The Consolidated Appropriations Act, 2021 (HR 133), signed into law on December 27, 2020, provides funds for small business owners. A key section of the funding is to extend the 2020 CARES Act Debt Relief SBA 7(a) loan program.

There are significant incentives provided to buyers looking to acquire a business. Provisions include:

• The borrower’s SBA loan guaranty fee will be waived. For example, a loan for $500,000 would typically require a 3% fee or $15,000.  
• For SBA 7(a) loans closed after February 1, 2021 and before September 30, 2021, there is six months of payments forgiven. The principal and interest will be waived, up to a maximum of $9,000 per month or $54,000 total.
• Additionally, the SBA is increasing the loan guarantee to lenders from 75% to 90%.  This decreases the risk for banks/lenders, which should enable lenders to extend more loans by taking on more risk. 

The obvious benefactor for this program is the borrower looking to acquire a business; however, it creates a more favorable environment for business owners looking to sell his/her business.

Please let me know if you would like to discuss. 

Steve Niehaus, MBA, CBI, CM&AP

[email protected]

239.565.3171