Congress has authorized a much-needed second round of Section 1112 payments to eligible SBA loan recipients. This funding is available to eligible, non-casino hotels and motels (NCAIS 721110) with up to eight months of additional relief. This second round of payment relief is set to begin February 1, 2021 or when a hotel or motel’s current loan-deferment period ends.
The program details are extensive and nuanced, so for in-depth program details, eligibility requirements and payment disbursement schedules, please refer to the SBA Procedural Notice dated January 19, 2021. Here are a few requirements of the plan:
To be eligible, borrowers must have a loan that is:
Guaranteed by the SBA (or for 504 loans – funded by an SBA-guaranteed debenture)
In “regular servicing” status (not in liquidation, deferment or 120+ days overdue)
The monthly loan payment:
Is capped at $9,000 – Borrower must pay anything in excess of $9,000
One-loan limitation
A Borrower that has received, is receiving, or will receive, Section 1112 payments on a loan that was approved beginning on March 27, 2020 and ending on September 27, 2020 may not receive assistance under Section 1112 for any other loan approved beginning on or after February 1, 2021.