Building on CARES Act program, lawmakers introduce legislation to extend SBA debt relief
WASHINGTON –U.S. Senator Amy Klobuchar (D-MN) joined Senators Chris Coons (D-DE) and Ben Cardin (D-MD), Ranking Member of the Small Business Committee, and Representative Antonio Delgado (D-NY) to introduce the Small Business Debt Relief Extension Act. At the end of September, hundreds of thousands of small businesses will reach the end of emergency debt relief for loans backed by the Small Business Administration (SBA). The bill would extend debt relief for all of these small businesses through at least February 2021 and beyond for those particularly hard-hit by the pandemic.
“Small businesses continue to face incredible stress and we must do everything we can to help them weather the economic turmoil caused by the coronavirus pandemic,” Klobuchar said. “The Small Business Debt Relief Extension Act will provide continued financial relief for many small businesses in Minnesota and across the country. Small businesses are the backbone of our economy, and I will continue to fight for the support they deserve during this time of crisis.”
In March, Klobuchar, Coons, and Cardin, Ranking Member of the Small Business Committee, announced that their $17 billion Small Business Debt Relief Act was included in the CARES Act.
The Small Business Debt Relief program has committed $8 billion in relief to some of America’s smallest, most at-risk employers during the recession. With no application required and minimal administrative burden, the program has delivered relief to 320,000 credit-challenged small businesses concentrated most heavily in the service industries hardest hit by the pandemic—by providing six months of principal, interest, and fee payments on all preexisting, deferred, and new 7(a) loans, 504 loans and microloans.
“Small businesses across America are still fighting for their survival. Just as Congress ought to enact a second round of Paycheck Protection Program (PPP) loans for hard-hit businesses, it should also extend the SBA debt relief program, which has seamlessly provided support to Main Street businesses,” said Senator Coons, also the Ranking Member of the Financial Services and General Government Appropriations Subcommittee, which funds the SBA. “I continue to urge President Trump and Congressional leaders to negotiate a new relief package, and when they do, the Small Business Debt Relief Extension Act should be in it.”
“The pandemic is much longer than we anticipated in March when Congress created the debt relief and other small business programs. There is still a great need for the support provided by the debt relief program; there is no reason why it should end now,” Senator Cardin said. “I am proud to join Senator Coons and Congressman Delgado to introduce this commonsense bill to continue providing relief for struggling small businesses that have SBA loans, and provide additional support to those that have been hardest-hit by COVID-19, especially underserved small businesses.”
The Small Business Debt Relief Extension Act will:
• Extend debt relief payments for all small businesses with an SBA-backed loan for five months, through February 2021. That includes 7(a) loans, 504 loans, and microloans.
• Provide an additional seven months of debt relief for highly vulnerable businesses, including all those with a Community Advantage or microloan and those with a regular 7(a) or 504 loan that operate in the sectors hardest hit by the pandemic: educational services; arts, entertainment, and recreation; accommodation and food services; and charter buses.
• Extend the availability of debt relief on new SBA-loans for a full year, to include those approved through September 2021. This will provide an ongoing incentive for small business growth and job creation in all sectors.
• Ensure debt relief benefit is associated with no tax liability for any participating business.
• Improve program integrity and transparency, by increasing required SBA reporting to Congress and communication with borrowers.
• Require no new spending by Congress, as it will draw upon funds already appropriated under the CARES Act.
In addition to Klobuchar, Coons, and Cardin, Senate cosponsors include Senators Jeanne Shaheen (D-NH), Maria Cantwell (D-WA), Ed Markey (D-MA), Mazie Hirono (D-HI), Kirsten Gillibrand (D-NY), Chris Van Hollen (D-MD), and Angus King (I-ME).
The Small Business Debt Relief Extension Act is endorsed by the National Association of Government Guaranteed Lenders (NAGGL), Opportunity Finance Network, Mission Lenders Working Group, Friends of the SBA Micro Loan Program, National Association of Development Companies (NADCO), the International Franchise Association, and the CDFI Coalition.
Bill text is available HERE.