Title: Too Small to Fail Act
Policy area: Commerce

Summary:
Too Small to Fail Act
This bill establishes requirements for, and revises components of, loan programs of the Small Business Administration (SBA) to provide economic relief to small businesses affected by COVID-19 (i.e., coronavirus disease 2019).
Specifically, the SBA must waive the requirement that small businesses affected by COVID-19 be unable to find credit elsewhere in order to be eligible for SBA loans, and it must provide loans made in response to COVID-19 at no interest rate. In addition, the SBA is authorized to temporarily defer payments on any SBA loan for a small business that is affected by COVID-19.
During the period from January 31, 2020, and ending on December 31, 2020, eligible small businesses that apply for an emergency disaster loan in response to COVID-19 may request that the SBA provide an advance of up to $15,000 within three days of receiving the application. Such advance may be used for any allowable purpose, including (1) providing paid sick leave to employees who are unable to work due to direct effects of  COVID-19, (2) maintaining payroll to retain employees during business disruptions or substantial shutdowns, and (3) making rent or mortgage payments. Applicants shall not be required to repay any amounts of such advance, even if they are subsequently denied an emergency disaster loan. Further, under certain conditions, such advance may also be taken into consideration when determining forgiveness for a loan to meet payroll costs.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6324 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6324

 To amend the Small Business Act to provide no interest rate loans to 
 small businesses and non-profit entities impacted by the coronavirus 
                  (COVID-19), and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 23, 2020

 Mr. Pappas (for himself, Mr. Rose of New York, Ms. Kendra S. Horn of 
  Oklahoma, Ms. Norton, Mr. Carson of Indiana, Ms. Wild, Ms. Mucarsel-
 Powell, Mr. Panetta, Mrs. Hayes, Ms. Kuster of New Hampshire, and Ms. 
   Pingree) introduced the following bill; which was referred to the 
                      Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
 To amend the Small Business Act to provide no interest rate loans to 
 small businesses and non-profit entities impacted by the coronavirus 
                  (COVID-19), and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Too Small to Fail Act''.

SEC. 2. FINANCIAL ASSISTANCE TO SMALL BUSINESSES AND NON-PROFIT 
              ENTITIES.

    Section 7 of the Small Business Act (15 U.S.C. 636) is amended by 
adding at the end the following new subsection:
    ``(k) Coronavirus Related Loans.--
            ``(1) In general.--The Administration shall waive the 
        credit elsewhere requirement of subsection (a)(1) for loans to 
        small businesses and non-profit entities affected by the 
        coronavirus (COVID-19). Such loans shall be provided by the 
        Administration at no interest rate.
            ``(2) Authorization of appropriations.--For an additional 
        amount for the `Disaster Loans Program Account' for the cost of 
        direct loans authorized by section 7(b) of the Small Business 
        Act and for subsidizing interest rates, $350,000,000,000, to 
        remain available until expended, except that--
                    ``(A) not to exceed $225,000,000 may be transferred 
                to and merged with `Salaries and Expenses' for 
                administrative expenses to carry out the disaster loan 
                program authorized by section 7(b) of the Small 
                Business Act; and
                    ``(B) none of the funds provided under this heading 
                may be used for indirect administrative expenses.
            ``(3) Emergency requirement.--The amount provided under 
        paragraph (2) is designated as an emergency requirement 
        pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and 
        Emergency Deficit Control Act of 1985 and the amount designated 
        under such paragraph as an emergency requirement pursuant to 
        such section 251(b)(2)(A)(i) shall be available only if the 
        President subsequently so designates such amount and transmits 
        such designation to the Congress.
            ``(4) Suspension of payment.--The Administration is 
        authorized to suspend the payment of any loan made under this 
        Act to any small business or non-profit entity affected by the 
        coronavirus (COVID-19) for a period determined by the 
        Administration.''.

SEC. 3. EMERGENCY EIDL GRANTS.

    (a) EIDL Emergency Grant.--
            (1) In general.--During the covered period, an eligible 
        entity that applies for a loan under section 7(b)(2) of the 
        Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID-
        19 may request that the Administrator provide an advance in the 
        amount requested by such applicant (not to exceed $15,000) to 
        such applicant within 3 days after the Administrator receives 
        an application from such applicant.
            (2) Verification.--Before disbursing amounts under this 
        subsection, the Administrator shall verify that the applicant 
        is an eligible entity.
            (3) Use of funds.--An advance provided under this 
        subsection may be used to address any allowable purpose for a 
        loan made under section 7(b)(2) of the Small Business Act (15 
        U.S.C. 636(b)(2)), including--
                    (A) providing paid sick leave to employees unable 
                to work due to the direct effect of the COVID-19;
                    (B) maintaining payroll to retain employees during 
                business disruptions or substantial slowdowns;
                    (C) meeting increased costs to obtain materials 
                unavailable from the applicant's original source due to 
                interrupted supply chains;
                    (D) making rent or mortgage payments; and
                    (E) repaying obligations that cannot be met due to 
                revenue losses.
            (4) Repayment.--An applicant shall not be required to repay 
        any amounts of an advance provided under this subsection, even 
        if subsequently denied a loan under section 7(b)(2) of the 
        Small Business Act (15 U.S.C. 636(b)(2)).
            (5) Unemployment grant.--If an applicant that receives an 
        advance under this subsection transfers into the loan program 
        under section 7(a) of the Small Business Act (15 U.S.C. 
        636(a)), the advance amount shall be considered when 
        determining loan forgiveness for a loan for payroll costs made 
        under such section 7(a).
            (6) Authorization of appropriations.--There is authorized 
        to be appropriated to the Small Business Administration 
        $10,000,000,000 to carry out this subsection.
            (7) Termination.--The authority to carry out grants under 
        this subsection shall terminate on December 31, 2020.
    (b) Definitions.--In this Act--
            (1) the term ``covered period'' means the period beginning 
        on January 31, 2020, and ending on December 31, 2020;
            (2) the term ``eligible entity'' means--
                    (A) a startup with not more than 500 employees;
                    (B) any individual who operates under a sole 
                proprietorship or as an independent contractor;
                    (C) a cooperative with not more than 500 employees; 
                or
                    (D) an ESOP (as defined in section 3 of the Small 
                Business Act (15 U.S.C. 632)) with not more than 500 
                employees; and
            (3) the term ``COVID-19'' means the virus SARS-CoV-2 and 
        the resulting disease COVID-19 or another coronavirus with 
        pandemic potential.
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