Sens. Chris Coons, D-Delaware, and Ben Cardin, D-Maryland, introduced on March 18 legislation that would ensure that every small business with a loan from the Small Business Administration would be relieved of their loan payments — including principal, interest and fees — for the next six months.
Coons and Cardin are actively working to include this bill in the third legislative package currently being drafted to respond to the coronavirus. The Small Business Debt Relief Act of 2020 would be a lifeline for a wide range of American small businesses fighting for their survival over the coming months.
In addition to Coons and Cardin, original cosponsors of the legislation include Sens. Amy Klobuchar, D-Minnesota; Tammy Duckworth, D-Illinois; Ron Wyden, D-Oregon; Maria Cantwell, D-Washington; Ed Markey, D-Massachusetts; Jeanne Shaheen, D-New Hampshire; Jon Tester, D-Montana; and Kirsten Gillibrand, D-New York.
“Small businesses in Delaware and across the country are already facing devastating impacts from the economic fallout of COVID-19,” said Coons, a member of the Senate Small Business Committee and ranking member of the Financial Services and General Government Appropriations Subcommittee, which funds the SBA. “We have no time to waste to help small businesses and the millions of employees whose livelihoods are at stake right now. The scale and speed of the federal government response will determine the future of independent restaurants, hotels, retailers, childcare centers and so many other small businesses across the country.”
Coons called for the Small Business Debt Relief Act to serve as part of a comprehensive relief package for small businesses.
“While we must ensure that businesses that already hold government-backed loans get immediate relief, we also must reach the broader small business community,” said Coons. “This bill would encourage new SBA loans by offering payment relief to borrowers that take out loans in the next six months. I’m also working with Senate Small Business Committee Chair Marco Rubio, R-Florida, and Ranking Member Ben Cardin, D-Maryland, on fee waivers and increased guarantees to accelerate the availability of credit to a broad range of small businesses.”
The Small Business Debt Relief Act would assist borrowers in three major SBA lending programs:
— The 7(a) Loan Guarantee Program consists of $95 billion of outstanding loans. The two industries with the largest share of that volume are restaurants and hotels, which are among the hardest-hit by COVID-19. Child care centers, dental practices and medical practices also rely heavily on the program.
— The 504 Certified Development Company loan guarantee program provides long-term fixed rate financing for major fixed assets, such as land, buildings, equipment and machinery and microloan programs. The total of outstanding 504 loans is $26 billion.
— The Microloan program provides loans of up to $50,000 to small businesses and nonprofit child care centers, via nonprofit intermediary lenders. The total of outstanding microloans is more than $560 million.
The Small Business Debt Relief Act is also endorsed by the Friends of the SBA Microloan Program.s