WASHINGTON — Certain businesses in the Houston area affected by Hurricane Harvey that have Small Business Administration (SBA) loans could be eligible for deferments of principal and interest payments for up to 12 months, the agency said after President Trump declared certain Texas counties to be disaster areas.
The SBA's action affects certain borrowers, including SBA Microlenders, with existing 7(a), 504, 7(m) and disaster loans, the agency said, that were in "regular servicing" status on Aug. 25 in those primary counties designated as Federal disaster areas. Interest will continue to accrue on the loans involved.
The declared disaster areas may be found at www.sba.gov/disaster.
Borrowers will be notified of the automatic deferment on their monthly payment notices, the SBA said. Borrowers preferring to continue making regular payments during the deferment period should notify their respective SBA servicing center to make alternative payment arrangements.
After the automatic 12-month deferment period, the SBA said it will review borrower circumstances on a case-by-case basis to determine the nature and extent of further relief appropriate for each situation.
Borrowers that are located in counties/parishes contiguous to the primary county in the disaster areas and have suffered an adverse impact because of the disaster may be eligible for nine months of deferment of principal and interest payments on SBA-serviced business and disaster loans.
The SBA will not provide deferments on these loans automatically, but an adversely impacted borrower may request a deferment through the SBA office servicing the loan. The SBA will evaluate these requests on a case-by-case basis.
The SBA also is encouraging 7(a) Lenders, Certified Development Companies (CDCs) and Microlenders to provide similar deferment relief for borrowers with lender or CDC-serviced SBA-business loans in the primary disaster areas and contiguous counties/parishes.