SBA Loan Changes That Will Help Small Businesses

The PPP (Paycheck Protection Program) has been a saving grace for many small businesses throughout the country since the COVID-19 pandemic hit last March. The creation of the program has allowed many FECs to stay afloat despite having to close their doors for extended periods. We recently put out a blog that discusses the details of the PPP loans.

The recent passage of the $900 billion stimulus relief package provides additional funding for the PPP, but it also changed several aspects of the SBA’s (Small Business Administration) loans. Let’s take a look at some of the SBA loan changes and how it can affect future loans for your family entertainment center (FEC).

SBA 7(a) Loans

The 7(a) loan program is the SBA’s primary program for assisting small businesses with financial loans. This loan program normally is used for small businesses that need the capital for typical business purchases such as buildings, land, inventory, materials etc. The new stimulus package allocated $2 billion for the SBA 7(a) loans.

Changes in SBA Loan Terms

Expanded Loan Guarantees

One aspect of SBA 7(a) loans that makes them so advantageous is that the federal government guarantees the loan. Until now, this governmental guarantee was 85% for loans up to $150,000 and 75% for loans greater than $150,000.

Now, the standard guarantee has been raised to 90%. This puts less risk on the lenders and makes it easier for them to offer this financing. This change expands financial opportunities for a lot of small businesses around the country.


One of the biggest changes to the loans is that the new stimulus bill forgives up to 8 months of principal and interest payments on 7(a) loans. Essentially, this is the federal government paying a portion of your debt.

Additionally, if you already have an existing 7(a) loan, you can still get up to 8 months of forgiveness of principal and interest payments, capped at $9,000 a month. Furthermore, the standard borrower and lender fees for SBA loans has been waived.

Similar conditions were put into place during the 2008-2009 financial crisis, which caused a surge in SBA lending and helped many small businesses survive.

Overall, the changes outlined above will make it significantly easier for small businesses around the country to get loans to help them prosper moving forward. The adjustments to PPP and SBA 7(a) loans will go a long way in keeping many FECs alive as the economy starts to turn around.

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