SBA Update

April 6, 2020



SBA Paycheck Protection Program (PPP):  ICBA Summary

The recently passed CARES Act created the SBA PPP to help struggling small businesses impacted by COVID-19 and appropriates $349 billion for this purpose. The PPP provides vital cash-flow assistance through 100 percent federally guaranteed loans to small businesses who maintain their payroll during the COVID-19 crisis. If the small business borrower maintains its payroll, the portion of the loan used for certain covered expenses including payroll, interest on mortgage obligations, rent, and utilities would be forgiven.

The PPP application process was first available on Friday April 3rd and has seen extremely strong demand from small businesses.  While the PPP allows for the loans to be sold in the secondary market, we don’t expect these loans to be securitized due to the short maturity term of the loans (2 years) and low interest rate (1 percent).

 

Fixed-Rate DCPC Pools



Fixed-Rate SBIC Debentures



Floating-Rate 7(a) Pools



Dan Stimpson, CPA

Senior Vice President, Investment Strategies

Vining Sparks IBG, LP

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