NWBDA’s Response to the COVID-19 Outbreak

In response to COVID-19 outbreak and the financial impact it is having on our borrowers, we have put together some options for your consideration.  Please review and let us know if we can be of further assistance to you.

How Has COVID-19 Impacted Your Business?

NWBDA cares about its borrowers and how they have and are being impacted by COVID-19.

Please spend 5 minutes of your time and take our

SCORE Mentoring

SCORE mentors are rising to meet the many challenges faced by small business owners during this time of recovery from the coronavirus pandemic. SCORE is also offering a new real-time mentoring platform in addition to scheduled phone, video, and email options.

Navigating this unprecedented crisis is new for small business owners, so it helps to have trusted mentors who can provide guidance along the way. And SCORE knows you need advice quickly. This new method of mentoring shortens the time a client connects with a SCORE mentor from days to minutes.

Get Small Business Advice from SCORE Mentors in Real Time

SBA Disaster Assistance

Learn about SBA’s Disaster assistance and loans. 
Please be advised that this is not a loan product NWBDA can assist you with.

The CARES Act 1112 Section Payments – Debt Relief

Congress has passed a coronavirus relief/economic stimulus bill on December 27th, 2020. Congress appropriated $3.5 billion to extend payments to existing and new SBA borrowers. The Legislation includes the following provisions impacting the 504 Loan Program:

Qualifying loans approved prior to CARES Act (March 27, 2020) and fully funded (disbursed) on or before September 27, 2020:

  • 6 months of payment subsidies (funded borrowers may have already received this relief under the original CARES Act)
  • Plus 2 months of payment subsidies **capped at $9,000 per loan per month
  • Additional 3 months (after the 2 months) payment subsidies for loans to *“Hard-hit” borrowers, **capped at $9,000 per loan per month

Qualifying loans approved prior to CARES Act (March 27, 2020) and fully funded (disbursed) on or after September 28, 2020:

  • 3 months of payment subsidies (funded borrowers may have already received this relief under the original CARES Act)
  • Plus 2 months of payment subsidies **capped at $9,000 per loan per month
  • Additional 3 months (after the 2 months) payment subsidies for loans to *“Hard-hit” borrowers, **capped at $9,000 per loan per month

Qualifying loans approved during the original CARES Act (March 27, 2020-September 27,2020) and full funded (disbursed) on or before September 27, 2020:

  • 6 months of payment subsidies
  • No Round 2 Payments

Qualifying loans approved during the original CARES Act (March 27, 2020-September 27,2020) and full funded (disbursed) on or after September 28, 2020:

  • 3 months of payment subsidies
  • No Round 2 Payments

Qualifying loans approved February 1, 2021-September 30, 2021:

  • 3 months of payment subsidies, **capped at $9,000 per loan per month

Loans approved September 27, 2020-January 31, 2021:

  • No payment subsidies because the congressional intent of Section 1112 payment subsidies was to provide “relief” to existing borrowers in place at the onset of the pandemic and to stimulate new loans that would not otherwise occur because of the pandemic.

*”Hard-hit” NAICS Codes: 61; 71; 72; 213; 315; 448; 451; 481; 485; 487; 511; 512; 515; 532; 812 – According to https://www.census.gov/eos/www/naics/
**Please contact our servicing department at servicing@nwbusiness.org if your monthly SBA 504 payment is over $9,000 per month to find out what your excess payment is.

Find out if your small business is eligible for these payments: NADCO FLOW CHART

Taxes – CARES Act 1112 Section Payments

On January 28, 2020, SBA released an Information Notice to all SBA Lenders and Certified Development Companies regarding the CARES Act Section 1112 payments. 

This Notice states that the Internal Revenue Service, effective December 27, 2020, has enacted Section 278(c) of the COVID-related Tax Relief Act of 2020 which provides that “any payment described in section 1112(c) of the CARES Act shall not be included in the gross income of the person on whose behalf such payment is made”. 

Based on this update, a MISC-1099 will not be issued to our SBA 504 borrowers for any CARES Act payment received in 2020 as well as any paid in 2021.  This IRS update relates to your Federal Income Taxes only. 

Your 2020 annual interest and loan fee statements were mailed out in late January.  In the event you have not received, email us at servicing@nwbusiness.org and we will get you a copy.  This annual statement breaks down all interest and fees paid by the borrower and the SBA separately.

Should you have any questions regarding this matter, please seek advice from your tax advisor or accountant. 

Small Business Payment Protection Program (under the CARES Act)

Funds have run out and SBA is not accepting new applications at this time. 

Forgiveness Application and Instructions: CLICK HERE

WA State Resources

The Governor’s Office for the State of Washington has put together a list of resources to support Washington businesses impacted by COVID-19.  The guidance provided offers information related to financial, export, employer and employee, and insurance assistance for businesses. See More

Washington Small Business Development Center’s Disaster Planning and Recovery

SBA 504 Loan – Payment Deferral Information

SBA may agree to defer payments on a 504 SBA loan for up to 6 months and will adjust future payment amounts to allow the Borrower to catch up.  The catch up period will depend on various factors including loan amount, loan term and borrower’s ability to repay.

Checklist for deferral request

Borrower must provide the following information in order for NWBDA to process the loan payment deferral request:

  • Written Statement outlining the reason(s) for the cash flow problem.  This explanation should be specific and relay why the Borrower’s cash flow problems are a short term issue.
  • Contact information – Provide the best email and phone number where you can be reached. Prior to submitting to SBA, we will be calling you to ask a few business related questions.
  • Correspondence (email is sufficient) from the Bank who holds your first trust deed loan that outlines the relief/deferment or modification they will be providing on your loan.
  • Current financial information consisting of:
  • Current financial statements (form 770) for all guarantors
  • 2018 & 2019 Personal Tax Returns or copy of extension(s) for all guarantors
  • 2019 year-end business financial statement
  • Current interim financial statement (within last 90 days)
  • If Borrower has any affiliates, a current consolidated financial statement
  • 2019 Business Tax Returns or copy of the extension

We ask that you send all the above information at one time versus multiple submissions/emails.  You can securely upload your documents at https://www.nwbusiness.org/upload-deferment/ or email them to servicing@nwbusiness.org.

CARES Act Fraud

Fraudsters have already begun targeting small business owners during these economically difficult times. Be on the lookout for grant fraud, loan fraud, and phishing.

Read more: HERE

NWBDA Client Highlight:

Chinook Enterprises, Eddyline Kayaks and Skagit Rotary have come together to deliver hundreds of desperately-needed face shields to local hospitals, elderly care facilities and others across Skagit County. HERE