Armanino Blog

Latest Developments In Senate Proposed SBA Stimulus Plan

March 25, 2020

On Wednesday March 25, 2020, the US Senate and the Administration came to agreement on H.R 748.

The final vote to pass the bill still needs to take place, then it needs to be approved by the president and signed into law. Shortly after that, it will be sent to the various agencies for them to determine the procedures necessary to enact the legislation and get the funds flowing to affected businesses and workers of our country. Here is what we are hearing regarding the SBA Stimulus plan. This will apply strictly to help companies affected by the shut down and for working capital and not for building loans or business acquisition loans.


Here's what we know so far:

  • Loans up to $10M.
  • SBA Express Lines of Credit up to $1M.
  • 100% SBA guaranty.
  • No guaranty fee to the client or the bank.
  • 10 year fully amortizing.
  • Rates likely to be variable, but market will dictate
  • No pre-payment penalties.
  • Loan amounts will be based on a formula of average 12 month trailing operating expenses X between 4 and 12 months (term yet to be agreed upon).
  • Principal forgiveness on 8/30/2020 based on employees retained or rehired in an amount of salary, payroll taxes and benefits, not to exceed $100k per employee.
  • Eligibility includes business and/or nonprofit which employ less than 500 employees.
  • Funds may be used for payroll support, employee salaries, mortgage payments, rent, utilities, and debt obligations incurred before the covered period.
  • Can request up to 12 months deferment once loan is funded OR include 4 to 6 months of payments as a part of the loan amount (not yet decided which to include as this point).
  • Standard GOS investors may purchase variable rate loans. Fed can also buy the loans if requested to free up capital for further lending.
  • Requirements outside of standard SBA guidelines. These are designed to increase cycle time to get the loans funded quickly for clients in need:
    • No collateral requirements
    • No guarantor requirements – resulting in no need to pull credit
    • No life insurance requirement (still being debated)
    • No credit elsewhere requirement
    • No personal recourse requirement
    • Lease doesn't need to match term of loan
    • May allow for standard insurance requirement (business/liability) to be post-close

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