We congratulate our nation’s congressional leaders on coming to an agreement and passing a $2 trillion emergency spending bill to combat the economic impact of coronavirus. As we understand it, the bill includes approximately $350 billion aimed at helping small businesses weather the economic storm.
Two pieces of particular importance regarding the legislation include:
- $17 Billion for SBA payment of borrower principal, interest, and fees for a 6-month period beginning with the next payment due, for 504, 7(a) including Community Advantage, and Microloan borrowers. This is not a deferment but is actual debt forgiveness for the borrower. These SBA payments will be enacted by SBA automatically, so borrowers do not need to contact Mountain West.
- $325 Billion for the Payroll Protection Program, a special 100% guaranteed 7(a) program that includes a debt forgiveness provision. This program ends June 30, 2020. Currently, CDCs like MWSBF have not been asked to administer. Our understanding is that these loans are to be administered directly through the banks and credit unions.
For those that already have deferments in process, Mountain West will remove these from the queue as the CARES Act is more advantageous since SBA will make these payments for the borrower directly.
We are also taking calls inquiring about loans that are in for funding for April, May and June that previously were requiring a deferral and the COVID-19 form. It is our current understanding that these will be removed from the deferment queue and fall under the six-month payment provision listed above. However, we will continue to monitor and update you as SBA issues the procedure guidelines.
With just 43 employees ourselves, as a small business we too are feeling the effects of COVID-19 and share so many of the concerns of our borrowers. This package and its supporting programs for small businesses will allow us to take care of our employees, so we can continue to take care of our borrowers and provide a superior customer service experience to them and our lending partners.
As we learn more about the specifics of the bill, we will continue to share information with our friends through our communication channels.
Chief Operating Officer