Modifications to SBA Bridge Loan Program

Today the Small Business Administration (SBA) published a notice expanding eligibility for its Express Bridge Loan Pilot Program (Express Bridge Pilot) in response to the COVID-19 pandemic. As originally announced in October 2017, the Express Bridge Pilot authorizes certain SBA lenders to provide expedited SBA-guaranteed bridge loan financing on an emergency basis in amounts up to $25,000 for disaster-related purposes to small businesses located in communities affected by Presidentially-declared disasters while those small businesses apply for and await long-term financing (including through the SBA’s direct Disaster Loan Program).

Per this notice, the SBA has expanded eligibility for the Express Bridge Pilot to include small businesses nationwide adversely impacted under the COVID-19 Emergency Declaration issued by President Trump on March 13, 2020. Because the President’s COVID-19 Emergency Declaration covers all states, territories, and the District of Columbia, eligible small businesses under the Express Bridge Pilot will now include small businesses located in any state, territory, and the District of Columbia that have been adversely impacted by the COVID-19 emergency. The SBA notes that previously, those small businesses would not be eligible for Express Bridge Pilot loans because the program was limited to eligible small businesses located in “Primary Counties” that have been Presidentially-declared as major disaster areas, plus any “Contiguous Counties.’

In addition, the SBA is revising program requirements to allow Express Bridge Pilot loans made under the COVID-19 Emergency Declaration to be approved through March 13, 2021. This is a revision to the previous policy that only allowed Express Bridge Pilot loans to be made up to six months after the date of the applicable Presidential disaster declaration. Finally, the SBA is extending the term of the Express Bridge Pilot from September 30, 2020 to March 13, 2021 to assist small businesses that may experience delayed effects resulting from the COVID-19 emergency to benefit from the Express Bridge Pilot and to allow SBA to continue its evaluation of the program.