WASHINGTON – U.S. Senate Committee on Small Business and Entrepreneurship Ranking Member Ben Cardin (D-Md.), U.S. Senator Chris Coons (D-Del.), and U.S. Representative Anthony Delgado (D-N.Y.) today introduced 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 SBA 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 Small Business Debt Relief program has provided nearly $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 credit-challenged small business 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. Cardin, Coons, and Delgado authored the program in the CARES Act.
“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,” 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.”
“Small businesses across America are still fighting for their survival. Just as Congress ought to enact a second round of 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.”
“We are eight months into a devastating global health crisis which has had an inordinate impact on our small business community. So far, hundreds of thousands of organizations have taken advantage of the Small Business Debt Relief Program established in my Small Business Repayment Relief Act and signed into law through the bipartisan CARES Act. Still, it is clear from my conversations with owners and employees across NY-19 that folks need more support,” said Representative Delgado, member of the House Committee on Small Business. “Today, I am introducing the Small Business Debt Relief Extension Act, which builds on my repayment relief law to provide additional resources. Specifically, this legislation will strengthen the SBA Debt Relief Program, allowing more entrepreneurs to access relief and further extending qualified loan payments for businesses hardest-hit. I will keep pushing to get this bill included in future coronavirus stimulus packages to ensure firms across upstate have the resources they need to stay operational.”
“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,” Senator Amy 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.”
“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.
Original co-sponsors include Senators Amy Klobuchar (D-Minn.), Jeanne Shaheen (D-N.H.), Maria Cantwell (D-Wash.), Ed Markey (D-Mass.), Mazie Hirono (D-Hawaii), Kirsten Gillibrand (D-N.Y.), Chris Van Hollen (D-Md.), and Angus King (I-Maine.)
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.