U.S. Sens. Chris Coons (D-Del.) and Ben Cardin (D-Md.), announced their legislation will provide relief for businesses with Small Business Administration loans. The hospitality industry has a sizable percentage of such loans.
The provision is included in the third COVID-19 response package that is expected to be passed today.
An agreement was reached Tuesday night on the $2 trillion bill, which reportedly excludes President Trump’s hotels from the package. Sticking points had included a hotel bailout and a $500 billion fund that according to Democrats lacked oversight.
Under the provision, the SBA will make six months’ worth of existing businesses’ loan payments – both principal and interest. It aims to stabilize the SBA lending portfolio and enable lenders to focus on getting hundreds of billions in new emergency loans out the door, putting a floor under part of the economy heavily impacted by the COVID-19 pandemic, a release from the offices of the two senators stated.
In Delaware, SBA loans provide about $50 million in credit and support about 2,100 jobs each year.
The leading industry supported with SBA loans is Delaware is the accommodation and foodservice industry, according to Coons. In 2018, 170 Delaware food service and accommodation small businesses received SBA loans.
“Small businesses in Delaware and across the country are already facing devastating impacts from the economic fallout of COVID-19,” said Coons, a member of the Senate Small Business Committee and ranking member of the Financial Services and General Government Appropriations Subcommittee, which funds the SBA. “We have no time to waste to help small businesses and the millions of employees whose livelihoods are at stake right now. By stabilizing the existing portfolio of government-back business loans, this legislation enables lenders to provide new, emergency loans more quickly and more extensively. This is a new tool, bolder even than measures used during the Financial Crisis, and I’m optimistic that it will provide the relief that small business owners desperately need during the COVID-19 pandemic.”