The following Truist Bank borrowers with 7(a) loans that are fully disbursed and in regular servicing are eligible to receive regularly scheduled payments of principal and interest on their loan (“First Round”), commencing with the first scheduled payment following closing and full disbursement of their loan. For eligible borrowers on deferment, these First Round payments begin with their first scheduled payment following the deferment period.
The following Truist Bank borrowers with 7(a) loans that were approved prior to March 27, 2020, are fully disbursed, in regular servicing, and have received the First Round of payment relief are eligible for the Second Round and, potentially, the Extended Second Round of payment relief. For eligible borrowers on deferment and who have already received the First Round payments, the Second Round payments (and, if applicable, the Extended Second Round payments) begin with the first scheduled payment following the deferment period.
Congress did not extend the Section 1112 payment relief to 7(a) loans that were approved by the SBA during this time period. We do not know the reasoning behind this decision. Even though your loan may not be eligible for Section 1112 relief, Truist may be able to offer additional relief, including providing a deferment of your regularly scheduled loan payments. Please let Truist know if you would like to request a deferment.
If you are entitled to initial or extended relief under the Section 1112 payment relief program, no further action is required to participate in the program. You will continue to receive monthly statements during this time; and Truist may contact you regarding any special circumstances related to your loan and the payment relief, including whether you would like to suspend any current deferment. If your loan has a monthly payment greater than $9,000 and is included in the subset of loans with limited SBA relief, you are expected to continue to make regular payments to Truist for the portion of your monthly payment that exceeds this cap.
Please note that only the guaranteed portion of a Section 504 loan is eligible for Section 1112 payments, and you will need to contact the applicable CDC to discuss Section 1112 payment relief.
The SBA has mandated that any 7(a) loan that is otherwise eligible for Section 1112 payment relief must be fully disbursed and in regular servicing to receive the payments. Once your loan has been fully disbursed, and to the extent it is otherwise eligible for 1112 payment relief (as outlined in FAQ 1. above), you will be eligible to participate in the Section 1112 program.
Please refer to FAQ 2. above. Only 7(a) borrowers with a loan that was approved prior to March 27, 2020 (the date the CARES Act was implemented) are entitled to extended relief under the amended provisions. You may, however, be entitled to a deferment of the regularly scheduled principal and interest on your 7(a) loan. Please let Truist know if you would like to request a deferment.
The SBA will provide Section 1112 payment relief for all eligible 7(a) loans that are in regular servicing. SBA guidance suggests that Truist may apply this payment relief retroactively in the case of certain loans that may be past due by several months but are not categorized under SBA guidance as “in liquidation”. Please Note: If you are eligible for Second Round payments, you are still responsible for the January and February payments on your loan after application of the Second Round 1112 payment relief to your past due November and December payments. Please refer to FAQ 2. above for further information on Second Round payments, including the $9000 monthly payment cap.
Under the CARES Act, Truist Bank provided our SBA clients with the option to cancel any deferment for their 7(a) loans to ensure that they obtained the full six months of payment relief. This was in part to address concerns about limited funding for the program as well as to comply with SBA 1112 guidance mandating that the payment relief period had to be continuous and uninterrupted by any deferment period. Truist will share servicing details in a targeted notice letter to its 7(a) borrowers in the coming weeks, and you will have the option to cancel any current deferment to participate right away in the 1112 program or to remain in deferment and delay your participation.
Please refer to FAQ 1. above. If your existing 7(a) loan was approved between March 27, 2020 and September 30, 2020, your new 7(a) loan is ineligible for any Section 1112 relief payments. Congress limited the number of 7(a) loans eligible for payment relief under Section 1112, and we do not know the reasoning behind certain of the eligibility requirements. Even though your new loan may not be eligible for Section 1112 relief, Truist may be able to offer additional relief.
The SBA has additional information on its website. You may also direct loan-specific questions to your Truist banker, or, in the alternative, to one of the following Truist mailboxes: