Building on CARES Act program, lawmakers introduce legislation to extend SBA debt relief
(Washington, DC) – Today, U.S. Senator Jeanne Shaheen (D-NH), a senior member of the Senate Committee on Small Business and Entrepreneurship, joined a bicameral group of lawmakers to introduce the Small Business Debt Relief Extension Act. At the end of September, hundreds of thousands of businesses will reach the end of emergency debt relief for Small Business Administration (SBA)-backed loans. The bill would extend debt relief for small businesses through at least February 2021 for all borrowers and further for those particularly hard-hit by the pandemic. The legislation is led by U.S. Senators Chris Coons (D-DE) and Ben Cardin (D-MD), and Congressman Antonio Delgado (NY-19).
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 for businesses and minimal administrative burden, the program has delivered relief to 320,000 small businesses, especially in service industries hardest hit by the pandemic like hospitality and retail by providing six months of principal, interest, and fee payments on all preexisting, deferred, and new SBA loans, including 7(a) loans, 504 loans and microloans. Today, the lawmakers reiterated their calls to extend the program, at no new cost to the federal government, and introduced legislation to do just that.
“Small businesses across the country are struggling to keep their heads above water as the economic crisis from the pandemic bears down. The provisions we worked to include in the CARES Act have served as lifelines to many businesses fighting to make ends meet, but time is running out. Congress needs to act now,” said Senator Jeanne Shaheen. “This bill is a common-sense measure that will extend authorization of emergency debt relief for SBA-backed loans, including Paycheck Protection Program loans, to give small business owners a little extra breathing room. We worked on a bipartisan basis to craft this provision – and the other small business assistance programs in the CARES Act – and there is no reason why we shouldn’t be able to meet that same standard in this effort. Ultimately, Republicans need to meet us at the negotiating table so together we can deliver relief for small business owners and all those impacted by this crisis.”
The Small Business Debt Relief Extension Act will:
- Extend debt relief payments for all small business 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.
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.
Senator Shaheen helped negotiate the small business relief programs that were established in the Coronavirus Aid, Relief and Economic Security (CARES) Act that was signed into law in March. Over $2.5 billion in assistance has been disbursed to more than 24,000 businesses across New Hampshire through the CARES Act’s Paycheck Protection Program (PPP). However, many small businesses continue to struggle. Shaheen is continuing to call for the passage of the Prioritized Paycheck Protection Program (P4) Act, legislation she introduced that would allow these small businesses to access a second round of PPP loans. Shaheen recently hosted a virtual meeting with members of the Greater Salem and Greater Derry-Londonderry Chambers of Commerce and provided an update on her efforts to secure additional relief for Granite State families and businesses in upcoming COVID-19 response legislation.
Earlier this week, Shaheen introduced two additional pieces of legislation to support small businesses: the Small Business Broadband and Emerging Information Technology Enhancement Act, which would improve programs operated by the SBA to address problems associated with a lack of broadband internet and other emerging information technology resources, and better assist small businesses in accessing and successfully adopting these tools; and the America Labor, Economic competitiveness, Alliances, Democracy and Security (America LEADS) Act, which is Senate Democrats’ proposal for a new U.S.-China policy. The most comprehensive China legislation to date, the America LEADS Act would provide significant new investments to rebuild the U.S. economy and provide our workers, entrepreneurs, researchers, and manufacturers with the skills and support needed to out-compete China and succeed in the twenty-first century.