South Dakota small businesses are facing an unprecedented economic disruption due to the novel coronavirus (COVID-19) outbreak. Programs that remain in place to help small businesses (as of 7/1/21) as listed below:

504 Senior Lien Refinancing
SBA recently authorized First District Development Company to allow refinancing of the Third Party Lender Loan on an existing SBA 504 project in an amount that, when combined with the outstanding balance on the subordinate 504 loan, is not more than 90 percent of the total loan to value. Small business 504 Borrowers will benefit by using equity they have built to support operating expenses.

The lender refinancing the Third Party Loan may be the existing Third Party Lender or a different private lender. This one-time refinance will be allowed for a temporary period from December 27, 2020, to December 26, 2021. Click here for more information and conditions that need to be met.

SBA 504 Fee Eliminations
Certain SBA 504 fees are temporarily eliminated as authorized by the Economic Aid Act enacted late December, 2020. Any 504 loan approved from December 27, 2020, through September 30, 2021, will receive fee elimination on two fees as follows:

· The 1.50% CDC Processing Fee charged to the Borrower as included in the debenture pricing.

· The 0.50% Third Party Lender Participation Fee paid by the Third Party Lender on its loan that is in senior lien position to the 504 Loan.

See the actual project example below—amounts highlighted are temporarily eliminated:

The total fee relief amounts to about half of the typical amount of SBA fees being charged. The fees will be eliminated only for as long as appropriations remain available.

Debt Relief for New SBA Borrowers
The stimulus includes $17 billion in funding for a provision to provide immediate relief to small businesses with standard SBA 7(a), 504, or Microloans. Under this provision, SBA will cover all loan payments for existing SBA borrowers, including principal, interest, and fees, for three months. This relief will be available to new borrowers as long as funding is available.

NEW – Economic Aid Act provides additional SBA Payment Forgiveness.
Click here for a flowchart outlining this information. All Section 1112 debt relief is subject to funds availability provided by Congress.

Tax Implications of CARES Act Section 1112 Payment Forgiveness
The Economic Aid Act enacted December 27, 2020, excludes all Section 1112 Payments made on behalf of SBA borrowers from gross income and are not subject to taxation at the federal level. Payments may still be taxable at the state or local level. Borrowers should consult their tax advisor for more information. This includes all Section 1112 Payments whether received in 2020 or going forward. (No Form 1099 for these payments will be provided.) All tax benefits from the Section 1112 Payments will go to the Borrower as if the payments were made by the Borrower.

Economic Injury Disaster Loans and Emergency Economic Injury Grants (Still Available Until December 31, 2021)

Economic Injury Disaster Loan (EIDL) is a provision to provide an advance of $10,000 within three days of application to small businesses and nonprofits who apply for the SBA EIDL loan. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. EIDLs are loans of up to $2 million that carry interest rates up to 3.75 percent for companies and up to 2.75 percent for private non-profits, as well as principal and interest deferment at the SBA Administrator’s discretion. The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses. You can get information and make application at the following website:

Or businesses can contact the SBA call center at (800) 659-2955 (TTY: 1-800-877-8339) or email The call center is open Monday – Sunday, 8a.m. – 8p.m. ET.

As a reminder, here at FDDC we are concerned about the stress on our borrowers and the small business community. If you are experiencing a hardship and currently have a loan through the First District Development Company office (including revolving loan funds or SBA 504 financing), please contact our office so that we can discuss your needs promptly.

For all small businesses, we will be sending out periodic notices as we learn of resources that are available.

First District Development Company