In 2020, the coronavirus pandemic wreaked havoc on the small business landscape in the U.S., forcing businesses to adapt on a daily basis or face permanent closure. Since the beginning of the pandemic (observed as March 1, 2020), 163,735 total U.S. businesses have closed, according to a report from Yelp; this is a 23% increase from Yelp’s previous report, which was published on July 10, 2020. Many businesses have since reopened, but 60% (or nearly 98,000) have closed permanently. 

This widespread devastation has trickled down to local economies, making it crucial for small businesses to obtain the funds necessary to their survival. And although there isn’t a one-size-fits-all approach to keeping a business afloat, for some small businesses, the U.S. Small Business Administration (SBA) is offering additional relief. 

In late December, Congress passed the $900 billion COVID-19 relief package as part of the Consolidated Appropriations Act, 2021. The Act included several programs and provisions to support small businesses as the coronavirus pandemic continues to impact their operations. A large component of this was a second round of the Paycheck Protection Program (PPP), which was on the forefront of many small business owners’ minds. 

The initiative is designed to help businesses keep their staff employed, and for those that utilize at least 60% of loan proceeds toward payroll and the remaining towards eligible expenses, these loans can be forgiven by the SBA. But it’s not the only relief that the SBA is offering through the latest stimulus. 


Debt relief extension 

Beyond new PPP efforts, the most recent relief package extended the Debt Relief Program established under the CARES Act, in which, as an SBA borrower you may be eligible to have your loan payments made by the SBA. The good news? The program is automatic and no application is necessary; all businesses need to do is contact their lender to learn more and confirm that they are eligible. 

Below, we’ve answered the top three questions small business owners may have about this program extension.

1. What types of loans apply? Borrowers of new and existing 7(a), 504, and microloans may be eligible for waived principal and interest for an additional three months. Small businesses in hard-hit industries may be eligible for additional payments up to a total of eight months. These may include borrowers with microloans or 7(a) Community Advantage loans; as well as borrowers with 7(a) or 504 loans in sectors such as food service and accommodations, entertainment and recreation, education, and laundry and personal care services. 

2. What are the payment terms? These SBA payments begin Feb. 1, 2021, and are capped at $9,000 per month per borrower. 

3. What can I do as a small business owner? There is little work required from the borrower. This program is automatically funded and the borrower should reach out to their bank to discuss opportunities that may be available for relief. 

This program was utilized to its fullest extent last year, and The Bancorp — which is both a 7(a) and a 504 lender — is already working closely with the SBA to once again maximize this relief for its clients.


Additional provisions 

Lenders can help small businesses navigate new and extended stimulus packages to support their financial futures. While larger programs like PPP and debt relief are core parts of the latest bill, there are other provisions that may offer advantages to borrowers and lenders alike. 

For example, SBA Guarantee fees for borrowers of 7(a) loans are temporarily waived until Sept. 30, 2021. Additionally, the SBA increased the loan guarantee amount under the 7(a) loan program to 90% through Sept. 30, 2021, or until the funding expires. In addition, the SBA is waiving the SBA fees associated with 504 loans as well. These provisions provide greater opportunities for lenders and borrowers to collaborate during this current economic climate. 

Remember, SBA loans can be used for numerous uses including the purchase and construction of real estate, purchase of a business, refinancing of debt, equipment needs, and working capital. 



To maximize relief from the SBA, small businesses may also explore applying for a second PPP loan. To be eligible, organizations must have 300 or fewer employees and a 25% revenue loss during any quarter of 2020 compared to the same quarter the year prior. The maximum loan amount is $2 million. Similar to the first round, PPP loans may be forgiven if certain requirements are met — including utilizing at least 60% of the loan proceeds towards payroll. 

First-time borrowers can also apply for a first draw loan. Whether a first or second time draw, the application deadline is March 31, 2021. More details are available on the the SBA’s website

In the first week, the SBA restricted the program to community financial institutions that serve underserved communities such as minority-, women- and veteran-owned businesses. More than $5 billion in loans were approved in the first week with thousands more already received as the program has expanded to all lenders. 

America’s small businesses have proven to be incredibly resilient, but they need the right resources to understand the full breadth of relief that’s available to them and maximize it for both short- and long- term success before it’s too late. Small businesses should stay connected with their banks to ensure they understand the full scope of eligible financial relief that can set them up for success in the year ahead.