SBA adjusts payments for certain loans, issues new PPP data
The Small Business Administration is adjusting payments of principal and interest for its 7(a), 504, and microloan programs after determining that the $3.5 billion appropriated under section 1112 of the CARES Act is insufficient.
New loans approved after Feb. 1, 2021, will now only receive three months of principal and interest payments, rather than the six months that was previously provided. Other loans, depending on their approval date and full disbursement date, may also be impacted; see the procedural notice for full details.
The SBA issued procedural notices related to the issue last month, and the change took effect this week. Lenders do not need to take any action; the SBA will update its systems to reflect the changes.
In addition, the SBA released new paycheck protection program (PPP) loan data. As of Feb. 15, 1.6 million loans have been approved in 2021, totaling almost $126 billion. Most loans approved this year are second draw loans to businesses with 10 or fewer employees.
Credit unions with less than $10 billion in assets have approved almost 56,000 PPP loans in 2021, totaling $2.7 billion. The number of these credit union lenders also continues to increase, now at almost 800.