respect to the eligibility of loans for debt refinancing in
SBA Procedural Notice 5000-20039, effective July 24, 2020, after becoming aware that
borrowers had loans that were granted deferments as a direct result of the public health
emergency created by the COVID-19 pandemic, and that some of these borrowers were
interested in refinancing their debt under SBA’s 504 debt refinancing programs. See 13 CFR
120.882(e) (refinancing with expansion) and 120.882(g) (refinancing without expansion).
At the time that SBA Procedural Notices 5000-20039 and 5000-20069 were issued, both debt
refinancing with expansion and debt refinancing without expansion required the applicant to
have been current on all payments due on the debt to be refinanced for not less than 1 year
before the date of the application (without expansion) or for not less than 1 year before the
date of the refinancing (with expansion). The prior Notices, therefore, applied to both debt
refinancing programs and allowed a loan that is currently on deferment, or that was granted a
deferment for some period of time in the prior 12 months, to qualify for refinancing under
SBA’s 504 debt refinancing programs under certain conditions.
However, under the amendments made to the debt refinancing without expansion program by
Section 328(a)(2) of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues
PAGE 1 of 2 EXPIRES: 3-1-22
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
Act, Pub. L. 116-260, applicants for debt refinancing without expansion are no longer required
to be current on all payments due for not less than 1 year before the date of the application.
Thus, it is no longer necessary to apply the guidance provided in this Notice to the debt
refinancing without expansion program.
With this Notice, SBA is extending the conditions (described below) to applications for 504
debt refinancing with expansion that are submitted on or before June 30, 2021:
• An application for debt refinancing with expansion that involves a loan that was
granted a deferment in the 12 months prior to the date that the application was
submitted must be processed on a non-delegated basis through the Sacramento Loan
Processing Center;
• The applicant must bring itself current on all the payments that were deferred prior to
the loan being approved for debt refinancing;
• The borrower must include a statement in the application that the deferment was
granted due to the borrower being adversely affected by COVID-19; and
• The applicant must otherwise be current on all payments due as required by 13 CFR
sections 120.882(e)(6).
Questions
Questions concerning this Notice may be directed to the Lender Relations Specialist in the local
SBA Field Office.
Dianna L. Seaborn
Director
Office of Financial Assistance
PAGE 2 of 2 EXPIRES: 3-1-22
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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