Overview of Economic Aid Signed into Law
for SBA 504 Loans
On December 27, 2020 the President signed into law the "Consolidated Appropriations Act, 2021". This law provides changes to the 504 Loan Program as well as relief for current and new small business 504 borrowers. Below is a summary of some of the changes.
Temporary Fee Elimination for New 504 Loans

  • For new loan approvals from date of enactment of new law (December 27, 2020) through September 30, 2021:

  • Waives the 0.5% Third Party Lender Participation Fee
  • Waives the 1.5% CDC Processing Fee

Extension of CARES Act Section 1112 Subsidy Payments (Round 2)

  • 3 months of additional payment subsidies starting February 1, 2021 capped at $9,000 per loan per month.

  • Certain “underserved” businesses will receive an additional 5 months of subsidy payments in addition to the 3 months provided above. (Based on NAICS code and includes, but not limited to restaurants and hotels).

  • 6 months of payment subsidies, capped at $9,000 per loan per month for loans approved from February 1, 2021 - September 30, 2021.

*Borrowers with monthly payments in excess of $9,000/month have been contacted separately with additional details on their payments.

Changes to Debt Refinance Without Expansion

  • Elimination of the rule that prohibited refinance of any government guaranteed debt.

  • Reduction from 2 years to 6 months time that Qualified Debt had to be on the books for refinance eligibility.

  • Elimination of requirement that loan must have been current for not less than 1 year prior to application date.

Other 504 Debt Refinance Changes

  • 504 Debt Refinance With Expansion:

  • Increase in the amount of debt eligible for refinance from 50% of expansion costs to 100% of expansion costs.

  • Refinance of Senior Project Debt:

  • During the 1 year period following enactment of the law, a CDC is authorized to allow the refinancing of a senior loan in an amount that, when combined with the outstanding balance of the 504 Loan, is not more than 90% of total Loan to Value.
  • Proceeds must be used to support business operating expenses or towards improving existing project property collateral.

Contact Big Sky Finance for additional details on all Section 1112 Subsidy Payments and other changes to the SBA 504 Loan Program. Feel free to reach out to Jo Ann Jones, Johnna Jablonski, or Brandon Berger with any questions.

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Billings, MT 59101
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Helena, MT 59601