Delgado Introduces Legislation to Relieve Small Business Loan Payments For Six Months
Bill Would Trigger Nearly $17 Billion in Automatic, Direct Loan Payments For New and Existing Small Business Loans
WASHINGTON, DC – Today, U.S. Representative Antonio Delgado (NY-19) member of the House Small Business Committee, introduced legislation that would ensure that every small business with a qualified Small Business Administration (SBA) loan automatically be relieved of their loan payments—including principal, interest, and fees—for the next six months. The Small Business Repayment Relief Act of 2020 would provide nearly $17 billion in federal funding for SBA to cover six months of loan payments for all qualified loans without any action from small businesses. This assistance would be a lifeline for hundreds of thousands of American small businesses fighting for their survival over the coming months, including the 27,000 small businesses and self-employed owners in New York's 19th Congressional District.
"Small businesses in upstate New York and across the country are already facing devastating impacts from the economic fallout of COVID-19. I continue to hear from small businesses and self-employed owners in NY-19 who have had to make heart breaking decisions to close shops and lay off staff," said Rep. Delgado, a member of the House Small Business Committee. "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. I introduced the Small Business Repayment Relief Act to give automatic assistance to our small businesses in these unprecedented times. I will continue to urge House leadership to prioritize the needs of small businesses in future legislation to assist our nation with the COVID-19 pandemic."
"The SBA Microloan Program provides the technical assistance and capital, including loans up to $50,000, that many minority, women, veteran and low-income entrepreneurs have difficulty accessing from traditional financial institutions, even during the best of economic times," said Bob Rapoza, spokesperson for the Friends of the SBA Microloan Program. "We applaud Congressman Delgado. The lifeline this legislation will provide to some of our nation's smallest and hardest hit businesses that are experiencing the brunt of the COVID-19 crisis, including significant revenue shortages, supply chain issues, and inability to meet payroll, mortgages, rent and other building expenses."
The Small Business Repayment Relief Act requires the SBA Administrator to provide loan payments for small businesses for six months. The SBA Administrator would automatically provide these payments and ensures small business can focus on keeping their business running. Specifically, the bill 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 bill would immediately support the approximately 320,000 small businesses across America that participate in these loan programs.