SBA Procedural Notice: Temporary Guidance on Eligibility for 504 Debt Refinancing with or Without Expansion for Applicants Granted Loan Deferments Due to COVID-19 Emergency
Summary
SBA Procedural Notice, Control No. 5000-20039, effective July 24, 2020, to SBA employees, certified development companies and third-party lenders. It gives temporary guidance on eligibility for 504 debt refinancing, with or without expansion, for applicants granted loan deferments due to the COVID-19 emergency. It recalls the emergency declaration of March 13, 2020 and states that SBA is aware that borrowers may have loans that were granted deferments in recent months.
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SBA Procedural Notice
TO: All SBA Employees, Certified Development CONTROL NO.: 5000-20039
Companies, and Third-Party Lenders
EFFECTIVE: July 24, 2020
SUBJECT: Temporary Guidance on Eligibility for
504 Debt Refinancing with or Without Expansion
for Applicants Granted Loan Deferments Due to
COVID-19 Emergency
On March 13, 2020, President Trump declared the ongoing Coronavirus Disease 2019
(COVID-19) pandemic of sufficient severity and magnitude to warrant an emergency declaration
for all States, Territories, and the District of Columbia. SBA is aware that borrowers may have
loans that have been granted deferments in the past few months as a direct result of the COVID-
19 emergency, and that some of these borrowers are interested in refinancing their debt under
SBA’s 504 debt refinancing programs. See 13 CFR 120.882(e) and 120.882(g). To refinance a
loan under SBA’s 504 debt refinancing programs, including both with and without expansion,
the applicant must 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 purpose of this Notice is to provide temporary guidance regarding the eligibility of a loan for
debt refinancing when the loan that the applicant is seeking to refinance was granted a deferment
during the prior 12 months due to the COVID-19 emergency. Through December 31, 2020, a
loan that is currently on deferment, or that was granted a deferment for some period of time in
the prior 12 months, will qualify for refinancing under SBA’s 504 debt refinancing programs
under the following conditions:
PAGE 1 of 2 EXPIRES: 7-1-21
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
• The applications for debt refinancing, whether with expansion or without expansion, that
involve loans that were granted deferments in the prior 12 months 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 deferment on the loan to be refinanced must have been granted on or after March 1,
2020, and 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) and 120.882(g)(15)(vii).
Questions
Questions concerning this Notice may be directed to the Lender Relations Specialist in the local
SBA Field Office. Local SBA Field Offices can be found at https://www.sba.gov/tools/local-
assistance/districtoffices.
Dianna L. Seaborn
Director
Office of Financial Assistance
PAGE 2 of 2 EXPIRES: 7-1-21
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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- Original
- www.sba.gov