Illinois Senator Tammy Duckworth’s legislation to save the Small Business Administration’s loan program from shutting down passed the Senate unanimously yesterday. Duckworth’s Small Business Lending Continuity Act of 2020, which was co-led by Florida Republican Senator Marco Rubio would fix an error in the CARES Act that inadvertently results in the SBA’s flagship 7(a) Loan Guarantee Program shutting down whenever the newly-created Paycheck Protection Program runs out of funding. If the wording was left unfixed, the loan program’s $30 billion cap would be voided on July 1st or if the PPP runs out of money.
Duckworth says the legislation would help small businesses recover by making it easier to access loans to stay open. The CARES Act also authorized a $17 billion small business debt relief program, directing SBA to cover loan payments for six months to all small business borrowers of SBA-backed loans and for borrowers that take out SBA-backed loans within six months of the CARES Act passage. If the SBA 7(a) loan program shuts down—which the Small Business Lending Continuity Act would prevent—small businesses seeking these loans won’t be able to access them and wouldn’t be eligible for six months of the SBA covering their loan payments.
Senate Bill 3782 now heads to the House where it is likely to pass without issue by the end of the week.