Coronavirus

SBA Automatically Defers Existing Disaster Loans To Help Borrowers

U.S. Small Business Administration

To assist borrowers who are paying back U.S. Small Business Administration loans from past disasters, SBA Administrator Jovita Carranza has put into place automatic deferment on existing SBA Disaster Loans through the conclusion of this year. Borrowers of business and home disaster loans don’t have to reach out to the agency to ask for deferment any longer, according to an announcement.

“The SBA is looking at every option and taking every action to cut red tape to make it easier for small businesses to stay in business. Automatically deferring existing SBA disaster loans through the end of the year will help borrowers during this unprecedented time,” Carranza said in the announcement. “Today’s announcement adds a list of growing actions the SBA is taking to support small businesses.”

Carranza had put forward updated criteria for states or territories looking for a coronavirus-related economic injury declaration “as part of the Trump Administration’s aggressive, whole-of-government efforts to combat the Coronavirus outbreak (COVID-19) and minimize economic disruption to the nation’s 30 million small businesses” per an announcement earlier in March.

The SBA in the past has mandated that any state or territory that has faced the impacts of a disaster offer paperwork to certify that five small businesses at a minimum have experienced “substantial economic injury” because of a disaster — and a minimum of one business in each declared country/parish. Now states and territories only have to certify that five small businesses located in the state or territory have experienced “substantial economic injury” despite the location of those companies.

And SBA disaster assistance loans are usually only available to small businesses located in counties that a governor indicates are disaster areas. Now, disaster assistance loans will be available in all of the state after an economic injury declaration with the updated criteria. The agency said in an announcement, “This will apply to current and future disaster assistance declarations related to Coronavirus.”

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