We have some exciting changes for buyers using SBA loans to purchase a business as part of the stimulus program related to COVID-19.
Starting February 1, 2021 and running until September 30, 2021 the SBA will be waiving loan guarantee fees, forgiving principal and interest payments for 6 months, and will increase the bank guarantee from 75% to 90%.
The guarantee fee waiver will save a buyer from 3% to 3.75% of the loan amount depending on size of the loan. For example, for a million-dollar loan this would save a buyer $31,500.
The loan payment forgiveness program will save up to $9,000 per month for six months for loans originated during this time. For example, for a million-dollar loan this would save a buyer $54,000.
The increase in the SBA loan guarantee from 75% to 90% should make the banks more competitive on making loans. Buyers may be able to receive loans that they could not have received before because of this change in guarantee amount.
These changes in our example of a million-dollar transaction could save the buyer $85,500. Keep in mind that these funds are limited and may run out before the end of September. They are on a first come first serve basis.
Contact Gateway School Sales at (972) 219-6961 to find out more!