In light of the devastation from Hurricane Helene, we want to provide some information that may be helpful in providing assistance to businesses that have been affected by Hurricane Helene.
SBA Disaster Assistance for Businesses Affected by Hurricane Helene
For 7(a) loans that are not sold on the secondary market, Lenders may:
- Grant payment deferments of up to 6 consecutive months (No SBA notification required)
- Extend loan maturity by up to 10 years to aid in the orderly repayment of the loan (E-Tran input required)
- Change the interest rate (SBA CLSC notification required)
For 7(a) loans that are sold on the secondary market:
Payment Deferment:
- Per SBA Form 1086, “Secondary Participation Guaranty Agreement,” Lenders may grant a one-time unilateral deferment of up to 90 days without requiring prior investor consent
- Lender must notify the investor through the Fiscal Transfer Agent (FTA) (FTA@sba.gov) of the unilateral deferment and report the affected loan on SBA Form 1502
- Lenders may make additional loan deferments only with prior investor consent
Any payment modifications, changes to the loan amount, interest rate changes, extensions of maturity, and deferments over 90 days (cumulative):
- Must have investor approval
- Should be done on a case-by-case basis
- Lenders should send these servicing requests directly to the FTA, with subsequent notification and evidence of investor approval forwarded to the appropriate CLSC
References for the above actions:
- See 13 CFR § 120.530-536, SBA Form 1086, SOP 50 57, and the Servicing and Liquidation Actions 7(a) Lender Matrix
Please help us spread the message about SBA Disaster Assistance:
SBA is in the process of putting together a communication outreach for Hurricane Helene disaster survivors.
Meanwhile, please help us spread the word…
- Hurricane Helene survivors may apply for SBA disaster assistance either on SBA’s webpage for assistance for survivors of Hurricane Helene, or they may apply directly through the My SBA Loan Portal.
- Both physical damage disaster loans and economic injury disaster loans are available.
- Note: the economic injury disaster loans (EIDL) are regular disaster loans, not COVID EIDL loans.
- Affected businesses may receive more than one loan for separate disasters, i.e., a business could potentially receive a physical disaster loan and an EIDL loan for Hurricane Helene and a physical disaster loan for Hurricane Debby.
Please call 800-659-2955 (TTY 711) with questions. Once a business has applied for a loan, the applicant may ask questions through the My SBA Portal.
When considering new 7(a) loan applications:
- Consistent with the regulation at 13 CFR 120.150, the applicant (including an Operating Company) must be creditworthy. Loans must be so sound as to reasonably assure repayment.
- Lenders and CDCs must use appropriate and prudent generally acceptable commercial credit analysis processes and procedures consistent with those used for their similarly-sized, non-SBA guaranteed commercial loans. Lenders, CDCs, and SBA may use a business credit scoring model.
- When approving direct or guaranteed loans, Lenders, CDCs, and SBA may consider (as applicable) the following criteria: credit score or credit history of the applicant (and the Operating Company, if applicable), its Associates and any guarantors; the earnings or cashflow of applicant; or where applicable any equity or collateral of the applicant.
Subordination of SBA Disaster loans:
For SBA Lenders requesting subordination of a lien securing an existing SBA COVID-EIDL or Disaster Loan:
- To request a lien subordination: CovidEIDLServicing@sba.gov
- COVID-19 EIDL Customer Service will provide the Application for SBA Consent form for the subordination request.
Upcoming 7(a) Connect Quarterly Update on Oct. 8th:
Please join us on Tuesday, Oct. 8th at 3:00 Eastern using this link. We will have SBA subject matter experts on all of the above to discuss this and other information and to answer questions.
Ginger Allen
Chief, 7(a) Loan Policy Division
Office of Financial Assistance
U.S. Small Business Administration