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"Velázquez Introduces Legislation to Create New Direct Lending Program for Small Businesses Impacted by COVID-19"

Summary

A press release dated March 12, 2020 announcing that House Small Business Committee Chairwoman Nydia M. Velázquez (D-NY) introduced the SBA Business Stabilization Direct Loan Program Act of 2020. The bill would allow the Small Business Administration to make direct no-interest loans to borrowers impacted by COVID-19, with small businesses in a state or territory with a confirmed or presumed positive case eligible. Loans could be used for employee benefits, wages, taxes, telework arrangements, rent and refinancing existing debt. According to the release, loans would carry a term of 10 years with no required repayment in the first 12-months and may not be denied due to inadequate collateral. It quotes Velázquez on the bill's purpose of easing the burden on small businesses.

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Velázquez Introduces Legislation to Create New Direct Lending Program for Small Businesses Impacted by COVID-19

March 12, 2020

Washington, D.C.— Today, House Small Business Committee Chairwoman Nydia M. Velázquez (D-NY) introduced legislation that would create a new program under the Small Business Administration (SBA) to directly supply loans to small businesses impacted by the coronavirus (COVID-19) outbreak.

“As the severity of the coronavirus pandemic continues to affect day-to-day lives, Congress must take steps to promote the health, safety, and financial wellbeing of hardworking Americans,” said Chairwoman Velázquez. “As I have heard in Committee hearings and from small businesses in New York City, this public health crisis is set to leave lasting stains on our small business economy. That is why, during this trying time, I am introducing legislation that creates a direct loan program to ease the burden crushing Main Street while also stimulating the economy. Under this bill, small business owners will be able to finance payroll, employee benefits such as paid leave, and existing debt. The stakes are too high for the federal government to get this wrong; this bill is an important step in what must be a swift, bold government response to protect our country’s people and small businesses. ”

The SBA Business Stabilization Direct Loan Program Act of 2020 would:

· Allow the SBA to make direct no-interest loans to borrowers impacted by COVID-19.

· Make small businesses located in a state or territory with a confirmed or presumed positive case of COVID-19 eligible for loans.

· Allow for loans to be used to provide employee benefits, pay wages, pay taxes, make telework arrangements, pay rent, refinance existing debt, and more.

Additionally:

· Loans in the program will be under a term of 10 years with no required repayment in the first 12-months.

· Loans may not be denied due to inadequate collateral.

For full text of the bill, click here.

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