Title: SBA Business Stabilization Direct Loan Program Act of 2020
Policy area: Commerce

Summary:
SBA Business Stabilization Direct Loan Program Act of 2020
This bill requires the Small Business Administration (SBA) to temporarily make loans directly to small businesses located in a U.S. state or territory with a confirmed or presumed positive case of COVID-19 (i.e., coronavirus disease 2019).
A recipient of such a loan may use the funds to, among other things (1) make periodic payments of principal and interest on outstanding SBA loans; (2) provide benefits to employees such as disability insurance, sick leave, and paid family leave; (3) pay wages to employees; or (4) provide employees and patrons with the necessary items specified by a public health authority to mitigate the spread of the coronavirus.
The SBA shall accept any available collateral to secure such a loan and shall not decline to make a loan to an otherwise eligible borrower due solely to inadequate collateral.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6268 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6268

   To establish a business stabilization direct loan program and the 
   authority to establish a secondary market guarantee in the Small 
            Business Administration, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 12, 2020

Ms. Velazquez introduced the following bill; which was referred to the 
                      Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
   To establish a business stabilization direct loan program and the 
   authority to establish a secondary market guarantee in the Small 
            Business Administration, 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 ``SBA Business Stabilization Direct 
Loan Program Act of 2020''.

SEC. 2. BUSINESS STABILIZATION DIRECT LOAN PROGRAM.

    (a) In General.--The Administrator of the Small Business 
Administration shall carry out a program to make loans directly to 
eligible borrowers.
    (b) Eligible Borrower Defined.--In this section, the term 
``eligible borrower'' means a person who--
            (1) is a small business concern as defined under section 3 
        of the Small Business Act (15 U.S.C. 632); and
            (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)), loans made under this section may be used for the following 
purposes:
            (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 made under this section may not exceed 
        $2,500,000.
            (2) Disbursement.--Not more than 20 percent of the proceeds 
        of a loan made under this section shall be disbursed not later 
        than 5 calendar days after a loan is approved under this 
        section.
            (3) Term.--Loans made under this section shall be for a 
        term of 10 years, and a borrower shall not be required to repay 
        such loan during the 12-month period beginning on the date of 
        disbursement of the loan.
            (4) Interest; fees.--The Administrator may not charge any 
        interest or fees for a loan made under this section.
    (e) Collateral.--The Administrator shall not decline to make a loan 
under this section to an otherwise eligible borrower due solely to 
inadequate collateral. The Administrator shall accept any available 
collateral, including subordinated liens, to secure a loan made under 
this section.
    (f) Sunset.--
            (1) In general.--Except as provided in paragraph (2), the 
        Administrator of the Small Business Administration may not make 
        a loan under this section after September 30, 2022.
            (2) Extension.--The Administrator may extend authority to 
        make loans under this section by an additional 6 months by 
        notifying Congress, in writing, within 10 calendar days before 
        any extension.
    (g) 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).
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated to the Administrator of the Small Business Administration 
such sums as may be necessary to pay for the cost of making 
$25,000,000,000 in direct loans under this section. In the previous 
sentence, the cost of direct loans shall be as defined in section 502 
of the Congressional Budget Act of 1974 (2 U.S.C. 661a).
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