Cantwell Helps Secure Billions for Small Business Loans, Grants, & Debt Relief in COVID-19 Funding Package
Legislation contains $350 billion for low-interest, federally-guaranteed small business loans
WASHINGTON, D.C. – In the nearly $2 trillion funding package passed by the Senate this evening to fight the ongoing COVID-19 pandemic, U.S. Senator Maria Cantwell (D-WA), a senior member of the Senate Small Business Committee, supported more than $377 billion in assistance for small businesses throughout the country. $350 billion of the funding will help provide Small Business Administration (SBA) low-interest, federally-guaranteed loan programs for small business owners. She also helped secure $27 billion to provide relief and assistance to small businesses and non-profits. That includes $10 billion to fund a new emergency grant program for small businesses of up to $10,000, and $17 billion to enable the Small Business Administration (SBA) to cover all loan payments – including principal, interest, and fees – for new and existing SBA loans for the next six months.
Cantwell and the other Democratic members of the Small Business Committee introduced legislation containing these provisions last week and fought to include them in the final package.
“Our small businesses have been hit hard. We want to try to lessen the economic impacts of shelter-in-place or social distancing,” Cantwell said. “Our businesses who shut down don’t have the same resources to come to Washington, D.C., to lobby for aid and support but are counting on us to create a program that small businesses can get both grants and loans.”
The $350 billion will expand the SBA’s 7(a) small business loan program to allow businesses and nonprofits to apply for federally-guaranteed loans of up to $10 million to cover expenses such as salaries; paid sick, medical, or family leave; insurance premiums; and payment for mortgages, rent, and/or utilities. Once the bill becomes law, small business owners can apply for these loans at banks that are existing SBA lenders. Loans to cover up to eight weeks of payroll, mortgage payments, rent, and utilities would be forgiven if the small business maintains their payroll. Nearly 609,000 Washington small businesses would be eligible to benefit from this relief.
Under the new emergency grant program Cantwell helped secure, small businesses and non-profits that have been in operation since January 31, 2020, can apply for a grant of up to $10,000. To qualify, a small business or non-profit must first apply for an SBA economic injury disaster loan (EIDL) — then, the applicant would be eligible to receive a $10,000 advance grant within three days of applying for the loan. Businesses would not be required to repay the grant, whether or not they receive the loan. The funding can be used to provide sick leave for employees, maintain payroll, meet increased production costs, or pay debt, rent, mortgage payments, or other business obligations. These grants would be available to small businesses, private nonprofits, sole proprietors, independent contractors, tribal businesses, cooperatives, and employee-owned businesses (ESOPS).
The six month debt relief provision, which Cantwell also helped secure, would help the more than 8,000 Washington small businesses that are currently paying off SBA-backed loans from 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 program currently has an outstanding total of $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 legislation passed the Senate this evening by a unanimous 96-0 vote. It now moves on to the House of Representatives for consideration.
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