Sen. Chris Coons, D-Delaware, who serves as ranking member of the Financial Services and General Government Appropriations Subcommittee and sits on the Small Business and Entrepreneurship Committee, released a statement April 17 after the Small Business Administration published a procedural notice informing its lenders about a provision in the CARES Act, authored by Coons, to completely relieve SBA small business borrowers of their loan payments for six months.
“We need to do everything we can to ensure small businesses can stay afloat, keep employees on payroll, and reopen their doors after the COVID-19 pandemic,” said Carper. “The Paycheck Protection Program is a critical part of that effort, but we also need to provide additional support to the most vulnerable businesses during this crisis: the 320,000 small businesses across the United States that already had an SBA loan.”
“I worked hard to secure a provision in the CARES Act that completely relieves small businesses from SBA loan payments for six months, but so far, some lenders have yet to even notify their borrowers of this benefit,” said Carper. “Just yesterday, the SBA published guidance to inform SBA lenders of this benefit. I’m urging all SBA lenders to take the initiative to notify their customers and suspend their automatic payments immediately.”
Coons’ Small Business Debt Relief Act, which passed as part of the CARES Act, assists 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. Childcare 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 childcare centers, via nonprofit intermediary lenders. The total of outstanding microloans is more than $560 million.
The SBA procedural notice is available at bit.ly/2zbBveD.