September is drawing to a close, and emergency relief payments are drawing to a close. What does this mean for small business owners?
October 1st, 2020, is a significant date for many small business owners across the United States. It marks the end of emergency debt relief payment for many small business owners. But on Friday, September 24th, ranking members of the U.S. Senate Committee on Small Business and Entrepreneurship proposed the Small Business Debt Relief Extension Act. Though the Small Business Debt Relief program has provided $8 billion dollars in relief to U.S. small businesses in the wake of COVID-19 and is being administered via the CARES Act, an extension of the program could mean a great deal to borrowers who are still in financial turmoil. On the whole, the bill intends to prolong financial relief for small businesses through February 2021; and meet the financial burdens of the sectors hardest hit by the pandemic.
What does the Small Business Debt Relief Extension Act intend to do:
- Extend debt relief payments for all small business with an SBA-backed loan—including 7(a), 504, and microloans—for five months, or until February 2021.
- Offer an additional seven months of debt relief for highly vulnerable businesses, and specifically those operating in sectors hardest hit by the pandemic. These sectors include: arts, entertainment, and recreation; accommodation and food services; educational services and charter buses.
- Continue debt relief availability on new SBA loans for a full year, including those approved through September 2021.
- Ensure debt relief benefit holds no tax liability for the participating business.
- The bill also seeks to improve “program integrity and transparency” for PPP and EIDL borrowers. It requires no new spending by Congress, as any new spending would draw upon funds already appropriated under the CARES Act. Read more here.
Why does this matter to you?
If you are in need of extended payment relief, Loan Mantra™ urges you to familiarize yourself with the terms of the current program and the proposed terms of the Debt Relief Extension Act. Nothing has been voted on yet. But your voice—whether as borrower or lender—has never been more critical to shape legislation for the small business community. Here are some things you can do:
- Continue to exercise patience as the program shifts to meet the needs of borrowers. Senator Amy Klobuchar says, “Small businesses continue to face incredible stress and we must do everything we can to help them weather the economic turmoil caused by the coronavirus pandemic.” She, along with many others, are advocates for the industry in a time of urgency and need.
- And just as importantly, get in touch with your elected representatives regarding issues related to your small business. Make sure they know your story and are representing your best interests.
- In a year that has proven why flexibility is everything, make sure you’re primed for smart financing. Let Loan Mantra™ help you prepare for future financing by getting your profile up-to-date on BLUE.