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Financial Institution Letter

Revised: New SBA and Treasury Programs Available for Small Business Relief

April 2, 2020  |  FIL-33-2020

Summary:

The FDIC is advising financial institutions of multiple forms of relief available in the Coronavirus Aid, Relief, and Economic Security (CARES) Act to small businesses through programs administered by the Small Business Administration (SBA), with the backing of the U.S. Department of the Treasury (Treasury). The FDIC encourages financial institutions to consider using these programs in a prudent manner as they actively work with small business borrowers with less financial flexibility to weather near-term operational challenges due to the Coronavirus Disease 2019 (referred to as COVID-19).

Statement of Applicability to Institutions under $1 Billion in Total Assets: This Financial Institution Letter (FIL) applies to all FDIC-supervised institutions.

Highlights:

  • The FDIC encourages financial institutions to consider the relief available to small businesses through new programs administered by the SBA, and more fully described at https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.
  • These SBA programs include:
    • The Economic Injury Disaster Loan program under Section 7(b) of the Small Business Act, which provides funds to small businesses to cover economic injury resulting from the disaster, such as a loss of revenue; and
    • The Paycheck Protection Program, which provides loans to encourage certain qualified small businesses to retain employees through the COVID-19 pandemic and includes loan forgiveness subject to certain conditions.
  • The SBA is streamlining its processes to enable more financial institutions to use these programs for small business borrowers affected by COVID-19.
  • Beginning April 3, 2020, the FDIC will post on our Coronavirus (COVID-19) webpage updated program information from the SBA for financial institutions that want to learn how to access its new programs.
  • Information regarding the Treasury's small business loan programs is available.
  • The FDIC will not criticize financial institutions' good faith efforts to prudently use the SBA and Treasury programs to work with small business borrowers affected by COVID-19.

Suggested Distribution:

FDIC-Supervised Banks

Suggested Routing:

Chief Executive Officer
Chief Credit Officer
Chief Risk Officer

Related Topics:

Interagency Statement on Pandemic Planning
FDIC Statement on Financial Institutions Working with Customers Affect by the Coronavirus and Regulatory and Supervisory Assistance
Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus
FAQs for Financial Institutions Affected by the Coronavirus

Paper copies of FDIC FILs may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).