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Are SBA Loans Forgivable?

In this article, we tackle SBA loan forgiveness. We identify what SBA loans are forgivable and how to get those SBA loans forgiven. This article is part of our series, SBA Loans for Small Business Owners: The Complete Beginners Guide, we share our experiences and expertise to answer questions that small business owners have about SBA loans.

By Thomas Tramaglini, Managing Director at BRP Onesta

Business Owners Confused

Are you a small business owner that has an SBA loan? Do you receive an SBA loan in recent years? Is your loan forgivable? Are parts of your loan forgivable?

Business owners are confused and continue to be confused.

According to the SBA, there are over 31 million small businesses in the United States. Using SBA data, of the 31 million+ small businesses, over the last 5 years approximately 12 million loans have some sort of SBA tag to it. So, about approximately 1 in 3 small business owners have recently had some sort of SBA small business loan. We believe the percentage could be closer to 1 in 2 with the number of small businesses that the SBA Office of Advocacy also suggests that many businesses have no employees, or they may be dormant.

Since so many small business owners have a loan associated with the SBA in some way, we frequently are asked if they must pay back their SBA loan. As part of our blog series SBA Loans for Small Business Owners: The Complete Beginners Guide, we provide some simple answers below.

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Access to SBA Loans Blew Up in 2020

Before 2020, I am not sure if anyone had ever seen an SBA loan be forgiven. In fact, according to the Small Business Credit Survey suggests that before the Pandemic, only about 1 in 5 small businesses were actually able to secure an SBA loan of some type.

So, we know that since April 2020, the number of small business owners having some sort of associated SBA loan is 30%-50% higher.