Small Business Relief Guaranteed Loan Program Act of 2020

To establish a business stabilization guaranteed loan program and authority to establish a secondary market in the Small Business Administration, and for other purposes. 1. Short title This Act may be cited as the Small Business Relief Guaranteed Loan Program Act of 2020 2. Business stabilization guaranteed loan program (a) In general The Administrator of the Small Business Administration shall carry out a program to guarantee loans to eligible borrowers, made by banks or other lenders. (b) Eligible borrower defined In this section, the term eligible borrower (1) is a small business concern as defined under section 3 of the Small Business Act ( 15 U.S.C. 632 (2) is located in a State or territory of the United States with a confirmed or presumed positive case of COVID–19. (c) Use of funds In addition to the use of proceeds currently permitted under section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) (1) To make periodic payments of principal and interest, for a period not to exceed 12 months, on a loan or a loan guarantee made to an eligible borrower that meets the eligibility standards of such section 7(a). (2) To provide benefits to employees of the eligible borrower, including group life insurance, disability insurance, sick leave, annual leave, educational benefits, paid family leave, or retirement benefits (including a pension plan or IRA). (3) To pay wages to employees of the eligible borrower, and related State and Federal payroll taxes, except that loan proceeds may not be used to pay amounts under a garnishment order issued by an agency of a State or Federal Government. (4) To provide technology, hardware, or software for a shift to telework or remote work for employees of the eligible borrower to enable continuity of operations. (5) To pay rent or utilities due or owed on any place of business of the eligible borrower. (6) To refinance an existing debt (including interest) in an amount not to exceed 50 percent of the amount of the debt. (7) To provide floor plan financing or other revolving line of credit. (8) To pay past-due Federal, State, or local payroll taxes, sales taxes, or other similar taxes that are required to be collected by the eligible borrower and held in trust on behalf of a Federal, State, or local government entity. (9) To provide employees and patrons of the eligible borrower with the necessary items specified by any public health authority to mitigate the spread of COVID–19. (d) Loan terms (1) Amount Loans guaranteed under this section may not exceed $2,500,000. (2) Disbursement With respect to a loan guaranteed under this section, loan amounts shall be disbursed as follows: (A) Not less than 10 percent, but not more than 20 percent, of such amount shall be disbursed not later than 5 calendar days after such approval. (B) Not later than 14 calendar days after such approval, any remaining amounts shall be disbursed. (3) Guarantee Loans guaranteed under this section shall be 100 percent guaranteed by the Administrator of the Small Business Administration. (4) Interest The Administrator and participating lenders shall not charge interest on any loan guaranteed under this section. (e) Repayment Repayment for loans guaranteed under this section— (1) shall be amortized over a period of time not to exceed 10 years; and (2) may not begin until 12 months (which may be extended by the Administrator of the Small Business Administration) after the final disbursement of loan amounts pursuant to subsection (d)(2). (f) Collateral A lender may not decline to make a loan described under this section to an otherwise eligible borrower due solely to inadequate collateral. The Administrator shall not decline to honor a guarantee on a loan made by a lender that is guaranteed under this section solely due to inadequate collateral. Lenders shall accept any available collateral, including subordinated liens, to secure a loan guaranteed under this section. (g) Fees Neither the Administrator of the Small Business Administration nor any lender may charge any fees to an applicant in connection with a loan guaranteed under this section. (h) Forgiveness If an eligible borrower that receives loan proceeds under this section demonstrates to the Administrator that the number of employees of such eligible borrower on December 31, 2021, is greater than or equal to the number of employees of such eligible borrower on December 31, 2019, the Administrator shall pay to the lender of such eligible borrower’s loan not more than 50 percent of the outstanding principal on such loan. (i) Sunset (1) In general Except as provided in paragraph (2), the Administrator of the Small Business Administration may not guarantee a loan under this section after September 30, 2022. (2) Extension The Administrator may extend authority to guarantee loans under this section by an additional 6 months by notifying Congress, in writing, within 10 calendar days before any extension. (j) Emergency rulemaking authority (1) In general Within 15 days after the date of the enactment of this section, the Administrator of the Small Business Administration— (A) shall issue rules to carry out this section; and (B) may issue rules to establish a secondary market for loans made under this section. (2) Notice The notice requirements of section 553(b) of title 5, United States Code, shall not apply to any issuance of rules under paragraph (1). (k) Authorization of appropriations There is authorized to be appropriated $100,000,000,000 to the Administrator of the Small Business Administration to carry out this section.

Summary: Small Business Relief Guaranteed Loan Program Act of 2020 This bill requires the Small Business Administration (SBA) to carry out a temporary program to guarantee loans made by banks or other lenders to small businesses affected by COVID-19 (i.e., coronavirus disease 2019). Such loans shall be zero-interest, fee-free loans, and up to 50% of the principal on such loans shall be forgiven if a recipient demonstrates that its employment has not decreased between December 31, 2019, and December 31, 2021. In addition to permitted uses of SBA loans, such guaranteed loans may also be used for purposes such as providing employees of the borrower with (1) benefits and wages, (2) technology for shifting to telework or remote work, or (3) necessary items specified by a public health authority to mitigate the spread of COVID-19.