Urgent message for Buyers regarding SBA 7a loans!
NAGGL has learned that as part of ongoing infrastructure negotiations, a bipartisan group of Senators identified funds remaining from the Economic Aid Act that could be withdrawn from their intended purposes to help pay for the infrastructure bill. Potentially included among those funds are the dollars currently available to pay for the 7(a) stimulus provisions. IF these remaining stimulus provision funds are used as an infrastructure offset, effective immediately upon the President signing the infrastructure package, 7(a) loans will no longer receive the increased guaranty or fee waivers. At that point, since approximately $10 million remains available to support the regular 7(a) program through the end of the fiscal year (9/30/2021), regular 7(a) lending should resume immediately WITHOUT the stimulus provisions. If this situation occurs, NAGGL is encouraging Congress and the Agency to ensure that this transition occurs seamlessly.
It is impossible to predict what the final text of the infrastructure bill will include, but given that there is a real possibility that the stimulus funds could be withdrawn, NAGGL wanted to inform you immediately. NAGGL encourages 7(a) lenders to submit complete applications ready for SBA’s assignment of loan numbers as soon as possible. Remember that, if the funds are rescinded, no loan with stimulus provisions can be approved by SBA after the President signs the legislation. This will include any applications in process at the Loan Guaranty Processing Center.
Finally, please note that Section 1112 payments are part of a separate pot of funds from the stimulus provisions, and, to our knowledge, have not been discussed as an infrastructure package offset so should not be affected. NAGGL will continue to keep you updated on any developments related to the infrastructure package that would affect 7(a) lending.
If you are in the process of purchasing a route we would recommend contacting your lender ASAP to see how fast you can get your PLP number!