COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options

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COVID-19 Relief Assistance to Small
December December 223, 2020 , 2020
Businesses: Issues and Policy Options
Robert Jay Dilger
The U.S. Small Business Administration (SBA) administers several types of programs to support The U.S. Small Business Administration (SBA) administers several types of programs to support
Senior Specialist in Senior Specialist in
small businesses, including direct disaster loan programs for businesses, homeowners, and small businesses, including direct disaster loan programs for businesses, homeowners, and
American National American National
renters; loan guaranty and venture capital programs; management and technical assistance renters; loan guaranty and venture capital programs; management and technical assistance
Government Government
training programs; and contracting programs. training programs; and contracting programs.

~~Bruce R. Lindsay~~
Congressional interest in these programs has Congressional interest in these programs has always been high, primarily because small always been high, primarily because small
~~Analyst in American~~
businesses are viewed as a means to stimulate businesses are viewed as a means to stimulate Bruce R. Lindsay economic activity and create jobs, but it has economic activity and create jobs, but it has
~~National Government~~
become especially acute in the wake of the become especially acute in the wake of the Specialist in American Coronavirus Disease 2019 (COVID-19) pandemic’s Coronavirus Disease 2019 (COVID-19) pandemic’s

widespread adverse economic impact on the widespread adverse economic impact on the ~~national economy.~~
~~Sean Lowry~~
National Government national economy. This report provides a brief description of the SBA’s programs and examines congressional This report provides a brief description of the SBA’s programs and examines congressional
~~Analyst in Public Finance~~

Sean Lowry action to assist small businesses during and immediately following the Great Recession (2007- action to assist small businesses during and immediately following the Great Recession (2007-
Analyst in Public Finance 2009) and during the COVID-19 pandemic, including the following: 2009) and during the COVID-19 pandemic, including the following:

  P.L. 116-123, the Coronavirus Preparedness and Response Supplemental Appropriations P.L. 116-123, the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Act, 2020,
provided the SBA an additional $20 millionprovided the SBA an additional $20 million for SBA disaster assistance administrative expenses and made for SBA disaster assistance administrative expenses and made
economic injury from the coronavirus an eligible expense for SBA’s Economic Injury Disaster Loans economic injury from the coronavirus an eligible expense for SBA’s Economic Injury Disaster Loans
(EIDL). (EIDL).
 P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), among other  P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), among other
provisions, provided $349 billion to support SBA’s Section 7(a) lending programs and create a new provisions, provided $349 billion to support SBA’s Section 7(a) lending programs and create a new
Paycheck Protection Program (PPP). PPP loans have a 100% SBA loan guarantee, a 10-year maximum Paycheck Protection Program (PPP). PPP loans have a 100% SBA loan guarantee, a 10-year maximum
term, and a not-to-exceed 4% interest rate to assist small businesses, small 501(c)(3) nonprofit term, and a not-to-exceed 4% interest rate to assist small businesses, small 501(c)(3) nonprofit
organizations, and small 501(c)(19) veterans organizations that have been adversely affected by COVID-organizations, and small 501(c)(19) veterans organizations that have been adversely affected by COVID-
19. Loan deferment and forgiveness are provided under specified conditions. The loans were originally 19. Loan deferment and forgiveness are provided under specified conditions. The loans were originally
available through June 30, 2020, and had a two-year term at 1% interest. available through June 30, 2020, and had a two-year term at 1% interest.
 P.L. 116-139, the Paycheck Protection Program and Health Care Enhancement Act (Enhancement Act),  P.L. 116-139, the Paycheck Protection Program and Health Care Enhancement Act (Enhancement Act),
among other provisions, among other provisions, ~~appropriated an additional~~provided $321.335 billion $321.335 billion ~~for the PPP~~to support up to $659 billion in Section 7(a) lending. .
 P.L. 116-142, the Paycheck Protection Program Flexibility Act, among other provisions, extended the PPP  P.L. 116-142, the Paycheck Protection Program Flexibility Act, among other provisions, extended the PPP
loan forgiveness covered period from 8 weeks after the loan’s origination date to the earlier of 24 weeks or loan forgiveness covered period from 8 weeks after the loan’s origination date to the earlier of 24 weeks or
December 31, 2020. PPP borrowers December 31, 2020. PPP borrowers ~~may elect to remain under~~could use the 8-week-covered period the 8-week-covered period if they received their loan prior to enactment (June 5, 2020). .
 P.L. 116-147, to extend the authority for commitments for the paycheck protection program, extended the  P.L. 116-147, to extend the authority for commitments for the paycheck protection program, extended the
PPP covered loan period from June 30, 2020, to August 8, 2020, and authorized $659 billion for PPP loan PPP covered loan period from June 30, 2020, to August 8, 2020, and authorized $659 billion for PPP loan
commitments and $30 billion for 7(a) loan commitments . commitments and $30 billion for 7(a) loan commitments .
 H.R.  H.R. ~~6800, the Heroes Act, S. 4321, the Continuing Small Business Recovery and Paycheck Protection~~
~~Program Act, and H.R. 925, the (updated) Heroes Act, would make numerous changes to the PPP program.~~
~~Some of the CARES Act’s provisions (e.g., fee waivers and increased loan limits) were used in legislation during the 111th~~
~~Congress to assist small businesses during and immediately following the Great Recession. The main difference between that~~
~~legislation and the CARES Act is that the CARES Act includes loan deferrals, loan forgiveness, and greatly expanded~~
~~eligibility, including, for the first time, specified types of nonprofit organizations.~~
~~The PPP started on April 3, 2020. The SBA stopped accepting new PPP loan applications on April 15, 2020, because the~~
~~SBA neared its $349 billion authorization limit for Section 7(a) lending, which includes the PPP. The SBA started accepting~~
~~PPP loan applications once again on April 27, 2020, following the Enhancement Act’s appropriating an additional $321.335~~
~~billion to support up to $659 billion in Section 7(a) lending. As required by the CARES Act, the SBA stopped accepting new~~
~~PPP loan applications at midnight on June 30, 2020. The SBA resumed accepting PPP loan applications on July 6, 2020,~~
~~following P.L. 116-147’s enactment and, as required by that act, stopped accepting PPP loan applications on August 8, 2020.~~
~~One lesson learned from the actions taken during the 111th Congress~~ 133, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Division M, Title III of the Consolidated Appropriations Act of 2021), would, among other provisions, extend the PPP through March 31, 2021, increase the program’s authorization amount from $659 billion to $806.45 billion, and allow second-draw PPP loans of up to $2 million. Some of the provisions enacted during the 116th Congress to assist small businesses adversely affected by the COVID-19 pandemic (e.g., SBA fee waivers and increased loan limits) were enacted during the 111th Congress to assist small businesses during and immediately following the Great Recession. The main difference between the legislation enacted during the 111th and 116th Congresses is that the legislation enacted during the 116th Congress has a much broader scope and cost than the legislation enacted during the 111th Congress and includes loan deferrals, loan forgiveness, and greatly expanded eligibility, including, for the first time, specified types of nonprofit organizations. One lesson learned from the actions taken to assist small businesses during and immediately to assist small businesses during and immediately
following the Great Recession is the potential benefits that can be derived from providing additional funding for the SBA’s following the Great Recession is the potential benefits that can be derived from providing additional funding for the SBA’s
~~Congressional Research Service~~

~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

Office of Inspector General (OIG) and the Government Accountability Office (GAO). GAO and the SBA’s OIG can provide Office of Inspector General (OIG) and the Government Accountability Office (GAO). GAO and the SBA’s OIG can provide
Congress information that could prove useful as Congress engages in congressional oversight of the SBA’s administration of Congress information that could prove useful as Congress engages in congressional oversight of the SBA’s administration of
legislation to address COVID-legislation to address COVID- 19’s adverse economic impact on small businesses, provide an early warning if unforeseen 19’s adverse economic impact on small businesses, provide an early warning if unforeseen
administrative problems should administrative problems should Congressional Research Service COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options arise, and, through investigations and audits, serve as a deterrent to fraud. Requiring the SBA arise, and, through investigations and audits, serve as a deterrent to fraud. Requiring the SBA
to report regularly on its implementation of the CARES Act could promote transparency and assist Congress in performing to report regularly on its implementation of the CARES Act could promote transparency and assist Congress in performing
its oversight responsibilities. In addition, requiring both output and outcome performance measures and requiring the SBA to its oversight responsibilities. In addition, requiring both output and outcome performance measures and requiring the SBA to
report this report this information to Congress and the public by posting that information on the SBA’s website could enhance information to Congress and the public by posting that information on the SBA’s website could enhance
congressional oversight and public confidence in the SBA’s efforts to assist small businesses. congressional oversight and public confidence in the SBA’s efforts to assist small businesses.
Congressional Research Service Congressional Research Service

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Introduction
The Smal Business Administration (SBA) administers several types of programs to support smal The Smal Business Administration (SBA) administers several types of programs to support smal
businesses, including businesses, including
 direct disaster loan programs for businesses, homeowners, and renters to assist  direct disaster loan programs for businesses, homeowners, and renters to assist
their recovery from natural disasters; their recovery from natural disasters;
 loan guaranty and venture capital programs to enhance smal business access to  loan guaranty and venture capital programs to enhance smal business access to
capital; capital;
 smal business management and technical assistance training programs to assist  smal business management and technical assistance training programs to assist
business formation and expansion; and business formation and expansion; and
 contracting programs to increase smal business opportunities in federal  contracting programs to increase smal business opportunities in federal
contracting. contracting.
Congressional interest in the SBA’s programs has increased in recent years, primarily because Congressional interest in the SBA’s programs has increased in recent years, primarily because
smal businesses are viewed as a means to stimulate economic activity and create jobs. smal businesses are viewed as a means to stimulate economic activity and create jobs.
Congressional interest, however, has become especial y acute in the wake of the Coronavirus Congressional interest, however, has become especial y acute in the wake of the Coronavirus
Disease 2019 (COVID-19) pandemic’s widespread adverse economic impact on the national Disease 2019 (COVID-19) pandemic’s widespread adverse economic impact on the national
economy, including productivity losses, supply chain disruptions, major labor dislocation, and economy, including productivity losses, supply chain disruptions, major labor dislocation, and
significant financial pressure on both businesses and households. significant financial pressure on both businesses and households.
This report begins with an overview of legislation considered during the 116th Congress to assist smal businesses adversely affected by the COVID-19 pandemic. It then provides an overview of SBA disaster loans and discusses various issues related to providing disaster assistance to smal businesses adversely affected by COVID-19. It then presents an overview of SBA access to capital programs (including the 7(a) loan guarantee, 504/CDC loan guarantee, and Microloan programs), SBA management and technical training programs (Smal Business Development Centers [SBDCs], Women Business Centers [WBCs], SCORE, and Microloan technical assistance), and SBA contracting programs. This is followed by a discussion of legislation enacted during the 111th Congress to assist smal businesses during and immediately following the Great Recession (2007-2009). As wil be discussed, some of the provisions included in legislation enacted during the 116th Congress to assist smal businesses adversely affected by the COVID-19 pandemic were included in legislation enacted during the 111th Congress to assist smal businesses during and immediately following the Great Recession, including SBA fee waivers and increased loan limits. The main difference between the legislation enacted during the 111th and 116th Congresses is that the legislation enacted during the 116th Congress is much larger in scope and cost than the legislation enacted during the 111th Congress and includes loan deferrals, loan forgiveness, and greatly expanded eligibility, including, for the first time, specified types of nonprofit organizations. Legislative Efforts to Assist Small Businesses During the 116th Congress P.L. 116-123, the Coronavirus Preparedness and Response Supplemental Appropriations Act, P.L. 116-123, the Coronavirus Preparedness and Response Supplemental Appropriations Act,
2020, was the first act to include provisions targeting SBA assistance to smal businesses 2020, was the first act to include provisions targeting SBA assistance to smal businesses
adversely affected by COVID-19. The act provided the SBA an additional $20 mil ion for SBA adversely affected by COVID-19. The act provided the SBA an additional $20 mil ion for SBA
disaster assistance administrative expenses and deemed the coronavirus to be a disaster under the disaster assistance administrative expenses and deemed the coronavirus to be a disaster under the
Congressional Research Service 1 link to page 42 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options SBA’s Economic Injury Disaster Loan (EIDL) program. This change made economic injury from SBA’s Economic Injury Disaster Loan (EIDL) program. This change made economic injury from
the coronavirus an eligible EIDL expense. the coronavirus an eligible EIDL expense.
Congress followed with P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act Congress followed with P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act). The CARES Act made numerous changes to SBA programs, including the creation (CARES Act). The CARES Act made numerous changes to SBA programs, including the creation
of the Paycheck Protection Program (PPP), which are loans 100% guaranteed by the SBA with a of the Paycheck Protection Program (PPP), which are loans 100% guaranteed by the SBA with a
maximum term of 10 years and a maximum interest rate of no more than 4%. These loans are maximum term of 10 years and a maximum interest rate of no more than 4%. These loans are
available to smal businesses, smal 501(c)(3) nonprofit organizations, and smal 501(c)(19) available to smal businesses, smal 501(c)(3) nonprofit organizations, and smal 501(c)(19)
veterans organizations—and are eligible for loan forgiveness. The SBA announced that the loans veterans organizations—and are eligible for loan forgiveness. The SBA announced that the loans
would have a two-year term at a 1.0% interest rate. would have a two-year term at a 1.0% interest rate.
The CARES Act The CARES Act ~~provides~~provided deferment relief for PPP loans and existing loans made under the 7(a), deferment relief for PPP loans and existing loans made under the 7(a),
504/CDC, and Microloan programs. The act also 504/CDC, and Microloan programs. The act also ~~appropriates~~appropriated $349 bil ion for PPP loan $349 bil ion for PPP loan
guarantees and subsidies (to remain available through FY2021), $10 bil ion for Emergency EIDL guarantees and subsidies (to remain available through FY2021), $10 bil ion for Emergency EIDL
Advance Payment grants, $675 mil ion for the SBA’s salaries and expenses account, $562 mil ion Advance Payment grants, $675 mil ion for the SBA’s salaries and expenses account, $562 mil ion
for disaster loans, $25 mil ion for the SBA’s Office of Inspector General (OIG), $265 mil ion for for disaster loans, $25 mil ion for the SBA’s Office of Inspector General (OIG), $265 mil ion for
entrepreneurial development programs ($192 mil ion for smal business development centers entrepreneurial development programs ($192 mil ion for smal business development centers
(SBDCs), $48 mil ion for women’s business centers (WBCs), and $25 mil ion for SBA resource (SBDCs), $48 mil ion for women’s business centers (WBCs), and $25 mil ion for SBA resource
partners to provide online information and training), and $17 bil ion for six months of debt relief partners to provide online information and training), and $17 bil ion for six months of debt relief
for the SBA’s 7(a), 504/CDC, and Microloan programs. for the SBA’s 7(a), 504/CDC, and Microloan programs.
A summary of the CARES Act’s major smal business-related provisions is presented in the A summary of the CARES Act’s major smal business-related provisions is presented in the
Appendix.
~~Congressional Research Service~~
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~~link to page 41~~ ~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

The CARES Act was enacted on March 27, 2020. On March 30, 2020, the SBA updated its The CARES Act was enacted on March 27, 2020. On March 30, 2020, the SBA updated its
website to al ow COVID-19-related EIDL applicants an option to request an Emergency EIDL website to al ow COVID-19-related EIDL applicants an option to request an Emergency EIDL
Advance Payment grant.1 Advance Payment grant.1
The SBA started accepting PPP loan applications on April 3, 2020.2 Because the SBA neared its The SBA started accepting PPP loan applications on April 3, 2020.2 Because the SBA neared its
$349 bil ion authorization limit for Section 7(a) lending, which at that time included the PPP, the $349 bil ion authorization limit for Section 7(a) lending, which at that time included the PPP, the
SBA stopped accepting new PPP loan applications on April 15, 2020.3 A total of 1,661,367 PPP SBA stopped accepting new PPP loan applications on April 15, 2020.3 A total of 1,661,367 PPP
loans were approved by 4,975 lenders, totaling $342,277,999,103. Most of the loans (74%) were loans were approved by 4,975 lenders, totaling $342,277,999,103. Most of the loans (74%) were
for less than $150,000. The average loan amount was $206,022.4 for less than $150,000. The average loan amount was $206,022.4
The SBA also stopped accepting COVID-19-related EIDL and Emergency EIDL Advance The SBA also stopped accepting COVID-19-related EIDL and Emergency EIDL Advance
Payment grant applications on April 15, because the SBA was approaching its disaster loan Payment grant applications on April 15, because the SBA was approaching its disaster loan
assistance credit subsidy limit.5 COVID-19-related EIDL and Emergency EIDL Advance assistance credit subsidy limit.5 COVID-19-related EIDL and Emergency EIDL Advance
Payment grant applications already received continued to be processed on a first-in first-out basis. Payment grant applications already received continued to be processed on a first-in first-out basis.
~~The SBA began accepting new EIDL and Emergency EIDL Advance Payment grant applications~~
~~on a limited basis on May 4 to accommodate agricultural businesses that were provided EIDL~~
~~eligibility by the Paycheck Protection Program and Healthcare Enhancement Act (P.L. 116-139).~~
~~The SBA also processed applications from agricultural businesses that had submitted an EIDL~~
~~application prior to the legislative change. Those agricultural businesses did not need to reapply.~~
~~Al other EIDL loan applications that were submitted before the SBA stopped accepting new~~
~~applications on April 15 continued to be processed on a first-in, first-out basis.6 The SBA resumed~~
~~the acceptance of new EIDL and Emergency EIDL Advance Payment applications from al~~
~~borrowers on June 15, 2020.7~~
~~A summary of the Paycheck Protection Program and Healthcare Enhancement Act’s major smal~~
~~business-related provisions is presented in the Appendix.~~
~~On July 11, 2020, the SBA announced that it had stopped accepting Emergency EIDL Advance~~
~~Payment grant applications because the program had reached its authorization limit of $20 bil ion~~

1 EIDL applicants that applied for a COVID-19-related EIDL prior to March 30, 2020, were required to reapply for an 1 EIDL applicants that applied for a COVID-19-related EIDL prior to March 30, 2020, were required to reapply for an
Emergency EIDL Advance Payment grant. Emergency EIDL Advance Payment grant.
2 T he SBA accepted PPP loan applications from independent contractors and self -employed starting on April 10, 2020. 2 T he SBA accepted PPP loan applications from independent contractors and self -employed starting on April 10, 2020.
3 U.S. Small Business Administration (SBA), “Statement by Secretary Mnuchin and Administrator Carranza on the 3 U.S. Small Business Administration (SBA), “Statement by Secretary Mnuchin and Administrator Carranza on the
Paycheck Protection Program and Economic Injury Disaster Loan ProgramPaycheck Protection Program and Economic Injury Disaster Loan Program ,” April 15, 2020, at https://www.sba.gov/,” April 15, 2020, at https://www.sba.gov/
about-sba/sba-newsroom/press-releases-media-advisories/statement -secretary-mnuchin-and-administrator-carranza-about-sba/sba-newsroom/press-releases-media-advisories/statement -secretary-mnuchin-and-administrator-carranza-
paycheck-protection-program-and-economic (hereinafter SBA, “ Statement by Secretary Mnuchin and Administrator paycheck-protection-program-and-economic (hereinafter SBA, “ Statement by Secretary Mnuchin and Administrator
Carranza on the Paycheck Protection Program and Economic Injury Disaster Loan Program”). Carranza on the Paycheck Protection Program and Economic Injury Disaster Loan Program”).
P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) authorized $349 billion for P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) authorized $349 billion for
general business loans authorized under Section 7(a) of the Small Business Act. T his authorizationgeneral business loans authorized under Section 7(a) of the Small Business Act. T his authorization limit applied to the limit applied to the
7(a) lending programs as well as to the Paycheck Protection Program (PPP). 7(a) lending programs as well as to the Paycheck Protection Program (PPP).
4 SBA, “Paycheck Protection Program (PPP) Report through April 16, 2020, at 12 PM EST ,” at https://content.sba.gov/ 4 SBA, “Paycheck Protection Program (PPP) Report through April 16, 2020, at 12 PM EST ,” at https://content.sba.gov/
sites/default/files/2020-05/PPP%20Deck%20copy.pdf. sites/default/files/2020-05/PPP%20Deck%20copy.pdf.
5 SBA, “Statement by Secretary Mnuchin and 5 SBA, “Statement by Secretary Mnuchin and ~~Administrator~~Administ rator Carranza on the Paycheck Protection Program and Congressional Research Service 2 link to page 42 link to page 42 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options ~~Carranza on the Paycheck Protection Program and~~
~~Economic Injury Disaster Loan Program.”~~
~~6 SBA, “Economic Injury Disaster Loan Emergency Advance,” May 4, 2020, at https://www.sba.gov/funding-~~
~~programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance.~~
~~7 SBA, “SBA’s Economic Injury Disaster Loans and Advance Program Reopened to All Eligible Small Businesses and~~
~~Non-Profits Impacted by COVID-19 Pandemic,” June 15, 2020, at https://www.sba.gov/about -sba/sba-newsroom/~~
~~press-releases-media-advisories/sbas-economic-injury-disaster-loans-and-advance-program-reopened-all-eligible-~~
~~small-businesses-and?utm_medium=email&utm_source=govdelivery.~~
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~~in grants.8 The SBA approved 5,781,390 Emergency EIDL Advance Payment grant applications.9~~
~~As of November 22, 2020, the SBA had approved 3,645,556 COVID-19-related EIDL loans,~~
~~totaling over $194.3 bil ion.10~~
The SBA resumed the acceptance of new PPP loan applications on April 27, 2020, following The SBA resumed the acceptance of new PPP loan applications on April 27, 2020, following
enactment of the Paycheck Protection Program and enactment of the Paycheck Protection Program and ~~Health Care Enhancement Act. The act~~
Healthcare Enhancement Act (Enhancement Act; P.L. 116-139) on April 24, 2020. The Enhancement Act increased the SBA’s Section 7(a) loan authorization limit from $349 bil ion to $659 bil ionincreased the SBA’s Section 7(a) loan authorization limit from $349 bil ion to $659 bil ion, and and
appropriated $321.335 bil ion to support that level of lending. The act also appropriated $50 appropriated $321.335 bil ion to support that level of lending. The act also appropriated $50
bil ion for EIDL, $10 bil ion for bil ion for EIDL, $10 bil ion for Emergency EIDL Emergency EIDL ~~grants~~advance payments (grants), and $2.1 bil ion for SBA salaries and , and $2.1 bil ion for SBA salaries and
~~expenses.~~
~~As of August 8, 2020, the SBA had approved, after cancel ations, 5,212,128 PPP loans totaling~~
~~over $525 bil ion (see Table 1). For comparative purposes, that loan approval amount is more~~
~~than the amount the SBA has approved in al of its loan programs, including disaster loans, during~~
~~the last 29 years (from October 1, 1991, through December 31, 2019; $509.9 bil ion).11~~
~~Table 1. Paycheck Protection Program Loan Approvals, After Cancellations,~~
~~Through August 8, 2020~~
~~Average Loan~~
~~Number of Loans~~
~~Amount~~
~~Characteristic~~
~~Approved~~
~~Amount Approved~~
~~Approved~~
~~Lenders~~
~~Approvals~~
~~5,212,128~~
~~$525,012,201,124~~
~~$100,729~~
~~5,460~~
~~(after cancel ations)~~
Source: Smal Business Administration (SBA), “Additional Program Information: approvals as of August 8, 2020,”
~~at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program.~~
Note: Cancel ations include duplicative loans, loans not closed for any reason, and loans that have been paid off.
~~As of August 8, 2020, four industry sectors had received at least 10% of PPP net loan amounts:~~
~~ Health Care and Social Assistance (12.9%);~~
~~ Professional, Scientific, and Technical Services (12.7%);~~
~~ Construction (12.4%); and~~
~~ Manufacturing (10.3%).12~~

~~8 SBA, “SBA provided $20 billion to Small Businesses and Non-Profits T hrough the Emergency Economic Injury~~
~~Disaster Loan Advance Program,” press release, July 11, 2020, at https://www.sba.gov/about -sba/sba-newsroom/press-~~
~~releases-media-advisories/sba-provided-20-billion-small-businesses-and-non-profits-through-economic-injury-disaster-~~
~~loan.~~
~~As of April 24, 2020, the SBA had approved nearly 1.2 million Emergency EIDL grants, totaling $4.8 billion . See~~
~~SBA, “COVID-19 EIDL Advance Reports, April 24, 2020,” at https://www.sba.gov/document/report-covid-19-eidl-~~
~~advance-report -04-24-20.~~
~~9 SBA, “Disaster Assistance Update EIDL Advance July 15, 2020 (figures as of July 14, 2020),” at~~
~~https://www.sba.gov/sites/default/files/2020-07/EIDL%20COVID-19%20Advance%207.15.20.pdf.~~
~~10 SBA, “ Disaster Assistance Update Nationwide EIDL Loans November 23, 2020 (figures as of November 22, 2020),”~~
~~at https://www.sba.gov/document/report -covid-19-eidl-loans-report-11-23-20.~~
~~11 SBA, “WDS Lending Data File,” October 18, 2019; and SBA, “Small Business Administration loan program~~
~~performance: T able 2 - Gross Approval Amount by Program, December 31, 2019,” at https://www.sba.gov/document/~~
~~report -small-business-administration-loan-program-performance.~~
~~12 SBA, “Paycheck Protection Program (PPP) Report: Approvals through August 8, 2020; Industry by NAICS Sector,”~~
~~at https://www.sba.gov/document/report -paycheck-protection-program-report -through-august-8-2020.~~
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~~On May 15, 2020, the House passed~~ expenses. The SBA began accepting new EIDL and Emergency EIDL Advance Payment grant applications on a limited basis on May 4 to accommodate agricultural businesses that were provided EIDL eligibility by the Enhancement Act. The SBA also processed applications from agricultural businesses that had submitted an EIDL application prior to the legislative change. Those agricultural businesses did not need to reapply. Al other EIDL loan applications that were submitted before the SBA stopped accepting new applications on April 15 continued to be processed on a first-in, first-out basis.6 The SBA resumed the acceptance of new EIDL and Emergency EIDL Advance Payment applications from al borrowers on June 15, 2020.7 A summary of the Enhancement Act’s major smal business-related provisions is presented in the Appendix. Numerous proposals to amend the PPP were introduced throughout the spring, summer, and fal of 2020, including  H.R. 6800, the Health and Economic Recovery Omnibus ~~H.R. 6800, the Health and Economic Recovery Omnibus~~
Emergency Solutions Emergency Solutions Act (Heroes Act), which was passed by the House on May 15, 2020;  S. 4321, the Continuing Smal Business Recovery and Paycheck Protection Program Act, which was introduced in the Senate on July 27, 2020; and  H.R. 925, the (updated) Heroes Act, which was passed by the House on October 1, 2020. A summary of these bil s’ major smal business-related provisions is presented in the Appendix. As negotiations among House and Senate leaders continued over these and other legislative proposals, several changes to the PPP were agreed to. For example, ~~Act (Heroes Act). The Heroes Act, among other provisions, would~~
~~ expand PPP eligibility to include al 501(c) nonprofit organizations;~~
~~ provide smal businesses additional flexibility by extending the PPP loan~~
~~forgiveness covered period from 8 weeks to the earlier of 24 weeks or December~~
~~31, 2020;~~
~~ eliminate the 75%/25% rule on the use of PPP loan proceeds for loan forgiveness~~
~~purposes;~~
~~ provide borrowers a “safe harbor” from the loan forgiveness rehiring requirement~~
~~if the borrower is unable to rehire an individual who was an employee of the~~
~~recipient on or before February 15, 2020, or if the borrower can demonstrate an~~
~~inability to hire similarly qualified employees on or before December 31, 2020;~~
~~ establish a minimum PPP loan maturity of five years to enable smal businesses~~
~~to amortize the loan over a longer period of time, which lowers monthly~~
~~payments; and~~
~~ appropriate another $10 bil ion for Emergency EIDL grants.~~
~~A summary of the Heroes Act’s major smal business-related provisions is presented in the~~
Appendix.
~~P.L. 116-142, the Paycheck~~ P.L. 116-142, the Paycheck Protection Program Flexibility Act, Protection Program Flexibility Act, ~~was~~ enacted on June 5, 2020enacted on June 5, 2020~~. The~~
~~act~~, among other provisions, , among other provisions,
  ~~extends~~extended the PPP loan forgiveness covered period from 8 weeks after the loan’s the PPP loan forgiveness covered period from 8 weeks after the loan’s
origination date to the earlier of 24 weeks after the loan’s origination date or origination date to the earlier of 24 weeks after the loan’s origination date or
December 31, 2020; December 31, 2020;
  ~~provides~~provided borrowers that received a PPP loan prior to the date of enactment (June borrowers that received a PPP loan prior to the date of enactment (June
5, 2020) the option to use the CARES Act’s loan forgiveness covered period of 5, 2020) the option to use the CARES Act’s loan forgiveness covered period of
eight weeks after the loan’s origination date; eight weeks after the loan’s origination date;
  ~~replaces~~replaced the 75%/25% rule on the use of PPP loan proceeds for loan forgiveness the 75%/25% rule on the use of PPP loan proceeds for loan forgiveness
purposes with the requirement that at least 60% of the loan proceeds be used for purposes with the requirement that at least 60% of the loan proceeds be used for
Economic Injury Disaster Loan Program.” 6 SBA, “Economic Injury Disaster Loan Emergency Advance,” May 4, 2020, at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance. 7 SBA, “SBA’s Economic Injury Disaster Loans and Advance Program Reopened to All Eligible Small Businesses and Non-Profits Impacted by COVID-19 Pandemic,” June 15, 2020, at https://www.sba.gov/about -sba/sba-newsroom/press-releases-media-advisories/sbas-economic-injury-disaster-loans-and-advance-program-reopened-all-eligible-small-businesses-and?utm_medium=email&utm_source=govdelivery. Congressional Research Service 3 link to page 42 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options payroll costs and up to 40% be used for covered mortgage interest, rent, and payroll costs and up to 40% be used for covered mortgage interest, rent, and
utility payments;utility payments;138
  ~~provides~~provided borrowers a “safe harbor” from the loan forgiveness rehiring borrowers a “safe harbor” from the loan forgiveness rehiring
requirement if the borrower is unable to rehire an individual who was an requirement if the borrower is unable to rehire an individual who was an
employee of the recipient on or before February 15, 2020, or if the borrower can employee of the recipient on or before February 15, 2020, or if the borrower can
demonstrate an inability to hire similarly qualified employees on or before demonstrate an inability to hire similarly qualified employees on or before
December 31, 2020; December 31, 2020;
  ~~provides~~provided borrowers another “safe harbor” from the loan forgiveness rehiring borrowers another “safe harbor” from the loan forgiveness rehiring
requirement if the business can document that it was unable to operate between requirement if the business can document that it was unable to operate between
February 15, 2020, and the end of the covered period at the same level of February 15, 2020, and the end of the covered period at the same level of
business activity as before February 15, 2020, due to compliance with business activity as before February 15, 2020, due to compliance with
requirements established or guidance issued between March 1, 2020, and requirements established or guidance issued between March 1, 2020, and
December 31, 2020, by the U.S. Department of Health and Human Services, the December 31, 2020, by the U.S. Department of Health and Human Services, the

~~13 If a borrower uses less than 60% of the PPP loan amount for payroll costs during the forgiveness covered period, the~~
~~borrower will cont inue to be eligible for partial loan forgiveness, subject to at least 60% of the loan forgiveness amount~~
~~having been used for payroll costs.~~
~~Congressional Research Service~~
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~~link to page 41~~ ~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

Centers for Disease Control and Prevention, or the Occupational Safety and Centers for Disease Control and Prevention, or the Occupational Safety and
Health Administration, related to the maintenance of standards for sanitation, Health Administration, related to the maintenance of standards for sanitation,
social distancing, or any other worker or customer safety requirement related to social distancing, or any other worker or customer safety requirement related to
COVID-19 (the SBA indicates that this safe harbor includes state and local COVID-19 (the SBA indicates that this safe harbor includes state and local
government directives based on these requirements or guidance);government directives based on these requirements or guidance);14
~~ establishes~~9  established a minimum PPP loan maturity of five years for loans made on or after a minimum PPP loan maturity of five years for loans made on or after
the date of enactment; and the date of enactment; and
  ~~extends~~extended the PPP loan deferral period from six months (under SBA regulations) the PPP loan deferral period from six months (under SBA regulations) to
to the date that the SBA remits the borrower’s loan forgiveness amount to the lender the date that the SBA remits the borrower’s loan forgiveness amount to the lender
or, if the borrower does not apply for loan forgiveness, 10 months after the end of or, if the borrower does not apply for loan forgiveness, 10 months after the end of
the borrower’s loan forgiveness covered period. the borrower’s loan forgiveness covered period.
Under the act, June 30, 2020, remained the last date on which a PPP loan application could be Under the act, June 30, 2020, remained the last date on which a PPP loan application could be
approved. A summary of the Paycheck Protection Program Flexibility Act is presented in the approved. A summary of the Paycheck Protection Program Flexibility Act is presented in the
Appendix.
As required by the CARES Act, the SBA stopped accepting new PPP loan applications at As required by the CARES Act, the SBA stopped accepting new PPP loan applications at
midnight on June 30, 2020. midnight on June 30, 2020.
~~On July 4, 2020, President Trump signed into law~~ P.L. 116-147, to extend the authority for P.L. 116-147, to extend the authority for
commitments for the paycheck protection program and separate amounts authorized for other commitments for the paycheck protection program and separate amounts authorized for other
loans under Section 7(a) of the Smal Business Act, and for other purposesloans under Section 7(a) of the Smal Business Act, and for other purposes~~. The law~~, enacted on July 4, 2020, extended the extended the
PPP covered loan period from June 30, 2020, to August 8, 2020, and authorized $659 bil ionPPP covered loan period from June 30, 2020, to August 8, 2020, and authorized $659 bil ion for for
PPP loan commitments and $30 bil ion for 7(a) loan commitments. The Senate passed the bil by PPP loan commitments and $30 bil ion for 7(a) loan commitments. The Senate passed the bil by
voice vote on June 30, 2020, and the voice vote on June 30, 2020, and the House passed it by unanimous consent on July 1, 2020.House passed it by unanimous consent on July 1, 2020.
~~As required by P.L. 116-147, the SBA stopped accepting PPP loan applications on August 8,~~
~~2020.~~
~~S. 4321, the Continuing Smal Business Recovery and Paycheck Protection Program Act, was~~
~~introduced on July 27, 2020. Among other provisions, it would~~
~~ extend the PPP loan covered period to December 31, 2020, and reduce the~~
~~maximum PPP loan amount from $10 mil ion to $2 mil ion;~~
~~ expand PPP forgivable expenses to include covered operations expenditures (e.g.,~~
~~software, cloud computing, and other human resources and accounting needs),~~
~~property damages due to public disturbances that occurred during 2020 (not~~
~~covered by insurance or other compensation), covered supplier costs essential to~~
~~the recipient’s current operations, and covered worker protection expenditures to~~
~~comply with federal health and safety guidelines related to COVID-19;~~
~~ al ow borrowers to select a preferred 8-week period after the loan’s origination~~
~~date through December 31, 2020, for determining loan forgiveness;~~
~~ create simplified loan forgiveness application processes for loans under $150,000~~
~~and for loans between $150,000 and $2 mil ion. The SBA would retain the right~~
~~to review and audit these loans for fraud. Reporting of demographic information~~
~~would be optional;~~
~~ expand eligibility to include certain 501(c)(6) organizations, including Chambers~~
~~of Commerce and Destination Marketing Organizations, that have 300 or fewer~~

~~14 SBA and T reasury, “Business Loan Program T emporary Changes; Paycheck Protection Program – Revisions to Loan~~
~~Forgiveness and Loan Review Procedures Interim Final Rules,” 85 Federal Register 38309, June 26, 2020.~~
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~~link to page 41 link to page 41~~ ~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

~~employees, do not receive more than 10% of their receipts from lobbying, and~~
~~whose lobbying activities do not comprise more than 10% of their total activities.~~
~~Recipients cannot use any loan proceeds for lobbying activities;~~
~~ al ow second PPP “draw” loans through December 31, 2020, for PPP borrowers~~
~~that meet the SBA’s revenue standard, if applicable, have not more than 300~~
~~employees, and can demonstrate at least a 50% reduction in gross receipts in the~~
~~first or second quarter of 2020 relative to the same 2019 quarter. Several types of~~
~~PPP eligible entities, such as publicly traded companies, would be ineligible for a~~
~~second loan. The maximum loan size would equal 2.5 times average monthly~~
~~payroll costs, up to $2 mil ion (not more than $10 mil ion in the aggregate). Full~~
~~loan forgiveness would be based on a 60/40 cost al ocation between payroll and~~
~~eligible nonpayroll costs; and~~
~~ increase the PPP authorization amount from $659 bil ion to $749 bil ion, rescind~~
~~$100 bil ion from the SBA’s business loan program account, and appropriate an~~
~~additional $190 bil ion for the cost of PPP and PPP second draw loans. In~~
~~funding, $25 bil ion would be set-aside for entities employing 10 or fewer~~
~~employees and $10 bil ion would be set-aside for community lenders.~~
~~A summary of the Continuing Smal Business Recovery and Paycheck Protection Program Act’s~~
~~major smal business-related provisions is presented in the Appendix.~~
~~On October 1, 2020, the House passed H.R. 925, the (updated) Heroes Act. Among other~~
~~provisions, it would make numerous changes to the PPP. For example, the bil would~~
~~ al ow PPP borrowers that have less than 200 employees and can document~~
~~quarterly revenue losses of at least 25% to receive a second PPP loan of up to $2~~
~~mil ion;~~
~~ expand the list of al owable uses of proceeds and loan forgiveness to include~~
~~personal protective equipment, supplier costs, and costs related to property~~
~~damage from public disturbances;~~
~~ exclude publicly traded entities from being eligible for PPP loans;~~
~~ exclude businesses that are 51% or more foreign owned, controlled, and managed~~
~~from receiving a PPP loan; and~~
~~ clarify that prior to enactment the current “no credit elsewhere test” remains in~~
~~place for PPP loans, but that going forward the 7(a) credit elsewhere test would~~
~~apply for PPP loans greater than $350,000.~~
~~The bil would also prevent the SBA from imposing an EIDL loan cap below the program’s~~
~~statutory limit of $2 mil ion and al ow current EIDL borrowers to modify their loans to seek~~
~~additional funds up to the $2 mil ion maximum loan size. Due to high demand, the SBA currently~~
~~limits COVID-19-related EIDL at $150,000.~~
~~A summary of the (updated) Heroes Act’s major smal business-related provisions is presented in~~
~~the Appendix.~~
~~This report begins with an overview of SBA disaster loans and discusses various issues related to~~
~~providing disaster assistance to smal businesses adversely affected by COVID-19. It then~~
~~presents an overview and discussion of SBA access to capital programs (including the 7(a) loan~~
~~guarantee, 504/CDC loan guarantee, and Microloan program), SBA management and technical~~
~~training programs (SBDCs, WBCs, SCORE, and Microloan technical assistance), and SBA~~
~~contracting programs.~~
~~Congressional Research Service~~
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~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

~~Disaster Loans~~
~~Overview~~
~~SBA disaster assistance is provided in the form of loans, not grants, which must be repaid to the~~
~~federal government. The SBA’s disaster loans are unique in two respects: (1) they go directly to~~
~~the ultimate borrower, and (2) they are not limited to smal businesses.15~~
~~SBA disaster loans for physical damage are available to individuals, businesses of al sizes, and~~
~~nonprofit organizations in declared disaster areas.16 SBA disaster loans for economic injury~~
~~(EIDL) are available to eligible smal businesses, smal agricultural cooperatives, smal~~
~~businesses engaged in aquaculture, and most private, nonprofit organizations in declared disaster~~
~~areas. The SBA issues about 80% of its direct disaster loans to individuals and households~~
~~(renters and property owners) to repair and replace homes and personal property. The SBA~~
~~disbursed $401 mil ion in disaster loans in FY2016, $889 mil ion in FY2017, $3.59 bil ion in~~
~~FY2018, and $1.5 bil ion in FY2019.17~~
~~Types of Disaster Loans~~
~~The SBA Disaster Loan Program includes home disaster loans, business physical disaster loans,~~
On July 11, 2020, the SBA announced that it had stopped accepting Emergency EIDL Advance Payment grant applications because the program had reached its authorization limit of $20 bil ion in grants.10 The SBA approved 5,781,390 Emergency EIDL Advance Payment grant 8 If a borrower uses less than 60% of the PPP loan amount for payroll costs during the forgiveness covered period, the borrower will cont inue to be eligible for partial loan forgiveness, subject to at least 60% of the loan forgiveness amount having been used for payroll costs. 9 SBA and T reasury, “Business Loan Program T emporary Changes; Paycheck Protection Program – Revisions to Loan Forgiveness and Loan Review Procedures Interim Final Rules,” 85 Federal Register 38309, June 26, 2020. 10 SBA, “SBA provided $20 billion to Small Businesses and Non-Profits T hrough the Emergency Economic Injury Disaster Loan Advance Program,” press release, July 11, 2020, at https://www.sba.gov/about -sba/sba-newsroom/press-releases-media-advisories/sba-provided-20-billion-small-businesses-and-non-profits-through-economic-injury-disaster- Congressional Research Service 4 link to page 10 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options applications.11 As of November 22, 2020, the SBA had approved 3,645,556 COVID-19-related EIDL loans, totaling over $194.3 bil ion.12 As required by P.L. 116-147, the SBA stopped accepting PPP loan applications on August 8, 2020. As of August 8, 2020, the SBA had approved, after cancel ations, 5,212,128 PPP loans, totaling over $525 bil ion (see Table 1). For comparative purposes, that loan approval amount is more than the amount the SBA has approved in al of its loan programs, including disaster loans, during the last 29 years (from October 1, 1991, through December 31, 2019; $509.9 bil ion).13 Table 1. Paycheck Protection Program Loan Approvals, After Cancellations, Through August 8, 2020 Average Loan Number of Loans Amount Characteristic Approved Amount Approved Approved Lenders Approvals 5,212,128 $525,012,201,124 $100,729 5,460 (after cancel ations) Source: Smal Business Administration (SBA), “Additional Program Information: approvals as of August 8, 2020,” at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program. Note: Cancel ations include duplicative loans, loans not closed for any reason, and loans that have been paid off. As of August 8, 2020, four industry sectors had received at least 10% of PPP net loan amounts:  Health Care and Social Assistance (12.9%);  Professional, Scientific, and Technical Services (12.7%);  Construction (12.4%); and  Manufacturing (10.3%).14 House and Senate leaders continued negotiations on legislation to reopen and amend the PPP throughout the summer and fal . On December 21, 2020, the House and Senate passed H.R. 133, the Economic Aid to Hard-Hit Smal Businesses, Nonprofits, and Venues Act (Division M, Title III of the Consolidated Appropriations Act of 2021). The bil would, among other provisions,  extend the PPP loan covered period from August 8, 2020, to March 31, 2021;  expand the list of al owable uses of proceeds and loan forgiveness to include personal protective equipment, supplier costs, payments for software, cloud computing, and other human resources and accounting needs, and costs related to loan. As of April 24, 2020, the SBA had approved nearly 1.2 million Emergency EIDL grants, totaling $4.8 billion . See SBA, “COVID-19 EIDL Advance Reports, April 24, 2020,” at https://www.sba.gov/document/report-covid-19-eidl-advance-report -04-24-20. 11 SBA, “ Disaster Assistance Update EIDL Advance July 15, 2020 (figures as of July 14, 2020),” at https://www.sba.gov/sites/default/files/2020-07/EIDL%20COVID-19%20Advance%207.15.20.pdf. 12 SBA, “ Disaster Assistance Update Nationwide EIDL Loans November 23, 2020 (figures as of November 22, 2020),” at https://www.sba.gov/document/report -covid-19-eidl-loans-report-11-23-20. 13 SBA, “WDS Lending Data File,” October 18, 2019; and SBA, “Small Business Administration loan program performance: T able 2 - Gross Approval Amount by Program, December 31, 2019,” at https://www.sba.gov/document/report -small-business-administration-loan-program-performance. 14 SBA, “Paycheck Protection Program (PPP) Report: Approvals through August 8, 2020; Industry by NAICS Sector,” at https://www.sba.gov/document/report -paycheck-protection-program-report -through-august-8-2020. Congressional Research Service 5 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options property damage from public disturbances that occurred in 2020 that are not covered by insurance;  al ow borrowers to select a PPP loan forgiveness covered period of either 8 weeks after the loan’s origination date or 24 weeks after the loan’s origination date regardless of when the loan was disbursed;  create a simplified loan forgiveness application process for loans of $150,000 or less, which includes an application form that is not more than one page in length and only requires borrowers to provide a description of the number of employees the borrower was able to retain because of the loan, the estimated amount of the loan amount spent on payroll costs, and the total loan amount. The borrower must also attest that they complied with al PPP loan requirements. Borrowers must retain relevant employment records for four years following submission of the form and other relevant records for three years. The SBA retains the right to review and audit these loans for fraud. Reporting of demographic information is optional;  al ow PPP borrowers that have fewer than 300 employees, have or wil use the full amount of their PPP loan, and can document quarterly revenue losses of at least 25% in the first, second, or third quarter of 2020 relative to the same quarter of 2019 to receive a second-draw PPP loan of up to $2 mil ion;  increase the PPP loan authorization level from $659 bil ion to $806.45 bil ion, appropriate an additional $284.45 bil ion for the PPP, and rescind $146.5 bil ion from the SBA’s business loans program account (appropriated funds that were not spent prior to enactment);  extend the covered period for Emergency EIDL advance payments (grants) from December 31, 2020, to December 31, 2021, extend the time for the SBA to approve and disburse the funds from three to 21 days, and repeal the requirement that borrowers deduct the amount of their EIDL advance payment from their PPP loan forgiveness amount if the advance payment was refinanced into their PPP loan;  appropriate $20 bil ion for an EIDL Targeted advance payment (grant) program that provides a $10,000 advance payment to borrowers located in low-income communities that have suffered a revenue loss greater than 30% over specified time periods and have no more than 300 employees; applicants that meet these requirements and received an Emergency EIDL advance payment previously are eligible to receive an amount equal to the difference of what the borrower received and $10,000. The SBA is required to provide first priority in awarding the grants to eligible borrowers located in low-income communities that received an Emergency EIDL advance payment of less than $10,000 previously, and second priority to eligible first-time applicants located in low-income communities;  increase the 7(a) loan guarantee program’s authorization limit from $30 bil ion to $75 bil ion in FY2021, and appropriate $1.918 bil ion for 7(a) loan guarantee program subsidy costs, and costs related to (1) increasing the 7(a) program’s loan guarantee percentage from 75% and 85%, depending on the loan amount, to 90% for al 7(a) loans; (2) increasing the SBAExpress loan amount from $350,000 to $1 mil ion on January 1, 2021 (reverts permanently to $500,000 on October 1, 2021); (3) increasing the SBAExpress loan guarantee percentage from 50% to 75% for loans of $350,000 or less (reverts permanently to 50% for al Congressional Research Service 6 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options SBAExpress loans on October 1, 2021); (4) waiving 7(a) and 504/CDC lender and borrower fees in FY2021; and (5) providing lower interest rates for the 504/CDC refinancing program;  appropriate $3.5 bil ion to resume the payment of principal and interest on SBA 7(a) loans, 504/CDC loans, and Microloans approved between February 1, 2020, and September 30, 2021, capped at $9,000 per borrower per month, and provide borrowers with qualifying loans approved by the SBA prior to the CARES Act an additional three months of payments, starting in February 2021, capped at $9,000 per borrower per month. After the three months, underserved borrowers (e.g., borrowers with SBA microloans or 7(a) Community Advantage loans or located in hard-hit sectors, such as food service and accommodation) wil receive an additional five months of payments, also capped at $9,000 per borrower per month;  appropriate $15 bil ion for grants to eligible live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, or talent representatives who demonstrate a 25% reduction in revenue over specified time periods. The SBA can award an initial grant to eligible individuals or entities of up to $10 mil ion based on a specified formula and a supplemental grant equal to half of the initial grant, also based on a specified formula. Funding must be used for specified purposes, such as payroll, rent, utilities, and personal protective equipment; and  appropriate $57 mil ion for Microloan program enhancements, including $50 mil ion for Microloan technical assistance grants and $7 mil ion in loan credit subsidies to support up to $64 mil ion in additional Microloan lending. Disaster Loans Overview SBA disaster assistance is provided in the form of loans, not grants, which must be repaid to the federal government. The SBA’s disaster loans are unique in two respects: (1) they go directly to the ultimate borrower, and (2) they are not limited to smal businesses.15 SBA disaster loans for physical damage are available to individuals, businesses of al sizes, and nonprofit organizations in declared disaster areas.16 SBA disaster loans for economic injury (EIDL) are available to eligible smal businesses, smal agricultural cooperatives, smal businesses engaged in aquaculture, and most private, nonprofit organizations in declared disaster areas. The SBA issues about 80% of its direct disaster loans to individuals and households (renters and property owners) to repair and replace homes and personal property. The SBA disbursed $401 mil ion in disaster loans in FY2016, $889 mil ion in FY2017, $3.59 bil ion in FY2018, and $1.5 bil ion in FY2019.17 15 13 C.F.R. §123.200. 16 13 C.F.R. §123.105 and 13 C.F.R. §123.203. 17 SBA, Office of Legislative and Congressional Affairs, “WDS Report Amount Fiscal Year 2019, T able 1.4 Disbursements by Program,” October 18, 2019. Congressional Research Service 7 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options Types of Disaster Loans The SBA Disaster Loan Program includes home disaster loans, business physical disaster loans, and EIDLs.18 This report focuses on the EIDL program because it is currently being used to and EIDLs.18 This report focuses on the EIDL program because it is currently being used to
address the adverse economic impact of COVID-19 on smal businesses and other EIDL-eligible address the adverse economic impact of COVID-19 on smal businesses and other EIDL-eligible
organizations. organizations.
P.L. 116-123, the Coronavirus Preparedness and Response Supplemental Appropriations Act, P.L. 116-123, the Coronavirus Preparedness and Response Supplemental Appropriations Act,
2020, deemed the coronavirus to be a disaster under the EIDL program. This change made 2020, deemed the coronavirus to be a disaster under the EIDL program. This change made
economic injury from the coronavirus an eligible EIDL expense. The act also provided the SBA economic injury from the coronavirus an eligible EIDL expense. The act also provided the SBA
an additional $20 mil ion for disaster loan administrative expenses. an additional $20 mil ion for disaster loan administrative expenses.
For a discussion of al SBA disaster loans, see CRS Report R41309, For a discussion of al SBA disaster loans, see CRS Report R41309, The SBA Disaster Loan
Program: Overview and Possible Issues for Congress, by Bruce R. Lindsay. , by Bruce R. Lindsay.
Economic Injury Disaster Loans
EIDLs provide up to $2 mil ion for working capital (including fixed debts, payroll, accounts EIDLs provide up to $2 mil ion for working capital (including fixed debts, payroll, accounts
payable and other bil s that cannot be paid because of the disaster’s impact) to help smal payable and other bil s that cannot be paid because of the disaster’s impact) to help smal
businesses, smal agricultural cooperatives, smal businesses engaged in aquaculture, and most businesses, smal agricultural cooperatives, smal businesses engaged in aquaculture, and most
private, nonprofit organizations meet their financial obligations and operating expenses that private, nonprofit organizations meet their financial obligations and operating expenses that
cannot be met as a direct result of the disaster.19 cannot be met as a direct result of the disaster.19

~~15 13 C.F.R. §123.200.~~
~~16 13 C.F.R. §123.105 and 13 C.F.R. §123.203.~~
~~17 SBA, Office of Legislative and Congressional Affairs, “WDS Report Amount Fiscal Year 2019, T able 1.4~~
~~Disbursements by Program,” October 18, 2019.~~
~~18 T he SBA also offers military reservist economic injury disaster loans. T hese loans are available when economic~~
~~injury is incurred as a direct result of a business owner or an essential employee being called to active duty. T hese loans~~
~~are generally not associated with disasters. See CRS Report R42695,~~ ~~SBA Veterans Assistance Program s: An Analysis~~
~~of Contem porary Issues, by Robert Jay Dilger and Sean Lowry.~~
~~19 SBA, “Fact Sheet – Economic Injury Disaster Loans, California Declaration #16332,” March 19, 2020, at~~
~~https://disasterloan.sba.gov/ela/Declarations/DeclarationDetails?declNumber=3485&direct=false (hereinafter cited as~~
~~SBA, “Fact Sheet”).~~
~~Congressional Research Service~~
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~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

~~Public nonprofit organizations and several specific business types are not eligible for EIDL~~
~~assistance. Ineligible businesses include, but are not limited to, the following:~~
~~ businesses that do not meet the SBA’s smal business eligibility criteria,~~
~~including the SBA’s size standards;~~
~~ businesses that derive more than one-third of their annual gross revenue from~~
~~legal gambling activities;~~
~~ casinos and racetracks;~~
~~ religious organizations;~~
~~ political and lobbying concerns;~~
~~ government-owned concerns (expect for businesses owned or controlled by a~~
~~Native American tribe); and~~
~~ businesses determined by the SBA to have credit available elsewhere.20~~
~~EIDL loan amounts are based on actual economic injury and financial needs, regardless of~~
~~whether the business or eligible nonprofit suffered any property damage. If an applicant is a~~
~~major source of employment, the SBA may waive the $2 mil ion statutory limit.21 In addition,~~
Public nonprofit organizations and several specific business types are not eligible for EIDL assistance. Ineligible businesses include, but are not limited to, the following:  businesses that do not meet the SBA’s smal business eligibility criteria, including the SBA’s size standards;  businesses that derive more than one-third of their annual gross revenue from legal gambling activities;  casinos and racetracks;  religious organizations;  political and lobbying concerns;  government-owned concerns (expect for businesses owned or controlled by a Native American tribe); and  businesses determined by the SBA to have credit available elsewhere.20 EIDL loan amounts are based on actual economic injury and financial needs, regardless of whether the business or eligible nonprofit suffered any property damage. If an applicant is a major source of employment, the SBA may waive the $2 mil ion statutory limit.21 In addition, 18 T he SBA also offers military reservist economic injury disaster loans. T hese loans are available when economic injury is incurred as a direct result of a business owner or an essential employee being called to active duty. T hese loans are generally not associated with disasters. See CRS Report R42695, SBA Veterans Assistance Program s: An Analysis of Contem porary Issues, by Robert Jay Dilger and Sean Lowry. 19 SBA, “Fact Sheet – Economic Injury Disaster Loans, California Declaration #16332,” March 19, 2020, at https://disasterloan.sba.gov/ela/Declarations/DeclarationDetails?declNumber=3485&direct=false (hereinafter cited as SBA, “Fact Sheet”). 20 SBA, “Disaster Assistance Program, SOP 50 30 9, pp. 70, 71, at https://www.sba.gov/document/sop-50-30-9-disaster-assistance-program-posted-05-31 (hereinafter cited as SBA, “ Disaster Assistance Program SOP”). 21 SBA, “Fact Sheet.” Congressional Research Service 8 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options EIDL loan proceeds cannot be used to refinance long-term debt, expand facilities, pay dividends EIDL loan proceeds cannot be used to refinance long-term debt, expand facilities, pay dividends
or bonuses, or for relocation.22 or bonuses, or for relocation.22
Applicants must have a credit history acceptable to the SBA, the ability to repay the loan, and Applicants must have a credit history acceptable to the SBA, the ability to repay the loan, and
present collateral for al EIDL loans over $25,000 if available. The SBA collateralizes real estate present collateral for al EIDL loans over $25,000 if available. The SBA collateralizes real estate
or other assets when available, but it wil not deny a loan for lack of collateral.23 or other assets when available, but it wil not deny a loan for lack of collateral.23
EIDL interest rates are determined by formulas established in law (discussed later) and are fixed EIDL interest rates are determined by formulas established in law (discussed later) and are fixed
for the life of the loan. EIDL interest rate ceilings are statutorily set at no more than 4% per for the life of the loan. EIDL interest rate ceilings are statutorily set at no more than 4% per
annum. EIDL applicants are not eligible if the SBA determines that the applicant has credit annum. EIDL applicants are not eligible if the SBA determines that the applicant has credit
available elsewhere. available elsewhere.
EIDL loans can have maturities up to 30 years. The SBA determines an appropriate instal ment EIDL loans can have maturities up to 30 years. The SBA determines an appropriate instal ment
payment based on each borrower’s financial condition, which, in turn, determines the loan term.24 payment based on each borrower’s financial condition, which, in turn, determines the loan term.24
There are no prepayment penalties. There are no prepayment penalties.
SBA EIDL assistance is not automatical y available. It must be requested in one of two ways: (1) SBA EIDL assistance is not automatical y available. It must be requested in one of two ways: (1)
a state or territory governor can submit a request to the President for a major disaster declaration a state or territory governor can submit a request to the President for a major disaster declaration
under the Robert T. Stafford Disaster Relief and Emergency Assistance Act25 or (2) a state or under the Robert T. Stafford Disaster Relief and Emergency Assistance Act25 or (2) a state or
governor can submit a request for SBA EIDL from the SBA Administrator under the Smal governor can submit a request for SBA EIDL from the SBA Administrator under the Smal
Business Act. Business Act.
There was some initial concern that COVID-19 would not be a declarable disaster under the There was some initial concern that COVID-19 would not be a declarable disaster under the
Smal Business Act because it did not meet the legal definition for a disaster. As mentioned, to Smal Business Act because it did not meet the legal definition for a disaster. As mentioned, to
prevent any potential ambiguity, Title II of P.L. 116-123 deemed the coronavirus a disaster under prevent any potential ambiguity, Title II of P.L. 116-123 deemed the coronavirus a disaster under

~~20 SBA, “Disaster Assistance Program, SOP 50 30 9, pp. 70, 71, at https://www.sba.gov/document/sop-50-30-9-~~
~~disaster-assistance-program-posted-05-31 (hereinafter cited as SBA, “ Disaster Assistance Program SOP”).~~
~~21 SBA, “Fact Sheet.”~~
~~22 For the full list of ineligible uses of EIDL loan proceeds, see SBA, “Disaster Assistance Program SOP ,” pp. 75-76.~~
~~23 SBA, “Fact Sheet.”~~
~~24 SBA, “Fact Sheet.”~~
~~25 P.L. 93-288, as amended. T ribal nations are also authorized to request and receive major disaster assistance.~~
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~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

Section 7(b)(2)(D) of the Smal Business Act, making economic injury from the coronavirus an Section 7(b)(2)(D) of the Smal Business Act, making economic injury from the coronavirus an
eligible expense under the SBA’s Economic Injury Disaster Loan program. eligible expense under the SBA’s Economic Injury Disaster Loan program.
Initial EIDL Response to COVID-19
On March 16, 2020, the SBA Administrator began issuing declarations for SBA EIDLs in On March 16, 2020, the SBA Administrator began issuing declarations for SBA EIDLs in
response to states seeking SBA disaster assistance for smal businesses.26 The SBA changed its response to states seeking SBA disaster assistance for smal businesses.26 The SBA changed its
requirement that a state or territory “provide documentation certifying that at least five smal requirement that a state or territory “provide documentation certifying that at least five smal
businesses have suffered substantial economic injury as a result of the disaster, with at least one businesses have suffered substantial economic injury as a result of the disaster, with at least one
business located in each declared county/parish.”27 Under new criteria, states and territories now business located in each declared county/parish.”27 Under new criteria, states and territories now
“are only required to certify that at least five smal businesses within the state/territory have “are only required to certify that at least five smal businesses within the state/territory have
suffered substantial economic injury, regardless of where the businesses are located.”28 The SBA suffered substantial economic injury, regardless of where the businesses are located.”28 The SBA
22 For the full list of ineligible uses of EIDL loan proceeds, see SBA, “Disaster Assistance Program SOP ,” pp. 75-76. 23 SBA, “Fact Sheet.” 24 SBA, “Fact Sheet.” 25 P.L. 93-288, as amended. T ribal nations are also authorized to request and receive major disaster assistance. 26 A similar definitional issue may exist under the Stafford Act which does not specify an infectious disease as an incident in its definition of a major disaster. T here are, however, indications that the President considers COVID -19 a major disaster. See the White House, Letter from President Donald J. Trum p on Em ergency Determ ination Under the Stafford Act, March 13, 2020, at https://www.whitehouse.gov/briefings-statements/letter-president -donald-j-trump-emergency-determination-stafford-act/. 27 SBA, SBA Updates Criteria on States for Requesting Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19), March 17, 2020, at https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-updates-criteria-states-requesting-disaster-assistance-loans-small-businesses-impacted (hereinafter cited as SBA, SBA Updates Criteria on States for Requesting Disaster Assistance). 28 SBA, SBA Updates Criteria on States for Requesting Disaster Assistance. Congressional Research Service 9 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options announced that under the new criteria EIDL assistance may be available statewide instead of just announced that under the new criteria EIDL assistance may be available statewide instead of just
within specific identified counties in declarations related to COVID-19. within specific identified counties in declarations related to COVID-19.
EIDL Funding
Prior to the CARES Act’s enactment, the SBA had about $1.1 bil ion in disaster loan credit Prior to the CARES Act’s enactment, the SBA had about $1.1 bil ion in disaster loan credit
subsidy available to support about $7 bil ion to $8 bil ion in disaster loans. Loan credit subsidy is subsidy available to support about $7 bil ion to $8 bil ion in disaster loans. Loan credit subsidy is
the amount provided to cover the government’s cost of extending or guaranteeing credit.29 The the amount provided to cover the government’s cost of extending or guaranteeing credit.29 The
loan credit subsidy amount is about one-seventh of the cost of each disaster loan.30 The credit loan credit subsidy amount is about one-seventh of the cost of each disaster loan.30 The credit
subsidy amount is used to protect the government against the risk of estimated shortfal s in loan subsidy amount is used to protect the government against the risk of estimated shortfal s in loan
repayments. There was some concern that the SBA’s funding for disaster loan credit subsidies repayments. There was some concern that the SBA’s funding for disaster loan credit subsidies
would have proven to be insufficient to meet the demand for disaster loans now that EIDL would have proven to be insufficient to meet the demand for disaster loans now that EIDL
eligibility has been extended to economic injuries related to COVID-19. eligibility has been extended to economic injuries related to COVID-19.
The CARES Act addressed this issue by providing an additional The CARES Act addressed this issue by providing an additional $562 mil ion to support disaster $562 mil ion to support disaster
loans and $10 bil ion to support the Emergency EIDL grant program. As mentioned, the Paycheck loans and $10 bil ion to support the Emergency EIDL grant program. As mentioned, the Paycheck
Protection Program and Health Care Enhancement Act (P.L. 116-139) appropriated an additional Protection Program and Health Care Enhancement Act (P.L. 116-139) appropriated an additional
~~$50 bil ion for EIDL and $10 bil ion for Emergency EIDL grants.~~

~~26 A similar definitional issue may exist under the Stafford Act which does not specify an infectious disease as an~~
~~incident in its definition of a major disaster. T here are, however, indications that the President considers COVID -19 a~~
~~major disaster. See the White House,~~ ~~Letter from President Donald J. Trum p on Em ergency Determ ination Under the~~
~~Stafford Act, March 13, 2020, at https://www.whitehouse.gov/briefings-statements/letter-president -donald-j-trump-~~
~~emergency-determination-stafford-act/.~~
~~27 SBA,~~ ~~SBA Updates Criteria on States for Requesting Disaster Assistance Loans for Small Businesses Impacted by~~
~~Coronavirus (COVID-19), March 17, 2020, at https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-~~
~~advisories/sba-updates-criteria-states-requesting-disaster-assistance-loans-small-businesses-impacted (hereinafter cited~~
~~as SBA, SBA Updates Criteria on States for Requesting Disaster Assistance).~~
~~28 SBA, SBA Updates Criteria on States for Requesting Disaster Assistance.~~
$50 bil ion for EIDL and $10 bil ion for Emergency EIDL grants. Also, as mentioned, if enacted, H.R. 133, the Economic Aid to Hard-Hit Smal Businesses, Nonprofits, and Venues Act (Division M, Title III of the Consolidated Appropriations Act of 2021), would appropriate an additional $20 bil ion for the EIDL Targeted advance payment (grant) program. Surge Issues and Loan Processing Times Historical y, the majority (80%) of SBA disaster loans have been for individuals and households. The significant number of businesses that wil likely apply for EIDL assistance because of the economic damage the coronavirus caused may require the SBA to enhance its disaster business loan portfolio and increase staff to meet demand. As mentioned, in anticipation of increased EIDL demand, Title II of P.L. 116-123 provided the SBA with an additional $20 mil ion, to remain available until expended, for SBA Disaster Loan Program administrative expenses. A Government Accountability Office (GAO) report found that the SBA provided disaster loans in roughly 18 days or less in response to Hurricanes Harvey, Irma, and Maria in 2017.31 Although the 2017 hurricanes created a high demand at that time for SBA disaster loans, it is unclear if GAO’s findings can be extrapolated to the current COVID-19 pandemic. The sheer volume of EIDL applications in response to COVID-19 could be significantly higher because COVID-19 affects a much larger number of smal businesses and organizations. In addition, the time needed 29 “T he Federal Credit Reform Act of 1990 (FCRA) requires agencies to estimate the cost to the government of 29 “T he Federal Credit Reform Act of 1990 (FCRA) requires agencies to estimate the cost to the government of
extending or guaranteeing credit. T his cost, referred to as subsidy cost, equals the net present value of estimated cash extending or guaranteeing credit. T his cost, referred to as subsidy cost, equals the net present value of estimated cash
flows from the government (e.g., loan disbursements and claim payments to lenders) minus estimated cash flows to the flows from the government (e.g., loan disbursements and claim payments to lenders) minus estimated cash flows to the
government (e.g., loan repayments, interest payments, fees, and recoveries on defaulted loans) over the life of the loan, government (e.g., loan repayments, interest payments, fees, and recoveries on defaulted loans) over the life of the loan,
excluding administrative costs.” See U.S. Government Accountability Office, excluding administrative costs.” See U.S. Government Accountability Office, Current Method to Estim ate Credit
Subsidy Costs Is More Appropriate for Budget Estim ates Than a Fair Value Approach , GAO-16-41, January 29, 2016, , GAO-16-41, January 29, 2016,
p. i, at https://www.gao.gov/products/GAO-16-41. p. i, at https://www.gao.gov/products/GAO-16-41.
30 SBA, 30 SBA, FY2021 Congressional Budget Justification FY2019 Annual Performance Report,” p. 13, at ,” p. 13, at
https://www.sba.gov/document/report —congressional-budget-justification-annual-performance-report (hereinafter https://www.sba.gov/document/report —congressional-budget-justification-annual-performance-report (hereinafter
cited as SBA, cited as SBA, FY2021 Congressional Budget Justification FY2019 Annual Perform ance Report ”). ”).
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~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

~~Surge Issues and Loan Processing Times~~
~~Historical y, the majority (80%) of SBA disaster loans have been for individuals and households.~~
~~The significant number of businesses that wil likely apply for EIDL assistance because of the~~
~~economic damage the coronavirus caused may require the SBA to enhance its disaster business~~
~~loan portfolio and increase staff to meet demand. As mentioned, in anticipation of increased EIDL~~
~~demand, Title II of P.L. 116-123 provided the SBA with an additional $20 mil ion, to remain~~
~~available until expended, for SBA Disaster Loan Program administrative expenses.~~
~~A Government Accountability Office (GAO) report found that the SBA provided disaster loans in~~
~~roughly 18 days or less in response to Hurricanes Harvey, Irma, and Maria in 2017.31 Although~~
~~the 2017 hurricanes created a high demand at that time for SBA disaster loans, it is unclear if~~
~~GAO’s findings can be extrapolated to the current COVID-19 pandemic. The sheer volume of~~
~~EIDL applications in response to COVID-19 could be significantly higher because COVID-19~~
~~affects a much larger number of smal businesses and organizations. In addition, the time needed~~
31 U.S. Government Accountability Office, Disaster Loan Processing Was Timelier, but Planning Improvements and Pilot Program Evaluation Needed, GAO-20-369, March 9, 2020, at https://www.gao.gov/products/GAO-20-168. Congressional Research Service 10 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options for the SBA to expand the disaster loan portfolio and hire and train new and existing staff could for the SBA to expand the disaster loan portfolio and hire and train new and existing staff could
compromise loan processing times. compromise loan processing times.
Loan processing times may be of significant concern to Congress and business owners alike. If Loan processing times may be of significant concern to Congress and business owners alike. If
loans are not processed quickly enough, businesses nationwide may suffer economic damage and, loans are not processed quickly enough, businesses nationwide may suffer economic damage and,
potential y, collapse. Consequently, Congress may examine options that could expedite loan potential y, collapse. Consequently, Congress may examine options that could expedite loan
processing, such as increased staffing and surge capabilities, waiving application requirements, processing, such as increased staffing and surge capabilities, waiving application requirements,
and the use of expedited loans or bridge loans. and the use of expedited loans or bridge loans.
Expedited Disaster Loans and Bridge Loans
In response to criticism of SBA’s disaster loan processing following the Gulf Coast hurricanes of In response to criticism of SBA’s disaster loan processing following the Gulf Coast hurricanes of
2005 and 2008, Congress passed P.L. 110-234, the Smal Business Disaster Response and Loan 2005 and 2008, Congress passed P.L. 110-234, the Smal Business Disaster Response and Loan
Improvements Act of 2008.32 The act created several programs to improve the disaster loan Improvements Act of 2008.32 The act created several programs to improve the disaster loan
processing.33 Among them were the following: processing.33 Among them were the following:
 Expedited Disaster Assistance Loan Program (EDALP) to provide eligible EIDL  Expedited Disaster Assistance Loan Program (EDALP) to provide eligible EIDL
applicants with expedited access to short-term guaranteed loans of up to applicants with expedited access to short-term guaranteed loans of up to
$150,000.34 $150,000.34
 Immediate Disaster Assistance Program (IDAP) to provide eligible EIDL  Immediate Disaster Assistance Program (IDAP) to provide eligible EIDL
applicants with guaranteed bridge loans of up to $25,000 from private-sector applicants with guaranteed bridge loans of up to $25,000 from private-sector
lenders, with an SBA decision within 36 hours of a lender’s application on behalf lenders, with an SBA decision within 36 hours of a lender’s application on behalf
of a borrower.35 of a borrower.35
 Private Disaster Assistance Program (PDAP) to make guaranteed loans available  Private Disaster Assistance Program (PDAP) to make guaranteed loans available
to homeowners and eligible EIDL applicants in an amount up to $2 mil ion.36 to homeowners and eligible EIDL applicants in an amount up to $2 mil ion.36

~~31 U.S. Government Accountability Office,~~ ~~Disaster Loan Processing Was Timelier, but Planning Improvements and~~
~~Pilot Program Evaluation Needed, GAO-20-369, March 9, 2020, at https://www.gao.gov/products/GAO-20-168.~~
The SBA, however, had difficulty implementing these programs. In his statement before the House Committee on Smal Business, then-acting (and now the current) SBA Inspector General, Hannibal “Mike” Ware, stated the following: In the wake of disasters like Hurricane Sandy, congressional representatives expressed concern that SBA did not effectively develop and utilize programmatic innovations intended to assist in disbursing funds quickly and effectively. For instance, SBA did not implement statutory provisions of the Immediate Disaster Assistance Program (IDAP), Economic Injury Disaster Assistance Program (EDAP), and the Private Disaster Assistance Programs (PDAP), collectively known as the “Guaranteed Disaster Assistance Programs” mandated by Congress in 2008. These provisions were enacted with the expectation that they would allow SBA to provide expedited disaster loans in partnership with private sector lenders. These provisions remain unimplemented.37 32 P.L. 110-234, the Small Business Disaster Response and Loan Improvements Act of 2008 (T itle XII, subtitle B of the 32 P.L. 110-234, the Small Business Disaster Response and Loan Improvements Act of 2008 (T itle XII, subtitle B of the
Food, Conservation, and Energy Act of 2008 ), as amended by P.L. 110-246, the Food, Conservation, and Energy Act of Food, Conservation, and Energy Act of 2008 ), as amended by P.L. 110-246, the Food, Conservation, and Energy Act of
2008 (T itle XII, subtitle B of the Food, Conservation, and Energy Act of 2008) (hereinafter cited as P.L. 110-234). 2008 (T itle XII, subtitle B of the Food, Conservation, and Energy Act of 2008) (hereinafter cited as P.L. 110-234).
33 SBA, “Immediate, Expedited, and Private Disaster Assistance Loan Programs,” 80 33 SBA, “Immediate, Expedited, and Private Disaster Assistance Loan Programs,” 80 Federal Register 63715-63717, 63715-63717,
October 21, 2015. October 21, 2015.
~~34 P.L. 110-234, Sec. 12085.~~
~~35 P.L. 110-234, Sec. 12084.~~
~~36 P.L. 110-234, Sec. 12083.~~
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~~The SBA, however, had difficulty implementing these programs. In his statement before the~~
~~House Committee on Smal Business, then-acting (and now the current) SBA Inspector General,~~
~~Hannibal “Mike” Ware, stated the following:~~
~~In the wake of disasters like Hurricane Sandy, congressional representatives expressed~~
~~concern that SBA did not effectively develop and utilize programmatic innovations~~
~~intended to assist in disbursing funds quickly and effectively. For instance, SBA did not~~
~~implement statutory provisions of the Immediate Disaster Assistance Program (IDAP),~~
~~Economic Injury Disaster Assistance Program (EDAP), and the Private Disaster Assistance~~
~~Programs (PDAP), collectively known as the “Guaranteed Disaster Assistance Programs”~~
~~mandated by Congress in 2008. These provisions were enacted with the expectation that~~
~~they would allow SBA to provide expedited disaster loans in partnership with private sector~~
~~lenders. These provisions remain unimplemented.37~~34 P.L. 110-234, Sec. 12085. 35 P.L. 110-234, Sec. 12084. 36 P.L. 110-234, Sec. 12083. 37 T estimony of Hannibal “Mike” Ware, Acting Inspector General, United States Small Business Administration, U.S. Congress, House Committee on Small Business, Storm Watch: Making Sure SBA’s Disaster Loan Program Is Prepared, 115th Cong., 1st sess., April 26, 2017, p. 33. Congressional Research Service 11 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options
He added that the SBA had difficulty implementing the programs because private lenders He added that the SBA had difficulty implementing the programs because private lenders ~~were~~w ere
reluctant to participate in the program. He mentioned the following impediments: reluctant to participate in the program. He mentioned the following impediments:
[the] cost of program participation under the current pricing structure and the lender’s lack [the] cost of program participation under the current pricing structure and the lender’s lack
of infrastructure to deliver loans that meet SBA standards (such as evaluating eligibility of infrastructure to deliver loans that meet SBA standards (such as evaluating eligibility
and duplication of benefits); loan terms that include longer maturities than conventional and duplication of benefits); loan terms that include longer maturities than conventional
lending practices; the high cost of providing these loans; inadequate collateral security; and lending practices; the high cost of providing these loans; inadequate collateral security; and
their lack of expertise in the home loan sector. Lenders were also concerned that loan their lack of expertise in the home loan sector. Lenders were also concerned that loan
guarantees would be denied due to improper eligibility determinations. guarantees would be denied due to improper eligibility determinations.
Because these programs had limited use, Congress included a provision in P.L. 115-141, the Because these programs had limited use, Congress included a provision in P.L. 115-141, the
Consolidated Appropriations Act, 2018, which permanently cancel ed $2.6 mil ion in unobligated Consolidated Appropriations Act, 2018, which permanently cancel ed $2.6 mil ion in unobligated
balances available for the IDAP and the EDALP. balances available for the IDAP and the EDALP.
The CARES Act addressed loan processing issues by authorizing the SBA Administrator, in The CARES Act addressed loan processing issues by authorizing the SBA Administrator, in
response to economic injuries caused by COVID-19, to response to economic injuries caused by COVID-19, to
 waive the “credit not available elsewhere” requirement,  waive the “credit not available elsewhere” requirement,
 approve an applicant based solely on their credit score,  approve an applicant based solely on their credit score,
 not require applicants to submit a tax return or tax return transcript for approval,  not require applicants to submit a tax return or tax return transcript for approval,
 waive any rules related to the personal guarantee on advances and loans of not  waive any rules related to the personal guarantee on advances and loans of not
more than $200,000, and more than $200,000, and
 waive the requirement that the applicant needs to be in business for the one-year  waive the requirement that the applicant needs to be in business for the one-year
period before the disaster declaration (except that no waiver may be made for a period before the disaster declaration (except that no waiver may be made for a
business that was not in operation on January 31, 2020). business that was not in operation on January 31, 2020).
SBA EIDL Repayment and Forgiveness
Under present law and regulations, the first SBA EIDL payment is normal y due five months after Under present law and regulations, the first SBA EIDL payment is normal y due five months after
disbursement. However, on March 23, 2020, the SBA announced that it would defer payments on disbursement. However, on March 23, 2020, the SBA announced that it would defer payments on
existing disaster loans through December 31, 2020, “to help borrowers during this unprecedented existing disaster loans through December 31, 2020, “to help borrowers during this unprecedented
time.”38 The SBA also announced that payments on new EIDL loans would be deferred for one time.”38 The SBA also announced that payments on new EIDL loans would be deferred for one
year (interest does accrue). year (interest does accrue).

~~37 T estimony of Hannibal “Mike” Ware, Acting Inspector General, United States Small Business Administration, U.S.~~
~~Congress, House Committee on Small Business,~~ ~~Storm Watch: Making Sure SBA’s Disaster Loan Program Is~~
~~Prepared, 115th Cong., 1st sess., April 26, 2017, p. 33.~~
~~38 SBA, “ Carranza Implements Automatic Deferment on Existing SBA Disaster Loans T hrough End of 2020 ,” March~~
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~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

The CARES Act provides “impacted borrowers” adversely affected by COVID-19 complete The CARES Act provides “impacted borrowers” adversely affected by COVID-19 complete
payment deferment relief on a covered loan in its Paycheck Protection Program (PPP). The payment deferment relief on a covered loan in its Paycheck Protection Program (PPP). The
deferment may be for not less than six months and not more than one year if the borrower was in deferment may be for not less than six months and not more than one year if the borrower was in
operation on February 15, 2020, and has an application for a covered loan approved or pending operation on February 15, 2020, and has an application for a covered loan approved or pending
approval on or after the date of enactment. The SBA announced that PPP loan payments wil be approval on or after the date of enactment. The SBA announced that PPP loan payments wil be
deferred for six months. However, interest wil continue to accrue on these loans during the six-deferred for six months. However, interest wil continue to accrue on these loans during the six-
month deferment.39 month deferment.39
The CARES Act also provides for PPP loan forgiveness under specified conditions related to the The CARES Act also provides for PPP loan forgiveness under specified conditions related to the
borrower’s retention of employees. Loan forgiveness is rare, but has been used in the past to help borrower’s retention of employees. Loan forgiveness is rare, but has been used in the past to help
businesses that were having difficulty repaying their loans. For example, loan forgiveness was businesses that were having difficulty repaying their loans. For example, loan forgiveness was
granted after Hurricane Betsy, when President Lyndon B. Johnson signed the Southeast Hurricane granted after Hurricane Betsy, when President Lyndon B. Johnson signed the Southeast Hurricane
38 SBA, “ Carranza Implements Automatic Deferment on Existing SBA Disaster Loans T hrough End of 2020 ,” March 23, 2020, at https://www.sba.gov/about -sba/sba-newsroom/press-releases-media-advisories/carranza-implements-automatic-deferment -existing-sba-disaster-loans-through-end-2020. 39 SBA, “Business Loan Program T emporary Changes; Paycheck Protection Program,” 85 Federal Register 20813, April 15, 2020. Congressional Research Service 12 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options Disaster Relief Act of 1965.40 Section 3 of the act authorized the SBA Administrator to grant Disaster Relief Act of 1965.40 Section 3 of the act authorized the SBA Administrator to grant
disaster loan forgiveness or issue waivers for property lost or damaged in Florida, Louisiana, and disaster loan forgiveness or issue waivers for property lost or damaged in Florida, Louisiana, and
Mississippi as a result of the hurricane. The act stated that Mississippi as a result of the hurricane. The act stated that
to the extent such loss or damage is not compensated for by insurance or otherwise, (1) to the extent such loss or damage is not compensated for by insurance or otherwise, (1)
shall at the borrower’s option on that part of any loan in excess of $500, (A) cancel up to shall at the borrower’s option on that part of any loan in excess of $500, (A) cancel up to
$1,800 of the loan, or (B) waive interest due on the loan in a total amount of not more than $1,800 of the loan, or (B) waive interest due on the loan in a total amount of not more than
$1,800 over a period not to exceed three years; and (2) may lend to a privately owned $1,800 over a period not to exceed three years; and (2) may lend to a privately owned
school, college, or university without regard to whether the required financial assistance is school, college, or university without regard to whether the required financial assistance is
otherwise available from private sources, and may waive interest payments and defer otherwise available from private sources, and may waive interest payments and defer
principal payments on such a loan for the first three years of the term of the loan.41 principal payments on such a loan for the first three years of the term of the loan.41
Disaster Grants
Historical y, businesses that suffer uninsured loss as a result of a major disaster declaration are Historical y, businesses that suffer uninsured loss as a result of a major disaster declaration are
not eligible for Federal Emergency Management Agency (FEMA) grant assistance, and grant not eligible for Federal Emergency Management Agency (FEMA) grant assistance, and grant
assistance from other federal sources is limited. On some occasions, Congress has provided assistance from other federal sources is limited. On some occasions, Congress has provided
disaster assistance to businesses through the Department of Housing and Urban Development’s disaster assistance to businesses through the Department of Housing and Urban Development’s
(HUD’s) Community Development Block Grant (CDBG) program. The CDBG program provides (HUD’s) Community Development Block Grant (CDBG) program. The CDBG program provides
loans and grants to eligible businesses to help them recover from disasters as wel as grants loans and grants to eligible businesses to help them recover from disasters as wel as grants
intended to attract new businesses to the disaster-stricken area. In a few cases, CDBG has also intended to attract new businesses to the disaster-stricken area. In a few cases, CDBG has also
been used to compensate businesses and workers for lost wages or revenues. been used to compensate businesses and workers for lost wages or revenues.
Although the President issued the first major disaster declaration to New York for COVID-19,42 Although the President issued the first major disaster declaration to New York for COVID-19,42
CDBG disaster assistance is not available for al major disasters. States can use CDBG funding to CDBG disaster assistance is not available for al major disasters. States can use CDBG funding to
respond to emergencies or other “urgent needs” through the conventional CDBG entitlement and respond to emergencies or other “urgent needs” through the conventional CDBG entitlement and
states program,43 but existing (or future) CDBG monies general y must be reprogrammed in states program,43 but existing (or future) CDBG monies general y must be reprogrammed in

~~23, 2020, at https://www.sba.gov/about -sba/sba-newsroom/press-releases-media-advisories/carranza-implements-~~
~~automatic-deferment -existing-sba-disaster-loans-through-end-2020.~~
~~39 SBA, “Business Loan Program T emporary Changes; Paycheck Protection Program,” 85 Federal Register 20813,~~
~~April 15, 2020.~~
consultation with HUD to respond to the emergency.44 For these reasons, CDBG is general y used for long-term recovery needs rather than providing immediate, direct disaster assistance. Thus, Congress could consider providing business grants through FEMA or the SBA. Enlisting FEMA to administer the program may offer several benefits. First, FEMA already has grant processing operations in place. It might be relatively easier to expand the operations to include smal businesses disaster grants rather than establishing new grant-making operations within SBA. Second, having FEMA administer the smal business disaster grant program may limit duplication of administrative functions between FEMA and SBA. Third, it would provide access to FEMA’s Disaster Relief Fund (DRF) which, as of July 31, 2020, had roughly $74 bil ion for disaster assistance activities.45 40 P.L. 89-339, 79 Stat. 1301. 40 P.L. 89-339, 79 Stat. 1301.
41 P.L. 89-339, 79 Stat. 1301. 41 P.L. 89-339, 79 Stat. 1301.
42 Federal Emergency Management Agency, 42 Federal Emergency Management Agency, New York Covid-19 Pandemic (DR-4480), March 3, 2020, at, March 3, 2020, at
https://www.fema.gov/disaster/4480. https://www.fema.gov/disaster/4480.
43 For example, the City of Seattle is currently administering $10,000 grants to small businesses using CDBG funds to 43 For example, the City of Seattle is currently administering $10,000 grants to small businesses using CDBG funds to
respond to COVID-19. respond to COVID-19.
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~~consultation with HUD to respond to the emergency.44 For these reasons, CDBG is general y used~~
~~for long-term recovery needs rather than providing immediate, direct disaster assistance.~~
~~Thus, Congress could consider providing business grants through FEMA or the SBA. Enlisting~~
~~FEMA to administer the program may offer several benefits. First, FEMA already has grant~~
~~processing operations in place. It might be relatively easier to expand the operations to include~~
~~smal businesses disaster grants rather than establishing new grant-making operations within~~
~~SBA. Second, having FEMA administer the smal business disaster grant program may limit~~
~~duplication of administrative functions between FEMA and SBA. Third, it would provide access~~
~~to FEMA’s Disaster Relief Fund (DRF) which, as of July 31, 2020, had roughly $74 bil ion for~~
~~disaster assistance activities.45~~44 For eligible Community Development Block Grant activities related to COVID-19, see U.S. Department of Housing and Urban Development, “ Quick Guide to CDBG Eligible Activities to Support Infectious Disease Response,” March 19, 2020, at https://files.hudexchange.info/resources/documents/Quick-Guide-CDBG-Infectious-Disease-Response.pdf. 45 Federal Emergency Management Agency, Disaster Relief Fund: Monthly Report, August 7, 2020, at https://www.fema.gov/about/reports-and-data/disaster-relief-fund-monthly-reports. For more information on the DRF see CRS Report R45484, The Disaster Relief Fund: Overview and Issues, by William L. Painter. Also, on August 8, 2020, President T rump issued a memorandum directing “up to $44 billion from the Disaster Relief Congressional Research Service 13 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options
In contrast, Congress could decide to have SBA administer the program because it already has a In contrast, Congress could decide to have SBA administer the program because it already has a
framework in place to evaluate business disaster needs and disaster loan eligibility. Congress may framework in place to evaluate business disaster needs and disaster loan eligibility. Congress may
need to make statutory changes to SBA’s disaster loan account or authorize a new account to need to make statutory changes to SBA’s disaster loan account or authorize a new account to
receive appropriations for disaster grants. receive appropriations for disaster grants.
Another concern about providing grants to businesses is whether businesses provided SBA EIDL Another concern about providing grants to businesses is whether businesses provided SBA EIDL
wil be eligible for grant assistance. For example, in some cases homeowners and businesses that wil be eligible for grant assistance. For example, in some cases homeowners and businesses that
accepted disaster loans were deemed ineligible for disaster grants. This may make some accepted disaster loans were deemed ineligible for disaster grants. This may make some
businesses reluctant to apply for SBA EIDL and instead hold out for the possibility of a grant. businesses reluctant to apply for SBA EIDL and instead hold out for the possibility of a grant.
Congress may therefore al ow businesses to use grant money to pay down their SBA EIDL. Congress may therefore al ow businesses to use grant money to pay down their SBA EIDL.
Another potential concern is waste, fraud, and abuse. For example, Section 1210 of the Disaster Another potential concern is waste, fraud, and abuse. For example, Section 1210 of the Disaster
Recovery Reform Act of 2018 (DRRA, Division D of P.L. 115-254) prohibits the President from Recovery Reform Act of 2018 (DRRA, Division D of P.L. 115-254) prohibits the President from
determining loans as duplicative assistance provided al federal assistance is used toward loss determining loans as duplicative assistance provided al federal assistance is used toward loss
resulting from an emergency or major disaster under the Stafford Act. Consequently, businesses resulting from an emergency or major disaster under the Stafford Act. Consequently, businesses
that obtain SBA EIDL and a grant for the same purposes would conceivably not be required to that obtain SBA EIDL and a grant for the same purposes would conceivably not be required to
pay back the duplicative award. pay back the duplicative award.
Congress could consider limiting grants to relatively smal businesses as compared to what is Congress could consider limiting grants to relatively smal businesses as compared to what is
considered a smal business according to SBA size standards.46 For example, business grants considered a smal business according to SBA size standards.46 For example, business grants
could be limited to businesses with 10 or fewer employees. could be limited to businesses with 10 or fewer employees.
The CARES Act authorizes the SBA Administrator to provide up to $10,000 as an advance The CARES Act authorizes the SBA Administrator to provide up to $10,000 as an advance
payment in the amount requested within three days after receiving an EIDL application from an payment in the amount requested within three days after receiving an EIDL application from an
eligible entity. Applicants are not required to repay the advance payment, referred to in the eligible entity. Applicants are not required to repay the advance payment, referred to in the

~~44 For eligible Community Development Block Grant activities related to COVID-19, see U.S. Department of Housing~~
~~and Urban Development, “ Quick Guide to CDBG Eligible Activities to Support Infectious Disease Response,” March~~
~~19, 2020, at https://files.hudexchange.info/resources/documents/Quick-Guide-CDBG-Infectious-Disease-Response.pdf.~~
~~45 Federal Emergency Management Agency, Disaster Relief Fund: Monthly Report, August 7, 2020, at~~
~~https://www.fema.gov/about/reports-and-data/disaster-relief-fund-monthly-reports. For more information on the DRF~~
~~see CRS Report R45484, The Disaster Relief Fund: Overview and Issues, by William L. Painter.~~
~~Also, on August 8, 2020, President T rump issued a memorandum directing “up to $44 billion from the Disaster Relief~~
CARES Act as an Emergency EIDL grant, even if subsequently denied an EIDL loan. Due to anticipated demand, the SBA limited Emergency EIDL grants to $1,000 per employee, up to a maximum of $10,000. The CARES Act addressed waste, fraud, and abuse by providing the SBA’s OIG $25 mil ion for oversight of the SBA’s administration of its lending programs and for investigations to serve as a general deterrent to fraud, waste, and abuse. Also, as mentioned, if enacted, H.R. 133, the Economic Aid to Hard-Hit Smal Businesses, Nonprofits, and Venues Act (Division M, Title III of the Consolidated Appropriations Act of 2021), would appropriate an additional $20 bil ion for the EIDL Targeted advance payment (grant) program. SBA’s OIG is to receive $20 mil ion of that amount “to prevent waste, fraud, and abuse” in the awarding of the grants. Fund at the statutorily mandated 75 percent Federal cost share be made available for lost wages assistance to eligible Fund at the statutorily mandated 75 percent Federal cost share be made available for lost wages assistance to eligible
claimants, to supplement State expenditures in providing these payments. At least $25 billion of total DRF balances claimants, to supplement State expenditures in providing these payments. At least $25 billion of total DRF balances
will be set aside to support ongoing disaster response and recovery efforts and potential 2020 major disaster costs.” See will be set aside to support ongoing disaster response and recovery efforts and potential 2020 major disaster costs.” See
President Donald T rump, “ Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster President Donald T rump, “ Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster
Declarations Related to Coronavirus Disease 2019 ,” August 8, 2020, at https://www.whitehouse.gov/presidential-Declarations Related to Coronavirus Disease 2019 ,” August 8, 2020, at https://www.whitehouse.gov/presidential-
actions/memorandum-authorizing-needs-assistance-program-major-disaster-declarations-related-coronavirus-disease-actions/memorandum-authorizing-needs-assistance-program-major-disaster-declarations-related-coronavirus-disease-
2019/. 2019/.
46 For more information and analysis concerning SBA size standards, see CRS Report R40860, 46 For more information and analysis concerning SBA size standards, see CRS Report R40860, Small Business Size
Standards: A Historical Analysis of Contem porary Issues, by Robert Jay Dilger. , by Robert Jay Dilger.
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~~CARES Act as an Emergency EIDL grant, even if subsequently denied an EIDL loan. Due to~~
~~anticipated demand, the SBA limited Emergency EIDL grants to $1,000 per employee, up to a~~
~~maximum of $10,000.~~
~~The CARES Act addresses waste, fraud, and abuse by providing the SBA’s OIG $25 mil ion for~~
~~oversight of the SBA’s administration of its lending programs and for investigations to serve as a~~
~~general deterrent to fraud, waste, and abuse.~~
SBA EIDL Interest Rates
According to the SBA’s March 17, 2020, press release, SBA EIDL interest rates for COVD-19 According to the SBA’s March 17, 2020, press release, SBA EIDL interest rates for COVD-19
are 3.75% for businesses and 2.75% for nonprofit organizations.47 are 3.75% for businesses and 2.75% for nonprofit organizations.47
SBA disaster loan interest rates have been a long-standing congressional concern. First, there is SBA disaster loan interest rates have been a long-standing congressional concern. First, there is
concern about the ability of disaster victims to pay off their loans. Second, there is concern about concern about the ability of disaster victims to pay off their loans. Second, there is concern about
how interest rates are determined given the complexity of the statutory language about disaster how interest rates are determined given the complexity of the statutory language about disaster
loan interest rates. 15 U.S.C. §636(d)(5)(C)) states that interest rates are “in the case of a loan interest rates. 15 U.S.C. §636(d)(5)(C)) states that interest rates are “in the case of a
business, private nonprofit organization, or other concern, including agricultural cooperatives, business, private nonprofit organization, or other concern, including agricultural cooperatives,
unable to obtain credit elsewhere, not to exceed 4 per centum per annum.”48 To determine EIDL unable to obtain credit elsewhere, not to exceed 4 per centum per annum.”48 To determine EIDL
interest rates, SBA uses a formula under 15 U.S.C. §636(d)(4)(A): interest rates, SBA uses a formula under 15 U.S.C. §636(d)(4)(A):
Notwithstanding the provisions of the constitution of any State or the laws of any State Notwithstanding the provisions of the constitution of any State or the laws of any State
limiting the rate or amount of interest which may be charged, taken, received, or reserved, limiting the rate or amount of interest which may be charged, taken, received, or reserved,
the maximum legal rate of interest on any financing made on a deferred basis pursuant to the maximum legal rate of interest on any financing made on a deferred basis pursuant to
this subsection shall not exceed a rate prescribed by the Administration, and the rate of this subsection shall not exceed a rate prescribed by the Administration, and the rate of
interest for the Administration’s share of any direct or immediate participation loan shal interest for the Administration’s share of any direct or immediate participation loan shal
not exceed the current average market yield on outstanding marketable obligations of the not exceed the current average market yield on outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average maturities of United States with remaining periods to maturity comparable to the average maturities of
such loans and adjusted to the nearest one-eighth of 1 per centum, and an additional amount such loans and adjusted to the nearest one-eighth of 1 per centum, and an additional amount
as determined by the Administration, but not to exceed 1 per centum per annum: Provided, as determined by the Administration, but not to exceed 1 per centum per annum: Provided,
That for those loans to assist any public or private organization for the handicapped or to That for those loans to assist any public or private organization for the handicapped or to
assist any handicapped individual as provided in paragraph (10) of this subsection, the assist any handicapped individual as provided in paragraph (10) of this subsection, the
interest rate shall be 3 per centum per annum. interest rate shall be 3 per centum per annum.
Congress could request SBA to reevaluate its interpretation of 15 U.S.C. §636(d)(4)(A) and Congress could request SBA to reevaluate its interpretation of 15 U.S.C. §636(d)(4)(A) and
provide detailed information explaining how the formula provides nonprofit organizations with provide detailed information explaining how the formula provides nonprofit organizations with
lower interest rates than smal businesses. Alternatively, Congress could change the formula lower interest rates than smal businesses. Alternatively, Congress could change the formula
under the Smal Business Act if it considered the language ambiguous, or it could designate an under the Smal Business Act if it considered the language ambiguous, or it could designate an
interest rate (including a zero interest rate) for al SBA EIDL for the duration of COVID-19. interest rate (including a zero interest rate) for al SBA EIDL for the duration of COVID-19.

SBA Capital Access Programs Overview The SBA has authority to make direct loans but, with the exception of disaster loans and loans to Microloan program intermediaries, has not exercised that authority since 1998.49 The SBA 47 Small Business Administration, 47 Small Business Administration, SBA Updates Criteria on States for Requesting Disaster Assistance Loans for Small
Businesses Im pacted by Coronavirus (COVID-19), March 17, 2020, at https://www.sba.gov/about-sba/sba-newsroom/, March 17, 2020, at https://www.sba.gov/about-sba/sba-newsroom/
press-releases-media-advisories/sba-updates-criteria-states-requesting-disaster-assistance-loans-small-businesses-press-releases-media-advisories/sba-updates-criteria-states-requesting-disaster-assistance-loans-small-businesses-
impacted. impacted.
48 Only businesses and nonprofit organizations that cannot get credit elsewhere are eligible for SBA EIDL . 48 Only businesses and nonprofit organizations that cannot get credit elsewhere are eligible for SBA EIDL .
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~~SBA Capital Access Programs~~
~~Overview~~
~~The SBA has authority to make direct loans but, with the exception of disaster loans and loans to~~
~~Microloan program intermediaries, has not exercised that authority since 1998.49 The SBA~~
~~indicated that it stopped issuing direct business loans primarily because the subsidy rate was “10~~
49 Prior to October 1, 1985, the SBA provided direct business loans to qualified small businesses. From October 1, 1985, to September 30, 1994, SBA direct business loan eligibility was limited to qualified small businesses owned by individuals with low incomes or located in areas of high unemployment, owned by Vietnam-era or disabled veterans, owned by the handicapped or certain organizations employing them, and certified under the minority small business capital ownership development program. Microloan program intermediaries were also eligible. On October 1, 1994, SBA direct loan eligibility was limited to Microloan program intermediaries and small businesses owned by the handicapped. Funding to support direct loans to the handicapped through the Handicapped Assistance (renamed the Disabled Assistance) Loan program ended in 1996. T he last loan under the Disabled Assistance Loan program was issued in FY1998. See U.S. Congress, House Committee on Small Business, Sum m ary of Activities, 105rd Cong., 2nd Congressional Research Service 15 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options indicated that it stopped issuing direct business loans primarily because the subsidy rate was “10 to 15 times higher” than the subsidy rate for its loan guaranty programs.50 Instead of making to 15 times higher” than the subsidy rate for its loan guaranty programs.50 Instead of making
direct loans, the SBA guarantees loans issued by approved lenders to encourage those lenders to direct loans, the SBA guarantees loans issued by approved lenders to encourage those lenders to
provide loans to smal businesses “that might not otherwise obtain financing on reasonable terms provide loans to smal businesses “that might not otherwise obtain financing on reasonable terms
and conditions.”51 With few exceptions, to qualify for SBA assistance, an organization must be and conditions.”51 With few exceptions, to qualify for SBA assistance, an organization must be
both a for-profit business and smal .52 both a for-profit business and smal .52
What Is a “Small Business”?
To participate in any of the SBA loan guaranty programs, a business must meet the Smal To participate in any of the SBA loan guaranty programs, a business must meet the Smal
Business Act’s definition of Business Act’s definition of small business. This is a business that . This is a business that
 is organized for profit;  is organized for profit;
 has a place of business in the United States;  has a place of business in the United States;
 operates primarily within the United States or makes a significant contribution to  operates primarily within the United States or makes a significant contribution to
the U.S. economy through payment of taxes or use of American products, the U.S. economy through payment of taxes or use of American products,
materials, or labor; materials, or labor;
 is independently owned and operated;  is independently owned and operated;
 is not dominant in its field on a national basis;53 and  is not dominant in its field on a national basis;53 and
 does not exceed size standards established, and updated periodical y, by the  does not exceed size standards established, and updated periodical y, by the
SBA.54 SBA.54
The business may be a sole proprietorship, partnership, corporation, or any other legal form. The business may be a sole proprietorship, partnership, corporation, or any other legal form.

~~49 Prior to October 1, 1985, the SBA provided direct business loans to qualified small businesses. From October 1,~~
~~1985, to September 30, 1994, SBA direct business loan eligibility was limited to qualified small businesses owned by~~
~~individuals with low incomes or located in areas of high unemployment, owned by Vietnam-era or disabled veterans,~~
~~owned by the handicapped or certain organizations employing them, and certified under the minority small business~~
~~capital ownership development program. Microloan program intermediaries were also eligible. On October 1, 1994,~~
~~SBA direct loan eligibility was limited to Microloan program intermediaries and small businesses owned by the~~
~~handicapped. Funding to support direct loans to the handicapped through the Handicapped Assistance (renamed the~~
~~Disabled Assistance) Loan program ended in 1996. T he last loan under the Disabled Assistance Loan program was~~
~~issued in FY1998. See U.S. Congress, House Committee on Small Business, Sum m ary of Activities, 105rd Cong., 2nd~~
What Is “Small”?55 The SBA uses two measures to determine if a business is smal : SBA-derived industry specific size standards or a combination of the business’s net worth and net income. For example, businesses participating in the SBA’s 7(a) loan guaranty program are deemed smal if they either meet the SBA’s industry-specific size standards for firms in 1,047 industrial classifications in 18 subindustry activities described in the North American Industry Classification System (NAICS) or do not have more than $15 mil ion in tangible net worth and not more than $5 mil ion in average net income after federal taxes (excluding any carryover losses) for the two full fiscal sess., January 2, 1999, H.Rept. 105-849 (Washington, DC: GPO, 1999), p. 8. sess., January 2, 1999, H.Rept. 105-849 (Washington, DC: GPO, 1999), p. 8.
50 U.S. Congress, Senate Committee on Small Business, 50 U.S. Congress, Senate Committee on Small Business, Hearing on the Proposed Fiscal Year 1995 Budget for the
Sm all Business Adm inistration, 103rd Cong., 2nd sess., February 22, 1994, S.Hrg. 103-583 (Washington, DC: GPO, , 103rd Cong., 2nd sess., February 22, 1994, S.Hrg. 103-583 (Washington, DC: GPO,
1994), p. 20. 1994), p. 20.
51 SBA, 51 SBA, Fiscal Year 2010 Congressional Budget Justification, p. 30, at https://www.sba.gov/sites/default/files/p. 30, at https://www.sba.gov/sites/default/files/
Congressional_Budget_Justification_2010.pdf. Congressional_Budget_Justification_2010.pdf.
52 T he SBA provides financial assistance to nonprofit organizations to provide training to small business owners and to 52 T he SBA provides financial assistance to nonprofit organizations to provide training to small business owners and to
provide loans to small businesses through the SBA Microloan program. Also, nonprofit child care centers are eligible provide loans to small businesses through the SBA Microloan program. Also, nonprofit child care centers are eligible
to participate in SBA’s Microloan program. to participate in SBA’s Microloan program.
53 13 C.F.R. §121.105. 53 13 C.F.R. §121.105.
54 P.L. 111-240, the Small Business Jobs Act of 2010, requires the SBA to conduct a detailed review of not less than 54 P.L. 111-240, the Small Business Jobs Act of 2010, requires the SBA to conduct a detailed review of not less than
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~~What Is “Small”?55~~
~~The SBA uses two measures to determine if a business is smal : SBA-derived industry specific~~
~~size standards or a combination of the business’s net worth and net income. For example,~~
~~businesses participating in the SBA’s 7(a) loan guaranty program are deemed smal if they either~~
~~meet the SBA’s industry-specific size standards for firms in 1,047 industrial classifications in 18~~
~~subindustry activities described in the North American Industry Classification System (NAICS)~~
~~or do not have more than $15 mil ion in tangible net worth and not more than $5 mil ion in~~
~~average net income after federal taxes (excluding any carryover losses) for the two full fiscal~~
one-third of the SBA’s industry size standards every 18 months beginning on the new law’s date of enactment (September 27, 2010) and ensure that each size standard is reviewed at least once every five years. 55 For additional information and analysis, see CRS Report R40860, Small Business Size Standards: A Historical Analysis of Contem porary Issues, by Robert Jay Dilger. Congressional Research Service 16 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options years before the date of the application. Al of the company’s subsidiaries, parent companies, and years before the date of the application. Al of the company’s subsidiaries, parent companies, and
affiliates are considered in determining if it meets the size standard.56 affiliates are considered in determining if it meets the size standard.56
The SBA’s industry size standards vary by industry, and they are based on one of the following The SBA’s industry size standards vary by industry, and they are based on one of the following
four measures: the firm’s (1) average annual receipts in the previous three (or five) years, (2) four measures: the firm’s (1) average annual receipts in the previous three (or five) years, (2)
number of employees, (3) asset size, or (4) for refineries, a combination of number of employees number of employees, (3) asset size, or (4) for refineries, a combination of number of employees
and barrel per day refining capacity. Historical y, the SBA has used the number of employees to and barrel per day refining capacity. Historical y, the SBA has used the number of employees to
determine if manufacturing and mining companies are smal and average annual receipts for most determine if manufacturing and mining companies are smal and average annual receipts for most
other industries. other industries.
The SBA’s size standards are designed to encourage competition within each industry. They are The SBA’s size standards are designed to encourage competition within each industry. They are
derived through an assessment of the following four economic factors: “average firm size, derived through an assessment of the following four economic factors: “average firm size,
average assets size as a proxy of start-up costs and entry barriers, the 4-firm concentration ratio as average assets size as a proxy of start-up costs and entry barriers, the 4-firm concentration ratio as
a measure of industry competition, and size distribution of firms.”57 The SBA also considers the a measure of industry competition, and size distribution of firms.”57 The SBA also considers the
ability of smal businesses to compete for federal contracting opportunities and, when necessary, ability of smal businesses to compete for federal contracting opportunities and, when necessary,
several secondary factors “as they are relevant to the industries and the interests of smal several secondary factors “as they are relevant to the industries and the interests of smal
businesses, including technological change, competition among industries, industry growth businesses, including technological change, competition among industries, industry growth
trends, and impacts of size standard revisions on smal businesses.”58 trends, and impacts of size standard revisions on smal businesses.”58
SBA Loan Guarantee Programs
Overview
The SBA provides loan guarantees for smal businesses that cannot obtain credit elsewhere. Its The SBA provides loan guarantees for smal businesses that cannot obtain credit elsewhere. Its
largest loan guaranty programs are the 7(a) loan guaranty program, the 504/CDC loan guaranty largest loan guaranty programs are the 7(a) loan guaranty program, the 504/CDC loan guaranty
program, and the Microloan program. program, and the Microloan program.
The SBA’s loan guaranty programs require personal guarantees from borrowers and share the risk The SBA’s loan guaranty programs require personal guarantees from borrowers and share the risk
of default with lenders by making the guaranty less than 100%. In the event of a default, the of default with lenders by making the guaranty less than 100%. In the event of a default, the
borrower owes the amount contracted less the value of any collateral liquidated. The SBA can borrower owes the amount contracted less the value of any collateral liquidated. The SBA can
attempt to recover the unpaid debt through administrative offset, salary offset, or IRS tax refund attempt to recover the unpaid debt through administrative offset, salary offset, or IRS tax refund
offset. Most types of businesses are eligible for loan guarantees. A list of ineligible businesses (such as insurance companies, real estate investment firms, firms involved in financial speculation or pyramid sales, and businesses involved in il egal activities) is c ontained in 13 C.F.R. §120.110.59 With one exception, nonprofit and charitable organizations are also ineligible.60 Most of these programs charge fees to help offset program costs, including costs related to loan defaults. In most instances, the fees are set in statute. For example, for 7(a) loans with a maturity exceeding 12 months, the SBA is authorized to charge lenders an up-front guaranty fee of up to 2% for the SBA guaranteed portion of loans of $150,000 or less, up to 3% for the SBA guaranteed 56 13 C.F.R. §121.201 and P.L. 111-240, the Small Business Act of 2010, §1116. Alternative Size Standards. 57 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April 2019, p. 29, at https://www.sba.gov/document/support —size-standards-methodology-white-paper (hereinafter cited as SBA, “SBA Size Standards Methodology”). 58 SBA, “SBA Size Standards Methodology,” p. 1. 59 T itle 13 of the Code of Federal Regulations can be viewed at https://www.gpo.gov/fdsys/browse/collectionCfr.action?selectedYearFrom=2016&go=Go. 60 P.L. 105-135, the Small Business Reauthorization Act of 1997, expanded the SBA’s Microloan program’s eligibility to include borrowers establishing a nonprofit child care business. Congressional Research Service 17 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options ~~offset. Most types of businesses are eligible for loan guarantees. A list of ineligible businesses~~

~~one-third of the SBA’s industry size standards every 18 months beginning on the new law’s date of enactment~~
~~(September 27, 2010) and ensure that each size standard is reviewed at least once every five years.~~
~~55 For additional information and analysis, see CRS Report R40860,~~ ~~Small Business Size Standards: A Historical~~
~~Analysis of Contem porary Issues, by Robert Jay Dilger.~~
~~56 13 C.F.R. §121.201 and P.L. 111-240, the Small Business Act of 2010, §1116. Alternative Size Standards.~~
~~57 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April~~
~~2019, p. 29, at https://www.sba.gov/document/support —size-standards-methodology-white-paper (hereinafter cited as~~
~~SBA, “SBA Size Standards Methodology”).~~
~~58 SBA, “SBA Size Standards Methodology,” p. 1.~~
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~~(such as insurance companies, real estate investment firms, firms involved in financial~~
~~speculation or pyramid sales, and businesses involved in il egal activities) is contained in 13~~
~~C.F.R. §120.110.59 With one exception, nonprofit and charitable organizations are also~~
~~ineligible.60~~
~~Most of these programs charge fees to help offset program costs, including costs related to loan~~
~~defaults. In most instances, the fees are set in statute. For example, for 7(a) loans with a maturity~~
~~exceeding 12 months, the SBA is authorized to charge lenders an up-front guaranty fee of up to~~
~~2% for the SBA guaranteed portion of loans of $150,000 or less, up to 3% for the SBA guaranteed~~
portion of loans exceeding $150,000 but not more than $700,000, and up to 3.5% for the SBA portion of loans exceeding $150,000 but not more than $700,000, and up to 3.5% for the SBA
guaranteed portion of loans exceeding $700,000. Lenders who have a 7(a) loan that has a SBA guaranteed portion of loans exceeding $700,000. Lenders who have a 7(a) loan that has a SBA
guaranteed portion in excess of $1 mil ion can be charged an additional fee not to exceed 0.25% guaranteed portion in excess of $1 mil ion can be charged an additional fee not to exceed 0.25%
of the guaranteed amount in excess of $1 mil ion. of the guaranteed amount in excess of $1 mil ion.
7(a) loans are also subject to an ongoing servicing fee not to exceed 0.55% of the outstanding 7(a) loans are also subject to an ongoing servicing fee not to exceed 0.55% of the outstanding
balance of the guaranteed portion of the loan.61 In addition, lenders are authorized to collect fees balance of the guaranteed portion of the loan.61 In addition, lenders are authorized to collect fees
from borrowers to offset their administrative expenses. from borrowers to offset their administrative expenses.
In an effort to assist smal business owners, the SBA has, from time-to-time, reduced its fees. For In an effort to assist smal business owners, the SBA has, from time-to-time, reduced its fees. For
example, in FY2019, the SBA waived the annual service fee for 7(a) loans of $150,000 or less example, in FY2019, the SBA waived the annual service fee for 7(a) loans of $150,000 or less
made to smal businesses located in a rural area or a HUBZone and reduced the up-front one-time made to smal businesses located in a rural area or a HUBZone and reduced the up-front one-time
guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan.62 guaranty fee for these loans from 2.0% to 0.6667% of the guaranteed portion of the loan.62
In addition, pursuant to P.L. 114-38, the Veterans Entrepreneurship Act of 2015, the SBA is In addition, pursuant to P.L. 114-38, the Veterans Entrepreneurship Act of 2015, the SBA is
required to waive the up-front, one-time guaranty fee on al veteran loans under the 7(a) required to waive the up-front, one-time guaranty fee on al veteran loans under the 7(a)
SBAExpress program (up to and including $350,000) “except during any upcoming fiscal year SBAExpress program (up to and including $350,000) “except during any upcoming fiscal year
for which the President’s budget, submitted to Congress, includes a cost for the 7(a) program, in for which the President’s budget, submitted to Congress, includes a cost for the 7(a) program, in
its entirety, that is above zero.”63 its entirety, that is above zero.”63
The SBA’s goal is to achieve a zero subsidy rate, meaning that the appropriation of budget The SBA’s goal is to achieve a zero subsidy rate, meaning that the appropriation of budget
authority for new loan guaranties is not required. authority for new loan guaranties is not required.
7(a) Loan Guaranty Program64
The 7(a) loan guaranty program is named after the section of the Smal Business Act that The 7(a) loan guaranty program is named after the section of the Smal Business Act that
authorizes it. The loans are made by SBA lending partners (mostly banks but also some other authorizes it. The loans are made by SBA lending partners (mostly banks but also some other
financial institutions) and partial y guaranteed by the SBA. Borrowers may use 7(a) loan proceeds financial institutions) and partial y guaranteed by the SBA. Borrowers may use 7(a) loan proceeds

~~59 T itle 13 of the Code of Federal Regulations can be viewed at https://www.gpo.gov/fdsys/browse/~~
~~collectionCfr.action?selectedYearFrom=2016&go=Go.~~
~~60 P.L. 105-135, the Small Business Reauthorization Act of 1997, expanded the SBA’s Microloan program’s eligibility~~
~~to include borrowers establishing a nonprofit child care business.~~
to establish a new business or to assist in the operation, acquisition, or expansion of an existing business. 7(a) loan proceeds may be used to  acquire land (by purchase or lease);  improve a site (e.g., grading, streets, parking lots, landscaping), including up to 5% for community improvements such as curbs and sidewalks;  purchase one or more existing buildings;  convert, expand, or renovate one or more existing buildings;  construct one or more new buildings;  acquire (by purchase or lease) and instal fixed assets;  purchase inventory, supplies, and raw materials; 61 15 U.S.C. §636(a)(23)(a). 61 15 U.S.C. §636(a)(23)(a).
62 SBA, “SBA Information Notice: 7(a) Fees Effective on October 1, 201 8,” at https://www.sba.gov/document/62 SBA, “SBA Information Notice: 7(a) Fees Effective on October 1, 201 8,” at https://www.sba.gov/document/
information-notice-5000-180010-7a-fees-effective-october-1-2018. information-notice-5000-180010-7a-fees-effective-october-1-2018.
63 T he SBA had waived the up-front, one-time guaranty fee on all veteran loans under the 7(a) SBAExpress program 63 T he SBA had waived the up-front, one-time guaranty fee on all veteran loans under the 7(a) SBAExpress program
from January 1, 2014, through the end of FY2015. P.L. 114-38 made the SBAExpress program’s veteran fee waiver from January 1, 2014, through the end of FY2015. P.L. 114-38 made the SBAExpress program’s veteran fee waiver
permanent, except during any upcoming fiscal year for which the President’s budget, submitted to Congress, includes a permanent, except during any upcoming fiscal year for which the President’s budget, submitted to Congress, includes a
cost for the 7(a) program, in its entirety, that is above zero. T he SBA waived the fee, pursuant to P.L. 114-38, in cost for the 7(a) program, in its entirety, that is above zero. T he SBA waived the fee, pursuant to P.L. 114-38, in
FY2016, FY2017, FY2018, and FY2019. FY2016, FY2017, FY2018, and FY2019.
64 For further information and analysis, see CRS Report R41146, 64 For further information and analysis, see CRS Report R41146, Small Business Administration 7(a) Loan Guaranty
Program , by Robert Jay Dilger. , by Robert Jay Dilger.
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~~to establish a new business or to assist in the operation, acquisition, or expansion of an existing~~
~~business. 7(a) loan proceeds may be used to~~
~~ acquire land (by purchase or lease);~~
~~ improve a site (e.g., grading, streets, parking lots, landscaping), including up to~~
~~5% for community improvements such as curbs and sidewalks;~~
~~ purchase one or more existing buildings;~~
~~ convert, expand, or renovate one or more existing buildings;~~
~~ construct one or more new buildings;~~
~~ acquire (by purchase or lease) and instal fixed assets;~~
~~ purchase inventory, supplies, and raw materials;~~
 finance working capital; and  finance working capital; and
 refinance certain outstanding debts.65  refinance certain outstanding debts.65
In FY2020, the SBA approved 42,302 7(a) loans, totaling $22.6 bil ion.66 In FY2019, there were In FY2020, the SBA approved 42,302 7(a) loans, totaling $22.6 bil ion.66 In FY2019, there were
1,708 active lending partners providing 7(a) loans. 1,708 active lending partners providing 7(a) loans.
The 7(a) program’s current guaranty rate is 85% for loans of $150,000 or less and 75% for loans The 7(a) program’s current guaranty rate is 85% for loans of $150,000 or less and 75% for loans
greater than $150,000 (up to a maximum guaranty of $3.75 mil ion, or 75% of $5 mil ion).67 greater than $150,000 (up to a maximum guaranty of $3.75 mil ion, or 75% of $5 mil ion).67
Although the SBA’s offer to guarantee a loan provides an incentive for lenders to make the loan, Although the SBA’s offer to guarantee a loan provides an incentive for lenders to make the loan,
lenders are not required to do so. lenders are not required to do so.
A 7(a) loan is required to have the shortest appropriate term, depending upon the borrower’s A 7(a) loan is required to have the shortest appropriate term, depending upon the borrower’s
ability to repay. The maximum term is 10 years, unless the loan finances or refinances real estate ability to repay. The maximum term is 10 years, unless the loan finances or refinances real estate
or equipment with a useful life exceeding 10 years. In that case, the loan term can be up to 25 or equipment with a useful life exceeding 10 years. In that case, the loan term can be up to 25
years, including extensions.68 years, including extensions.68
Lenders are permitted to charge borrowers fees to recoup specified expenses and are al owed to Lenders are permitted to charge borrowers fees to recoup specified expenses and are al owed to
charge borrowers “a reasonable fixed interest rate” or, with the SBA’s approval, a variable charge borrowers “a reasonable fixed interest rate” or, with the SBA’s approval, a variable
interest rate. The SBA uses a multistep formula to determine the maximum al owable fixed interest rate. The SBA uses a multistep formula to determine the maximum al owable fixed
interest rate for al 7(a) loans (with the exception of the Export Working Capital Program and interest rate for al 7(a) loans (with the exception of the Export Working Capital Program and
Community Advantage loans) and periodical y publishes that rate and the maximum al owable Community Advantage loans) and periodical y publishes that rate and the maximum al owable
variable interest rate in the variable interest rate in the Federal Register.69 .69
In December 2020, the maximum al owable fixed interest rates are 11.25% for 7(a) loans of $25,000 or less; 10.25% for loans over $25,000 but not exceeding $50,000; 9.25% for loans over $50,000 up to and including $250,000; and 8.25% for loans greater than $250,000.70 Maximum interest rates al owed on variable-rate 7(a) loans are pegged to either the prime rate, the 30-day London Interbank Offered Rate (LIBOR) plus 3%, or the SBA optional peg rate, which is a weighted average of rates that the federal government pays for loans with maturities similar to the guaranteed loan. The al owed spread over the prime rate, LIBOR base rate, or SBA optional peg rate depends on the loan amount and the loan’s maturity (under seven years or seven
65 13 C.F.R. §120.120. 65 13 C.F.R. §120.120.
66 SBA, “Weekly Approvals Report with data as of 9/30 for each FY,” September 30, 2020, at https://www.sba.gov/66 SBA, “Weekly Approvals Report with data as of 9/30 for each FY,” September 30, 2020, at https://www.sba.gov/
sites/default/files/2020-10/WebsiteReport_asof_20200930-508.pdf. sites/default/files/2020-10/WebsiteReport_asof_20200930-508.pdf.
67 Exceptions to this general schedule of guaranty rates include loans made under the International T rade, Export 67 Exceptions to this general schedule of guaranty rates include loans made under the International T rade, Export
Working Capital Program, or Export Express (90% guaranty); and the SBAExpress program (50% guaranty). Working Capital Program, or Export Express (90% guaranty); and the SBAExpress program (50% guaranty).
68 13 C.F.R. §120.212. A portion of a 7(a) loan used to acquire or improve real property may have a term of 25 years 68 13 C.F.R. §120.212. A portion of a 7(a) loan used to acquire or improve real property may have a term of 25 years
plus an additional period needed to complete the construction or improvements. plus an additional period needed to complete the construction or improvements.
69 For fixed interest rates, the SBA, effective November 6, 2018, uses the prime rate (see 13 C.F.R. §120.214(c)) in 69 For fixed interest rates, the SBA, effective November 6, 2018, uses the prime rate (see 13 C.F.R. §120.214(c)) in
effect on effect on ~~t he~~the first business day of the month as the base rate and increases the maximum allowable interest rate spread first business day of the month as the base rate and increases the maximum allowable interest rate spread
as follows: for fixed rate loans of $25,000 or less, prime plus 600 basis points, p lus the 200 basis points permitted by 13 as follows: for fixed rate loans of $25,000 or less, prime plus 600 basis points, p lus the 200 basis points permitted by 13
C.F.R. §120.215; for fixed rate loans over $25,000 but not exceeding $50,000, prime plus 600 basis points, plus the 100 C.F.R. §120.215; for fixed rate loans over $25,000 but not exceeding $50,000, prime plus 600 basis points, plus the 100
basis points permitted by 13 C.F.R. §120.215; for fixed rate loans greater than $50,000 but not exceeding $250,000, basis points permitted by 13 C.F.R. §120.215; for fixed rate loans greater than $50,000 but not exceeding $250,000,
prime plus 600 basis points; and for fixed rate loans over $250,000, prime plus 500 basis points. SBA, “ Maximum prime plus 600 basis points; and for fixed rate loans over $250,000, prime plus 500 basis points. SBA, “ Maximum
Allowable 7(a) Fixed Interest Rates,” 83 Allowable 7(a) Fixed Interest Rates,” 83 Federal Register 55478, November 6, 2018. For the previously used fixed 55478, November 6, 2018. For the previously used fixed
interest rates formula, see SBA, “ Business Loan Program Maximum Allowable Fixed Rate,” 74 interest rates formula, see SBA, “ Business Loan Program Maximum Allowable Fixed Rate,” 74 Federal Register
50263-50264, September 30, 2009. 50263-50264, September 30, 2009.
70 Colson Services Corp., “SBA Base Rates,” New York, at https://colsonservices.bnymellon.com/news/sba-base-rates.jsp. Congressional Research Service Congressional Research Service
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~~In November 2020, the maximum al owable fixed interest rates are 11.25% for 7(a) loans of~~
~~$25,000 or less; 10.25% for loans over $25,000 but not exceeding $50,000; 9.25% for loans over~~
~~$50,000 up to and including $250,000; and 8.25% for loans greater than $250,000.70~~
~~Maximum interest rates al owed on variable-rate 7(a) loans are pegged to either the prime rate,~~
~~the 30-day London Interbank Offered Rate (LIBOR) plus 3%, or the SBA optional peg rate,~~
~~which is a weighted average of rates that the federal government pays for loans with maturities~~
~~similar to the guaranteed loan. The al owed spread over the prime rate, LIBOR base rate, or SBA~~
~~optional peg rate depends on the loan amount and the loan’s maturity (under seven years or seven~~
years or more).71 The adjustment period can be no more than monthly and cannot change over the years or more).71 The adjustment period can be no more than monthly and cannot change over the
life of the loan. life of the loan.
The 504/CDC Loan Guaranty Program72
The 504/CDC loan guaranty program uses Certified Development Companies (CDCs), which are The 504/CDC loan guaranty program uses Certified Development Companies (CDCs), which are
private, nonprofit corporations established to contribute to economic development within their private, nonprofit corporations established to contribute to economic development within their
communities. Each CDC has its own geographic territory. The program provides long-term, communities. Each CDC has its own geographic territory. The program provides long-term,
fixed-rate loans for major fixed assets, such as land, structures, machinery, and equipment. fixed-rate loans for major fixed assets, such as land, structures, machinery, and equipment.
Program loans cannot be used for working capital, inventory, or repaying debt. A commercial Program loans cannot be used for working capital, inventory, or repaying debt. A commercial
lender provides up to 50% of the financing package, which is secured by a senior lien. The lender provides up to 50% of the financing package, which is secured by a senior lien. The
CDC’s loan of up to 40% is secured by a junior lien. The SBA backs the CDC with a guaranteed CDC’s loan of up to 40% is secured by a junior lien. The SBA backs the CDC with a guaranteed
debenture.73 The smal business must contribute at least 10% as equity. debenture.73 The smal business must contribute at least 10% as equity.
To participate in the program, smal businesses cannot exceed $15 mil ion in tangible net worth To participate in the program, smal businesses cannot exceed $15 mil ion in tangible net worth
and cannot have average net income of more than $5 mil ion for two full fiscal years before the and cannot have average net income of more than $5 mil ion for two full fiscal years before the
date of application. Also, CDCs must intend to create or retain one job for every $75,000 of the date of application. Also, CDCs must intend to create or retain one job for every $75,000 of the
debenture ($120,000 for smal manufacturers) or meet an alternative job creation standard if they debenture ($120,000 for smal manufacturers) or meet an alternative job creation standard if they
meet any one of 15 community or public policy goals. meet any one of 15 community or public policy goals.
Maximum 504/CDC participation in a single project is $5 mil ion and $5.5 mil ion for Maximum 504/CDC participation in a single project is $5 mil ion and $5.5 mil ion for
manufacturers and specified energy-related projects; the minimum is $25,000. There is no limit manufacturers and specified energy-related projects; the minimum is $25,000. There is no limit
on the project size. Loan maturity is 10 years for equipment and 20 or 25 years for real estate. on the project size. Loan maturity is 10 years for equipment and 20 or 25 years for real estate.
Unguaranteed financing may have a shorter term. The maximum fixed interest rate al owed is Unguaranteed financing may have a shorter term. The maximum fixed interest rate al owed is
established when the debenture backing the loan is sold and is pegged to an increment above the established when the debenture backing the loan is sold and is pegged to an increment above the
current market rate for 5-year and 10-year U.S. Treasury issues. current market rate for 5-year and 10-year U.S. Treasury issues.
The SBA is authorized to charge CDCs The SBA is authorized to charge CDCs
 a one-time, up-front guaranty fee of up to 0.5% of the debenture (0.5% in  a one-time, up-front guaranty fee of up to 0.5% of the debenture (0.5% in
FY2021), FY2021),

~~70 Colson Services Corp., “SBA Base Rates,” New York, at https://colsonservices.bnymellon.com/news/sba-base-~~
~~rates.jsp.~~
 an annual servicing fee of up to 0.9375% of the unpaid principal balance (0.4517% for regular 504/CDC loans and 0.4865% for 504/CDC debt refinance loans in FY2021),  a funding fee (not to exceed 0.25% of the debenture), an annual development company fee (0.125% of the debenture’s outstanding principal balance), and  a one-time participation fee (0.5% of the senior mortgage loan if in a senior lien position to the SBA and the loan was approved after September 30, 1996). In addition, CDCs are al owed to charge borrowers a processing (or packaging) fee of up to 1.5% of the net debenture proceeds and a closing fee, servicing fee, late fee, assumption fee, Central Servicing Agent (CSA) fee, other agent fees, and an underwriters’ fee. 71 T he maximum variable interest rates allowed for 7(a) loans with a maturity less than seven years are the base rate 71 T he maximum variable interest rates allowed for 7(a) loans with a maturity less than seven years are the base rate
plus 4.25% for loans less than $25,000; the base rate plus 3.25% for loans of $25,000-$50,000; and the base rate plus plus 4.25% for loans less than $25,000; the base rate plus 3.25% for loans of $25,000-$50,000; and the base rate plus
2.25% for loans over $50,000. T he maximum variable interest rates allowed for 7(a) loans with a maturity of seven 2.25% for loans over $50,000. T he maximum variable interest rates allowed for 7(a) loans with a maturity of seven
years or longer are the base rate plus 4.75% for loans less than $25,000; the base rate plus 3.75% for loans of $25,000-years or longer are the base rate plus 4.75% for loans less than $25,000; the base rate plus 3.75% for loans of $25,000-
$50,000; and the base rate plus 2.75% for loans over $50,000. See 13 C.F.R. §120.214 and 13 C.F.R. §120.215. $50,000; and the base rate plus 2.75% for loans over $50,000. See 13 C.F.R. §120.214 and 13 C.F.R. §120.215.
72 For further information and analysis, see CRS Report R41184, 72 For further information and analysis, see CRS Report R41184, Small Business Administration 504/CDC Loan
Guaranty Program , by Robert Jay Dilger. , by Robert Jay Dilger.
73 A debenture is a bond that is not secured by a lien on specific collateral. 73 A debenture is a bond that is not secured by a lien on specific collateral.
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~~ an annual servicing fee of up to 0.9375% of the unpaid principal balance~~
~~(0.4517% for regular 504/CDC loans and 0.4865% for 504/CDC debt refinance~~
~~loans in FY2021),~~
~~ a funding fee (not to exceed 0.25% of the debenture), an annual development~~
~~company fee (0.125% of the debenture’s outstanding principal balance), and~~
~~ a one-time participation fee (0.5% of the senior mortgage loan if in a senior lien~~
~~position to the SBA and the loan was approved after September 30, 1996).~~
~~In addition, CDCs are al owed to charge borrowers a processing (or packaging) fee of up to 1.5%~~
~~of the net debenture proceeds and a closing fee, servicing fee, late fee, assumption fee, Central~~
~~Servicing Agent (CSA) fee, other agent fees, and an underwriters’ fee.~~
In FY2020, the SBA approved 7,119 504/CDC loans, totaling over $5.8 bil ion.74 In FY2019, 212 In FY2020, the SBA approved 7,119 504/CDC loans, totaling over $5.8 bil ion.74 In FY2019, 212
CDCs provided at least one 504/CDC loan.75 CDCs provided at least one 504/CDC loan.75
504/CDC Refinancing Program
During the Great Recession (2007-2009), Congress authorized the SBA to temporarily al ow, During the Great Recession (2007-2009), Congress authorized the SBA to temporarily al ow,
under specified circumstances, the use of 504/CDC program funds to refinance existing under specified circumstances, the use of 504/CDC program funds to refinance existing
commercial debt (e.g., not from SBA-guaranteed loans) for business expansion under the commercial debt (e.g., not from SBA-guaranteed loans) for business expansion under the
504/CDC program.76 In 2010, Congress authorized, for two years, the expansion of the types of 504/CDC program.76 In 2010, Congress authorized, for two years, the expansion of the types of
projects eligible for refinancing of existing debt under the 504/CDC program to include projects projects eligible for refinancing of existing debt under the 504/CDC program to include projects
not involving business expansion, provided the projects met specific criteria.77 In the 114th not involving business expansion, provided the projects met specific criteria.77 In the 114th
Congress, Congress reinstated the expansion of the types of projects eligible for refinancing under Congress, Congress reinstated the expansion of the types of projects eligible for refinancing under
the 504/CDC loan guaranty program in any fiscal year in which the refinancing program and the the 504/CDC loan guaranty program in any fiscal year in which the refinancing program and the
504/CDC program as a whole do not have credit subsidy costs.78 Specifical y, each CDC is 504/CDC program as a whole do not have credit subsidy costs.78 Specifical y, each CDC is
required to limit its refinancing so that, during any fiscal year, the new refinancing does not required to limit its refinancing so that, during any fiscal year, the new refinancing does not
exceed 50% of the dollars it loaned under the 504/CDC program during the previous fiscal year. This limitation may be waived if the SBA determines that the refinance loan is needed for good cause. Commercial loans eligible for the 504/CDC Refinancing program being used to finance long-term fixed asset debt cannot have a loan-to-value (LTV) ratio of more than 90% of the fair market value of the eligible fixed asset(s) serving as collateral. Loans that are used to partly refinance eligible business operating expenses (e.g., salaries, rent, utilities) cannot exceed an LTV ratio of more than 85% of the fair market value of the collateral. The fees associated with the 504/CDC Refinancing program are the same as the 504/CDC Loan Guaranty program except the ongoing guaranty servicing fee may vary. In FY2020, the annual guaranty servicing fee is 0.3205% for regular 504/CDC loans and 0.322% for 504/CDC debt refinance loans. In FY2019, the SBA approved 166 refinancing loans totaling $154.8 mil ion.79 ~~exceed 50% of the dollars it loaned under the 504/CDC program during the previous fiscal year.~~

74 SBA, “Weekly Approvals Report with data as of 9/30 for each FY,” September 30, 2020, at https://www.sba.gov/74 SBA, “Weekly Approvals Report with data as of 9/30 for each FY,” September 30, 2020, at https://www.sba.gov/
sites/default/files/2020-10/WebsiteReport_asof_20200930-508.pdf. sites/default/files/2020-10/WebsiteReport_asof_20200930-508.pdf.
75 SBA, 75 SBA, FY2021 Congressional Budget Justification and FY2019 Annual Performance Report, pp. 41, 166. , pp. 41, 166.
76 P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA). T he specified circumstances include the 76 P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA). T he specified circumstances include the
following: the amount of existing indebtedness does not exceed 50% of the project cost of the expansion; the proceeds following: the amount of existing indebtedness does not exceed 50% of the project cost of the expansion; the proceeds
of the indebtedness were used to acquire land, including the building situated thereon, to construct a building thereon, of the indebtedness were used to acquire land, including the building situated thereon, to construct a building thereon,
or to purchase equipment; the existing indebtedness is collateralized by fixed assets; the existing indebtedness was or to purchase equipment; the existing indebtedness is collateralized by fixed assets; the existing indebtedness was
incurred for the benefit of a small business; the financing is used only for refinancing existing indebtedness or costs incurred for the benefit of a small business; the financing is used only for refinancing existing indebtedness or costs
related to the project being financed; the refinancing provides a substantial benefit to the borrower; the borrower has related to the project being financed; the refinancing provides a substantial benefit to the borrower; the borrower has
been current on all payments due on the existing debt for not less than one year preceding the date of refinancing; and been current on all payments due on the existing debt for not less than one year preceding the date of refinancing; and
the financing provided will have better terms or rate of interest than the existing in debtedness. the financing provided will have better terms or rate of interest than the existing in debtedness.
77 P.L. 111-240, the Small Business Jobs Act of 2010. A project that does not involve the expansion of a small business 77 P.L. 111-240, the Small Business Jobs Act of 2010. A project that does not involve the expansion of a small business
concern may include the refinancing of qualified debt if (I) the amount of the financing is not be more than 90% of the concern may include the refinancing of qualified debt if (I) the amount of the financing is not be more than 90% of the
value of the collateral for the financing, except that, if the appraised value of the eligible fixed assets serving as value of the collateral for the financing, except that, if the appraised value of the eligible fixed assets serving as
collateral for the financing is less than the amount equal to 125% of the amount of the financing, the borrower may collateral for the financing is less than the amount equal to 125% of the amount of the financing, the borrower may
provide additional cash or other collateral to eliminate any deficiency; (II) the borrower has been in operation for all of provide additional cash or other collateral to eliminate any deficiency; (II) the borrower has been in operation for all of
the two-year period ending on the date of the loan; and (III) for a financing for which the Administrator determines the two-year period ending on the date of the loan; and (III) for a financing for which the Administrator determines
there will be an additional cost attributable to the refinancing of the qualified debt, the borrower agrees to pay a fee in there will be an additional cost attributable to the refinancing of the qualified debt, the borrower agrees to pay a fee in
an amount equal to the anticipated additional cost. an amount equal to the anticipated additional cost.
78 P.L. 114-113, the Consolidated Appropriations Act, 2016. For additional information and analysis, see CRS Report 78 P.L. 114-113, the Consolidated Appropriations Act, 2016. For additional information and analysis, see CRS Report
R41184, R41184, Sm all Business Adm inistration 504/CDC Loan Guaranty Program , by Robert Jay Dilger. , by Robert Jay Dilger.
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~~This limitation may be waived if the SBA determines that the refinance loan is needed for good~~
~~cause.~~
~~Commercial loans eligible for the 504/CDC Refinancing program being used to finance long-term~~
~~fixed asset debt cannot have a loan-to-value (LTV) ratio of more than 90% of the fair market~~
~~value of the eligible fixed asset(s) serving as collateral. Loans that are used to partly refinance~~
~~eligible business operating expenses (e.g., salaries, rent, utilities) cannot exceed an LTV ratio of~~
~~more than 85% of the fair market value of the collateral. The fees associated with the 504/CDC~~
~~Refinancing program are the same as the 504/CDC Loan Guaranty program except the ongoing~~
~~guaranty servicing fee may vary. In FY2020, the annual guaranty servicing fee is 0.3205% for~~
~~regular 504/CDC loans and 0.322% for 504/CDC debt refinance loans.~~
~~In FY2019, the SBA approved 166 refinancing loans totaling $154.8 mil ion.79~~79 SBA, Office of Congressional and Legislative Affairs, “ WDS Report Amount and Count Summary, September 30, 2019: DRAFT T able 2.7. Approvals by Program and Cohort,” October 18, 2018. For historical data, see T able 3 in Congressional Research Service 21 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options
The Microloan Program80
The Microloan program provides direct loans to qualified nonprofit intermediary Microloan The Microloan program provides direct loans to qualified nonprofit intermediary Microloan
lenders that, in turn, provide “microloans” of up to $50,000 to smal businesses and nonprofit lenders that, in turn, provide “microloans” of up to $50,000 to smal businesses and nonprofit
child care centers. Microloan lenders also provide marketing, management, and technical child care centers. Microloan lenders also provide marketing, management, and technical
assistance to Microloan borrowers and potential borrowers. assistance to Microloan borrowers and potential borrowers.
The program was authorized in 1991 as a five-year demonstration project and became operational The program was authorized in 1991 as a five-year demonstration project and became operational
in 1992. It was made permanent, subject to reauthorization, by P.L. 105-135, the Smal Business in 1992. It was made permanent, subject to reauthorization, by P.L. 105-135, the Smal Business
Reauthorization Act of 1997. Although the program is open to al smal businesses, it targets new Reauthorization Act of 1997. Although the program is open to al smal businesses, it targets new
and early stage businesses in underserved markets, including borrowers with little to no credit and early stage businesses in underserved markets, including borrowers with little to no credit
history, low-income borrowers, and women and minority entrepreneurs in both rural and urban history, low-income borrowers, and women and minority entrepreneurs in both rural and urban
areas who general y do not qualify for conventional loans or other, larger SBA guaranteed loans. areas who general y do not qualify for conventional loans or other, larger SBA guaranteed loans.
Microloans can be used for working capital and acquisition of materials, supplies, furniture, Microloans can be used for working capital and acquisition of materials, supplies, furniture,
fixtures, and equipment. Loans cannot be made to acquire land or property. Loan terms are up to fixtures, and equipment. Loans cannot be made to acquire land or property. Loan terms are up to
seven years. seven years.
The SBA charges intermediaries an interest rate that is based on the five-year Treasury rate, The SBA charges intermediaries an interest rate that is based on the five-year Treasury rate,
adjusted to the nearest one-eighth percent (cal ed the Base Rate), less 1.25% if the intermediary adjusted to the nearest one-eighth percent (cal ed the Base Rate), less 1.25% if the intermediary
maintains a historic portfolio of Microloans averaging more than $10,000 and less 2.0% if the maintains a historic portfolio of Microloans averaging more than $10,000 and less 2.0% if the
intermediary maintains a historic portfolio of Microloans averaging $10,000 or less. The Base intermediary maintains a historic portfolio of Microloans averaging $10,000 or less. The Base
Rate, after adjustment, is cal ed the Intermediary’s Cost of Funds. The Intermediary’s Cost of Rate, after adjustment, is cal ed the Intermediary’s Cost of Funds. The Intermediary’s Cost of
Funds is initial y calculated one year from the date of the note and is reviewed annual y and Funds is initial y calculated one year from the date of the note and is reviewed annual y and
adjusted as necessary (cal ed recasting). The interest rate cannot be less than zero. adjusted as necessary (cal ed recasting). The interest rate cannot be less than zero.
On loans of more than $10,000, the maximum interest rate that can be charged to the borrower is On loans of more than $10,000, the maximum interest rate that can be charged to the borrower is
the interest rate charged by the SBA on the loan to the intermediary, plus 7.75%. On loans of the interest rate charged by the SBA on the loan to the intermediary, plus 7.75%. On loans of
$10,000 or less, the maximum interest rate that can be charged to the borrower is the interest $10,000 or less, the maximum interest rate that can be charged to the borrower is the interest
charged by the SBA on the loan to the intermediary, plus 8.5%. Rates are negotiated between the charged by the SBA on the loan to the intermediary, plus 8.5%. Rates are negotiated between the
borrower and the intermediary and typically range from 6% to 9%. borrower and the intermediary and typically range from 6% to 9%.

~~79 SBA, Office of Congressional and Legislative Affairs, “ WDS Report Amount and Count Summary, September 30,~~
~~2019: DRAFT T able 2.7. Approvals by Program and Cohort,” October 18, 2018. For historical data, see T able 3 in~~
~~CRS Report R41184, Sm all Business Adm inistration 504/CDC Loan Guaranty Program , by Robert Jay Dilger.~~
~~80 For further information and analysis, see CRS Report R41057, Small Business Administration Microloan Program ,~~
~~by Robert Jay Dilger.~~
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The SBA does not charge intermediaries up-front or ongoing service fees under the Microloan The SBA does not charge intermediaries up-front or ongoing service fees under the Microloan
program. program.
In FY2020, 5,890 smal businesses received a Microloan, totaling $85.0 mil ion.81 The average In FY2020, 5,890 smal businesses received a Microloan, totaling $85.0 mil ion.81 The average
Microloan was $14,434 and the average interest rate was 6.5%.82 Microloan was $14,434 and the average interest rate was 6.5%.82
SBA Loan Enhancements to Address the Great Recession
Many of the proposals under consideration to address the capital needs of smal businesses Many of the proposals under consideration to address the capital needs of smal businesses
adversely affected by the COVID-19 pandemic were used to address the severe economic adversely affected by the COVID-19 pandemic were used to address the severe economic
slowdown during and immediately following the Great Recession (2007-2009). The main slowdown during and immediately following the Great Recession (2007-2009). The main
difference is that given the unique nature of the COVID-19 pandemic’s impact on households, difference is that given the unique nature of the COVID-19 pandemic’s impact on households,
especial y physical distancing and the resulting decrease in consumer spending, there is an added especial y physical distancing and the resulting decrease in consumer spending, there is an added
CRS Report R41184, Sm all Business Adm inistration 504/CDC Loan Guaranty Program , by Robert Jay Dilger. 80 For further information and analysis, see CRS Report R41057, Small Business Administration Microloan Program , by Robert Jay Dilger. 81 SBA, “Nationwide Microloan Report, October 1, 2019 through September 30, 2020,” November 18, 2020 . 82 SBA, “Nationwide Microloan Report, October 1, 2019 through September 30, 2020,” November 18, 2020. Congressional Research Service 22 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options emphasis today on SBA loan deferrals, loan forgiveness, and expanded eligibility, including, for emphasis today on SBA loan deferrals, loan forgiveness, and expanded eligibility, including, for
the first time, specified types of nonprofit organizations. the first time, specified types of nonprofit organizations.
During the 111th Congress, P.L. 111-5, the American Recovery and Reinvestment Act of 2009 During the 111th Congress, P.L. 111-5, the American Recovery and Reinvestment Act of 2009
(ARRA), provided the SBA an additional $730 mil ion, including $375 mil ion to temporarily (ARRA), provided the SBA an additional $730 mil ion, including $375 mil ion to temporarily
subsidize the 7(a) and 504/CDC loan guaranty programs’ fees ($299 mil ion) and to temporarily subsidize the 7(a) and 504/CDC loan guaranty programs’ fees ($299 mil ion) and to temporarily
increase the 7(a) program’s maximum loan guaranty percentage to 90% ($76 mil ion).83 ARRA increase the 7(a) program’s maximum loan guaranty percentage to 90% ($76 mil ion).83 ARRA
also included provisions designed to increase the amount of leverage issued under the SBA’s also included provisions designed to increase the amount of leverage issued under the SBA’s
Smal Business Investment Company (SBIC venture capital) program.84 SBICs provide loans and Smal Business Investment Company (SBIC venture capital) program.84 SBICs provide loans and
equity investments in smal businesses. equity investments in smal businesses.
ARRA’s funding for the fee subsidies and 90% maximum loan guaranty percentage was about to ARRA’s funding for the fee subsidies and 90% maximum loan guaranty percentage was about to
be exhausted in November 2009, when Congress passed the first of six laws to provide additional be exhausted in November 2009, when Congress passed the first of six laws to provide additional
funding to extend the loan subsidies and 90% maximum loan guaranty percentage. funding to extend the loan subsidies and 90% maximum loan guaranty percentage.
 P.L. 111-118, the Department of Defense Appropriations Act, 2010, provided the  P.L. 111-118, the Department of Defense Appropriations Act, 2010, provided the
SBA $125 mil ion to continue the fee subsidies and 90% maximum loan guaranty SBA $125 mil ion to continue the fee subsidies and 90% maximum loan guaranty
percentage through February 28, 2010. percentage through February 28, 2010.
 P.L. 111-144, the Temporary Extension Act of 2010, provided the SBA $60  P.L. 111-144, the Temporary Extension Act of 2010, provided the SBA $60
mil ion to continue the fee subsidies and 90% maximum loan guaranty mil ion to continue the fee subsidies and 90% maximum loan guaranty
percentage through March 28, 2010. percentage through March 28, 2010.
 P.L. 111-150, an act to extend the Smal Business Loan Guarantee Program, and  P.L. 111-150, an act to extend the Smal Business Loan Guarantee Program, and
for other purposes, provided the SBA authority to reprogram $40 mil ion in for other purposes, provided the SBA authority to reprogram $40 mil ion in
previously appropriated funds to continue the fee subsidies and 90% maximum previously appropriated funds to continue the fee subsidies and 90% maximum
loan guaranty percentage through April 30, 2010. loan guaranty percentage through April 30, 2010.
 P.L. 111-157, the Continuing Extension Act of 2010, provided the SBA $80  P.L. 111-157, the Continuing Extension Act of 2010, provided the SBA $80
mil ion to continue the SBA’s fee subsidies and 90% maximum loan guaranty mil ion to continue the SBA’s fee subsidies and 90% maximum loan guaranty
percentage through May 31, 2010. percentage through May 31, 2010.
 P.L. 111-240, the Smal Business Jobs Act of 2010, provided $505 mil ion (plus  P.L. 111-240, the Smal Business Jobs Act of 2010, provided $505 mil ion (plus
an additional $5 mil ion for administrative expenses) to continue the SBA’s fee an additional $5 mil ion for administrative expenses) to continue the SBA’s fee

~~81 SBA, “Nationwide Microloan Report, October 1, 2019 through September 30, 2020,” November 18, 2020 .~~
~~82 SBA, “Nationwide Microloan Report, October 1, 2019 through September 30, 2020,” November 18, 2020.~~
~~83 SBA, “Recovery Act Agency Plan,” May 15, 2009, at https://www.sba.gov/sites/default/files/recovery_act_reports/~~
~~sba_recovery_act_plan.pdf.~~
~~84 For additional information and analysis, see CRS Report R41456,~~ ~~SBA Small Business Investment Company~~
~~Program~~ ~~, by Robert Jay Dilger.~~
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subsidies and 90% maximum loan guaranty percentage from the act’s date of subsidies and 90% maximum loan guaranty percentage from the act’s date of
enactment (September 27, 2010) through December 31, 2010. enactment (September 27, 2010) through December 31, 2010.
 P.L. 111-322, the Continuing Appropriations and Surface Transportation  P.L. 111-322, the Continuing Appropriations and Surface Transportation
Extensions Act, 2011, authorized the SBA to use funds provided under the Smal Extensions Act, 2011, authorized the SBA to use funds provided under the Smal
Business Jobs Act of 2010 to continue the SBA’s fee subsidies and 90% Business Jobs Act of 2010 to continue the SBA’s fee subsidies and 90%
maximum loan guaranty percentage through March 4, 2011, or until available maximum loan guaranty percentage through March 4, 2011, or until available
funding is exhausted. funding is exhausted.
On January 3, 2011, the SBA announced that the fee subsidies and 90% maximum guarantee On January 3, 2011, the SBA announced that the fee subsidies and 90% maximum guarantee
percentage ended because funding for these enhancements had been exhausted.85 percentage ended because funding for these enhancements had been exhausted.85
In addition to providing additional funding for fee subsidies, P.L. 111-240, among other In addition to providing additional funding for fee subsidies, P.L. 111-240, among other
provisions provisions, 83 SBA, “Recovery Act Agency Plan,” May 15, 2009, at https://www.sba.gov/sites/default/files/recovery_act_reports/sba_recovery_act_plan.pdf. 84 For additional information and analysis, see CRS Report R41456, SBA Small Business Investment Company Program , by Robert Jay Dilger. 85 SBA, “Jobs Act Supported More T han $12 Billion in SBA Lending to Small Businesses in Just T hree Months,” January 3, 2011, at https://www.sba.gov/content/jobs-act-supported-more-12-billion-sba-lending-small-businesses-just-three-months. Congressional Research Service 23 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options
 increased the 7(a) program’s gross loan limit from $2 mil ion to $5 mil ion;  increased the 7(a) program’s gross loan limit from $2 mil ion to $5 mil ion;
 increased the 504/CDC Program’s loan limits from $1.5 mil ion to $5 mil ion for  increased the 504/CDC Program’s loan limits from $1.5 mil ion to $5 mil ion for
“regular” borrowers, from $2 mil ion to $5 mil ion if the loan proceeds are “regular” borrowers, from $2 mil ion to $5 mil ion if the loan proceeds are
directed toward one or more specified public policy goals, and from $4 mil ion to directed toward one or more specified public policy goals, and from $4 mil ion to
$5.5 mil ion for manufacturers; $5.5 mil ion for manufacturers;
 temporarily expanded for two years the eligibility for low-interest refinancing  temporarily expanded for two years the eligibility for low-interest refinancing
under the SBA’s 504/CDC program for qualified debt; under the SBA’s 504/CDC program for qualified debt;
 temporarily increased for one year the SBAExpress Program’s loan limit from  temporarily increased for one year the SBAExpress Program’s loan limit from
$350,000 to $1 mil ion (expired on September 26, 2011); $350,000 to $1 mil ion (expired on September 26, 2011);
 increased the Microloan Program’s loan limit for borrowers from $35,000 to  increased the Microloan Program’s loan limit for borrowers from $35,000 to
$50,000; and increased the loan limits for Microloan intermediaries after their $50,000; and increased the loan limits for Microloan intermediaries after their
first year in the program from $3.5 mil ion to $5 mil ion; first year in the program from $3.5 mil ion to $5 mil ion;
 authorized the U.S. Treasury to make up to $30 bil ion of capital investments for  authorized the U.S. Treasury to make up to $30 bil ion of capital investments for
a Smal Business Lending Fund ($4 bil ion was issued);86 a Smal Business Lending Fund ($4 bil ion was issued);86
 authorized to be appropriated $1.5 bil ion for the State Smal Business Credit  authorized to be appropriated $1.5 bil ion for the State Smal Business Credit
Initiative Program;87 Initiative Program;87
 authorized a three-year Intermediary Lending Pilot Program to al ow the SBA to  authorized a three-year Intermediary Lending Pilot Program to al ow the SBA to
make direct loans to not more than 20 eligible nonprofit lending intermediaries make direct loans to not more than 20 eligible nonprofit lending intermediaries
each year totaling not more than $20 mil ion. The intermediaries, in turn, would each year totaling not more than $20 mil ion. The intermediaries, in turn, would
be al owed to make loans to new or growing smal businesses, not to exceed be al owed to make loans to new or growing smal businesses, not to exceed
$200,000 per business; $200,000 per business;

~~85 SBA, “Jobs Act Supported More T han $12 Billion in SBA Lending to Small Businesses in Just T hree Months,”~~
~~January 3, 2011, at https://www.sba.gov/content/jobs-act-supported-more-12-billion-sba-lending-small-businesses-just-~~
~~three-months.~~
 established an alternative size standard for the 7(a) and 504/CDC loan programs to enable more smal businesses to qualify for assistance;88 and  provided smal businesses with about $12 bil ion in tax relief.89 There were also efforts during the 111th and 112th Congresses to require the SBA to reinstate direct lending to smal businesses. 86 For additional information and analysis, see CRS Report R42045, 86 For additional information and analysis, see CRS Report R42045, The Small Business Lending Fund, by Robert Jay , by Robert Jay
Dilger. Dilger.
87 For additional information and analysis, see CRS Report R42581, 87 For additional information and analysis, see CRS Report R42581, State Small Business Credit Initiative:
Im plem entation and Funding Issues, by Robert Jay Dilger. , by Robert Jay Dilger.
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~~ established an~~88 P.L. 111-240, the Small Business Jobs Act of 2010, established the following interim alternative size standard for alternative size standard for both the 7(a) and 504/CDC programs: the busin ess qualifies as small if it does not have a tangible net worth in excess of $15 million and does not have an average net income after federal taxes (excluding any carry -over losses) in excess of $5 million for two full fiscal years before the date of application. 89 P.L. 111-240 raised the exclusion of gains on the sale or exchange of qualified small business stock from the federal income tax to 100%, with the full exclusion applying only to stock acquired the day after the date of enactment through the end of 2010; increased the deduction for qualified start -up expenditures from $5,000 to $10,000 in 2010, and raised the phaseout threshold from $50,000 to $60,000 for 2010; placed limitations on the penalty for failure to disclose reportable transactions based on resulting tax benefits; allowed general business credits of eligible small businesses for 2010 to be carried back five years; exempted general business credits of eligible small businesses in 2010 from the alternative minimum tax; allowed a temporary reduction in the recogn ition period for built -in gains tax; increased expensing limitations for 2010 and 2011 and allowed certain real property to be treated as Section 179 property; allowed additional first -year depreciation for 50% of the basis of certain qualified property; and removed cellular telephones and similar telecommunications equipment from listed property so their cost can be deducted or depreciated like other business property. Congressional Research Service 24 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options ~~the 7(a) and 504/CDC loan programs~~
~~to enable more smal businesses to qualify for assistance;88 and~~
~~ provided smal businesses with about $12 bil ion in tax relief.89~~
~~There were also efforts during the 111th and 112th Congresses to require the SBA to reinstate~~
~~direct lending to smal businesses.~~
During the 111th Congress During the 111th Congress
 H.R. 3854, the Smal Business Financing and Investment Act of 2009, was  H.R. 3854, the Smal Business Financing and Investment Act of 2009, was
passed by the House on October 29, 2009, by a vote of 389-32. It would have passed by the House on October 29, 2009, by a vote of 389-32. It would have
authorized a temporary SBA direct lending program.90 authorized a temporary SBA direct lending program.90
During the 112th Congress During the 112th Congress
 H.R. 3007, the Give Credit to Main Street Act of 2011, introduced on September  H.R. 3007, the Give Credit to Main Street Act of 2011, introduced on September
21, 2011, and referred to the House Committee on Smal Business, would have 21, 2011, and referred to the House Committee on Smal Business, would have
authorized the SBA to provide direct loans to smal businesses that have been in authorized the SBA to provide direct loans to smal businesses that have been in
operation as a smal business for at least two years prior to its application for a operation as a smal business for at least two years prior to its application for a
direct loan. The maximum loan amount would have been the lesser of 10% of the direct loan. The maximum loan amount would have been the lesser of 10% of the
firm’s annual revenues or $500,000. firm’s annual revenues or $500,000.
 H.R. 5835, the Veterans Access to Capital Act of 2012, introduced on May 18,  H.R. 5835, the Veterans Access to Capital Act of 2012, introduced on May 18,
2012, and referred to the House Committee on Smal Business, would have 2012, and referred to the House Committee on Smal Business, would have
authorized the SBA to provide up to 20% of the annual amount available for authorized the SBA to provide up to 20% of the annual amount available for
guaranteed loans under the 7(a) and 504/CDC loan guaranty programs, guaranteed loans under the 7(a) and 504/CDC loan guaranty programs,
respectively, in direct loans to veteran-owned and -controlled smal businesses. respectively, in direct loans to veteran-owned and -controlled smal businesses.
Current Issues, Debates, and Lessons Learned
During the 111th Congress (2009-2010), there was a consensus in Congress that the federal During the 111th Congress (2009-2010), there was a consensus in Congress that the federal
government had to take decisive action to address the capital needs of smal businesses, primarily government had to take decisive action to address the capital needs of smal businesses, primarily
as a means to promote job retention and creation. Similar sentiments are being expressed today as as a means to promote job retention and creation. Similar sentiments are being expressed today as
Congress considers proposals to assist smal businesses adversely affected by the COVID-19 Congress considers proposals to assist smal businesses adversely affected by the COVID-19
pandemic. pandemic.
Many Members of Congress argued during the 111th Congress that the SBA should be provided Many Members of Congress argued during the 111th Congress that the SBA should be provided
additional resources to assist smal businesses in acquiring capital necessary to start, continue, or additional resources to assist smal businesses in acquiring capital necessary to start, continue, or

~~88 P.L. 111-240, the Small Business Jobs Act of 2010, established the following interim alternative size standard for~~
~~both the 7(a) and 504/CDC programs: the business qualifies as small if it does not have a tangible net worth in excess~~
~~of $15 million and does not have an average net income after federal taxes (excluding any carry -over losses) in excess~~
~~of $5 million for two full fiscal years before the date of application.~~
~~89 P.L. 111-240 raised the exclusion of gains on the sale or exchange of qualified small business stock from the federal~~
~~income tax to 100%, with the full exclusion applying only to stock acquired the day after the date of enactment through~~
~~the end of 2010; increased the deduction for qualified start -up expenditures from $5,000 to $10,000 in 2010, and raised~~
~~the phaseout threshold from $50,000 to $60,000 for 2010; placed limitations on the penalty for failure to disclose~~
~~reportable transactions based on resulting tax benefits; allowed general business credits of eligible small businesses for~~
~~2010 to be carried back five years; exempted general business credits of eligible small businesses in 2010 from the~~
~~alternative minimum tax; allowed a temporary reduction in the recognition period for built -in gains tax; increased~~
~~expensing limitations for 2010 and 2011 and allowed certain real property to be treated as Section 179 property;~~
~~allowed additional first -year depreciation for 50% of the basis of certain qualified property; and removed cellular~~
~~telephones and similar telecommunications equipment from listed property so their cost can be deducted or depreciated~~
~~like ot her business property.~~
~~90 H.R. 3854, the Small Business Financing and Investment Act of 2009 (111th Congress), §111. Capital Backstop~~
~~Program.~~
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expand operations with the expectation that in so doing small businesses wil create jobs. Others expand operations with the expectation that in so doing small businesses wil create jobs. Others
worried about the long-term adverse economic effects of spending programs that increase the worried about the long-term adverse economic effects of spending programs that increase the
federal deficit. They advocated business tax reduction, reform of financial credit market federal deficit. They advocated business tax reduction, reform of financial credit market
regulation, and federal fiscal restraint as the best means to help smal businesses further economic regulation, and federal fiscal restraint as the best means to help smal businesses further economic
growth and job creation. growth and job creation.
Given the coronavirus’s widespread adverse economic impact, including productivity losses, Given the coronavirus’s widespread adverse economic impact, including productivity losses,
supply chain disruptions, labor dislocation, and financial pressure on businesses and households, supply chain disruptions, labor dislocation, and financial pressure on businesses and households,
there has been relatively little concern expressed about federal fiscal restraint during the current there has been relatively little concern expressed about federal fiscal restraint during the current
pandemic. The debate has been primarily over which specific policies would have the greatest pandemic. The debate has been primarily over which specific policies would have the greatest
impact and which types of smal businesses and smal business owners should be helped the most. impact and which types of smal businesses and smal business owners should be helped the most.
As mentioned, many of the enhancements to the SBA’s capital access programs that were made As mentioned, many of the enhancements to the SBA’s capital access programs that were made
during the 111th Congress, such as increasing loan limits, providing fee subsidies, increasing loan during the 111th Congress, such as increasing loan limits, providing fee subsidies, increasing loan
guaranty percentages, and expanding eligibility criteria are being considered again. These guaranty percentages, and expanding eligibility criteria are being considered again. These
changes had a demonstrated impact on smal business lending during and immediately following changes had a demonstrated impact on smal business lending during and immediately following
the Great Recession. SBA lending increased. For example, the SBA’s OIG found that SBA 7(a) the Great Recession. SBA lending increased. For example, the SBA’s OIG found that SBA 7(a)
loan approvals increased 39% and 504/CDC loan approval increased 73% from March to July loan approvals increased 39% and 504/CDC loan approval increased 73% from March to July
2009, largely due to ARRA’s fee reductions and increased loan guarantee percentages. Lending 2009, largely due to ARRA’s fee reductions and increased loan guarantee percentages. Lending
90 H.R. 3854, the Small Business Financing and Investment Act of 2009 (111th Congress), §111. Capital Backstop Program. Congressional Research Service 25 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options volume remained below pre-recession levels, but was much higher than before the fee reductions volume remained below pre-recession levels, but was much higher than before the fee reductions
and increase in the loan guarantee percentage were implemented. and increase in the loan guarantee percentage were implemented.
The OIG also noted that the increased loan volume “may be impacting Agency staffing The OIG also noted that the increased loan volume “may be impacting Agency staffing
requirements and program risk... Without adequate training and supervision, the increased requirements and program risk... Without adequate training and supervision, the increased
demands on loan center staff could impact the quality of Agency loan reviews.”91 demands on loan center staff could impact the quality of Agency loan reviews.”91
Also, in 2012, the SBA issued a press release lauding P.L. 111-240’s impact on SBA loan volume: Also, in 2012, the SBA issued a press release lauding P.L. 111-240’s impact on SBA loan volume:
With loan volume steadily increasing for the past six quarters, the U.S. Small Business With loan volume steadily increasing for the past six quarters, the U.S. Small Business
Administration’s loan programs posted the second largest dollar volume ever in FY 2012, Administration’s loan programs posted the second largest dollar volume ever in FY 2012,
supporting $30.25 billion in loans to small businesses. That amount was surpassed only by supporting $30.25 billion in loans to small businesses. That amount was surpassed only by
FY 2011, which was heavily boosted by the loan incentives under the Small Business Jobs FY 2011, which was heavily boosted by the loan incentives under the Small Business Jobs
Act of 2010.92 Act of 2010.92
The data demonstrate that ARRA and the Smal Business Jobs Act of 2010 helped smal The data demonstrate that ARRA and the Smal Business Jobs Act of 2010 helped smal
businesses access capital. However, because the SBA primarily gathers data on program output businesses access capital. However, because the SBA primarily gathers data on program output
(e.g., loan volume, number of smal businesses served, default rates) as opposed to program (e.g., loan volume, number of smal businesses served, default rates) as opposed to program
outcomes (e.g., smal business solvency, job creation, wealth generation) it is difficult to knowoutcomes (e.g., smal business solvency, job creation, wealth generation) it is difficult to know
how effective these programs were in assisting smal businesses or if other approaches might how effective these programs were in assisting smal businesses or if other approaches might
have produced better (or different) results. have produced better (or different) results.
Among the lessons learned from earlier smal business stimulus packages is that additional Among the lessons learned from earlier smal business stimulus packages is that additional
funding for the SBA OIG to conduct oversight of the SBA’s implementation of stimulus changes funding for the SBA OIG to conduct oversight of the SBA’s implementation of stimulus changes
could help Congress in its oversight responsibilities. Additional funding for the SBA OIG to could help Congress in its oversight responsibilities. Additional funding for the SBA OIG to
conduct investigations of potential y fraudulent behaviors by borrowers and lenders could also conduct investigations of potential y fraudulent behaviors by borrowers and lenders could also
prove useful in deterring fraud, waste, and abuse.93 In addition, requiring the SBA to periodical y prove useful in deterring fraud, waste, and abuse.93 In addition, requiring the SBA to periodical y

report to Congress and on its website both output and outcome performance data could help Congress in its oversight responsibilities and assure the public that the taxpayer’s dollars are being spent both efficiently and effectively. SBA Entrepreneurial Development Programs94 Overview The SBA has provided technical and managerial assistance to smal businesses since it began operations in 1953. Initial y, the SBA provided its own smal business management and technical 91 SBA, Office of Inspector General (OIG), 91 SBA, Office of Inspector General (OIG), Review of the Recovery Act’s Impact on SBA Lending, ROM 10-02, , ROM 10-02,
November 25, 2009, p. 4, at https://www.sba.gov/document/report -rom-10-02-rom-10-02-review-recovery-acts-impact-November 25, 2009, p. 4, at https://www.sba.gov/document/report -rom-10-02-rom-10-02-review-recovery-acts-impact-
sba-lending. sba-lending.
92 SBA, “ SBA Loan Dollars in FY 2012 Reach Second Largest T otal Ever; $30.25 Billion Second Only to FY 2011 ,” 92 SBA, “ SBA Loan Dollars in FY 2012 Reach Second Largest T otal Ever; $30.25 Billion Second Only to FY 2011 ,”
October 9, 2012, at https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-loan-dollars-fy-October 9, 2012, at https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-loan-dollars-fy-
2012-reach-second-largest-total-ever-3025-billion-second-only-fy-2011. 2012-reach-second-largest-total-ever-3025-billion-second-only-fy-2011.
93 P.L. 116-136, the CARES Act, provided the SBA’s OIG $25 million in additional funding for its oversight93 P.L. 116-136, the CARES Act, provided the SBA’s OIG $25 million in additional funding for its oversight activities. On April 3, 2020, the SBA’s OIG issued its first CARES Act -related report, “ White Paper: Risk Awareness and Lessons Learned from Prior Audits of Economic Stimulus Loans.” For a list of the SBA OIG’s oversight reports on SBA’s credit and capital programs, including COVID-19-related relief programs, see https://www.sba.gov/document?sortBy=Effective%20Date&search=&documentType=Report&program=Credit/Capital&documentActivity=Audit/evaluation&office=7392&page=1. 94 For additional information and analysis, see CRS Report R41352, Small Business Management and Technical Assistance Training Program s, by Robert Jay Dilger. Congressional Research Service 26 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options ~~activities.~~
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~~COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options~~

~~report to Congress and on its website both output and outcome performance data could help~~
~~Congress in its oversight responsibilities and assure the public that the taxpayer’s dollars are~~
~~being spent both efficiently and effectively.~~
~~SBA Entrepreneurial Development Programs94~~
~~Overview~~
~~The SBA has provided technical and managerial assistance to smal businesses since it began~~
~~operations in 1953. Initial y, the SBA provided its own smal business management and technical~~
assistance training programs. Over time, the SBA has relied increasingly on third parties to assistance training programs. Over time, the SBA has relied increasingly on third parties to
provide that training. provide that training.
Congressional interest in the SBA’s management and technical assistance training programs has Congressional interest in the SBA’s management and technical assistance training programs has
increased in recent years, primarily because these programs are viewed as a means to assist smal increased in recent years, primarily because these programs are viewed as a means to assist smal
businesses create and retain jobs. These programs received $239 mil ion in FY2020 and FY2021 businesses create and retain jobs. These programs received $239 mil ion in FY2020 and FY2021
under the Continuing Appropriations Act (funding through December 11, 2020). These funds under the Continuing Appropriations Act (funding through December 11, 2020). These funds
supported about 14,000 resource partners, including 63 lead smal business development centers supported about 14,000 resource partners, including 63 lead smal business development centers
(SBDCs) and nearly 900 SBDC local outreach locations, over 200 women’s business centers (SBDCs) and nearly 900 SBDC local outreach locations, over 200 women’s business centers
(WBCs), and more than 250 chapters of the mentoring program, SCORE.95 (WBCs), and more than 250 chapters of the mentoring program, SCORE.95
The SBA reports that nearly a mil ion aspiring entrepreneurs and smal business owners receive The SBA reports that nearly a mil ion aspiring entrepreneurs and smal business owners receive
mentoring and training from an SBA-supported resource partner each year. Most of this training mentoring and training from an SBA-supported resource partner each year. Most of this training
is free, and some is offered at low cost.96 is free, and some is offered at low cost.96
The Department of Commerce also provides management and technical assistance training for The Department of Commerce also provides management and technical assistance training for
smal businesses. For example, its Minority Business Development Agency provides training to smal businesses. For example, its Minority Business Development Agency provides training to
minority business owners to assist them in obtaining contracts and financial awards. minority business owners to assist them in obtaining contracts and financial awards.
Small Business Development Centers
SBDCs provide free or low-cost assistance to smal businesses using programs customized to SBDCs provide free or low-cost assistance to smal businesses using programs customized to
local conditions. SBDCs support smal businesses in marketing and business strategy, finance, local conditions. SBDCs support smal businesses in marketing and business strategy, finance,
technology transfer, government contracting, management, manufacturing, engineering, sales, technology transfer, government contracting, management, manufacturing, engineering, sales,
accounting, exporting, and other topics. SBDCs are funded by SBA grants and matching funds accounting, exporting, and other topics. SBDCs are funded by SBA grants and matching funds
equal to the grant amount. equal to the grant amount.

~~On April 3, 2020, the SBA’s OIG issued its first CARES Act -related report, “ White Paper: Risk Awareness and~~
~~Lessons Learned from Prior Audits of Economic Stimulus Loans.” For a list of the SBA OIG’s oversight reports on~~
~~SBA’s credit and capital programs, including COVID-19-related relief programs, see https://www.sba.gov/document?~~
~~sortBy=Effective%20Date&search=&documentType=Report&program=Credit/Capital&documentActivity=Audit/~~
~~evaluation&office=7392&page=1.~~
~~94 For additional information and analysis, see CRS Report R41352,~~ ~~Small Business Management and Technical~~
~~Assistance Training Program s, by Robert Jay Dilger.~~
~~95 Other SBA entrepreneurial development programs include the following: the Microloan T echnical Assistance~~
~~Program; the Program for Investment in Microentrepreneurs (PRIME), Veterans Programs (including Veterans~~
~~Business Outreach Centers, Boots to Business, Veteran Women Igniting the Spirit of Entrepreneurship [VWISE],~~
~~Entrepreneurship Bootcamp for Veterans with Disabilities, and Boots to Business: Re boot), the Native American~~
~~Outreach Program, the Entrepreneurial Development Initiative (Regional Innovation Clusters), the Entrepreneurship~~
~~Education Initiative, t he Growth Accelerators Initiative, and the 7(j) T echnical Assistance Program.~~
~~96 SBA, FY2021 Congressional Budget Justification and FY2019 Annual Performance Report, p. 18.~~
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SBDC funding is al ocated on a pro rata basis among the states (including the District of SBDC funding is al ocated on a pro rata basis among the states (including the District of
Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, and American Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, and American
Samoa) by a statutory formula “based on the percentage of the population of each State, as Samoa) by a statutory formula “based on the percentage of the population of each State, as
compared to the population of the United States.”97 If, as is currently the case, SBDC funding compared to the population of the United States.”97 If, as is currently the case, SBDC funding
exceeds $90 mil ion, the minimum funding level is “the sum of $500,000, plus a percentage of exceeds $90 mil ion, the minimum funding level is “the sum of $500,000, plus a percentage of
$500,000 equal to the percentage amount by which the amount made available exceeds $90 $500,000 equal to the percentage amount by which the amount made available exceeds $90
mil ion.”98 mil ion.”98
There are 63 lead SBDC service centers, one located in each state (four in Texas and six in There are 63 lead SBDC service centers, one located in each state (four in Texas and six in
California), the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American California), the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American
Samoa. These centers manage more than 900 SBDC outreach locations. Samoa. These centers manage more than 900 SBDC outreach locations. ~~In FY2020 and FY2021,~~
~~under the Continuing Appropriations Act~~ SBDCs were appropriated $135.0 mil ion in FY2020 and in FY2021 under the continuing appropriations act (funding through December (funding through December ~~11, 2020), the SBA was~~
~~provided $135 mil ion for SBDC grants. The SBA also was provided an additional $192 mil ion~~
in 28, 2020). If enacted, H.R. 133, the Consolidated Appropriations Act of 2021, which was passed by the House and Senate on December 21, 2020, would provide 95 Other SBA entrepreneurial development programs include the following: the Microloan T echnical Assistance Program; the Program for Investment in Microentrepreneurs (PRIME), Veterans Programs (including Veterans Business Outreach Centers, Boots to Business, Veteran Women Igniting the Spirit of Entrepreneurship [VWISE], Entrepreneurship Bootcamp for Veterans with Disabilities, and Boots to Business: Reboot), the Native American Outreach Program, the Entrepreneurial Development Initiative (Regional Innovation Clusters), the Entrepreneurship Education Initiative, t he Growth Accelerators Initiative, and the 7(j) T echnical Assistance Program. 96 SBA, FY2021 Congressional Budget Justification and FY2019 Annual Performance Report, p. 18. 97 15 U.S.C. §648(a)(4)(C). 98 15 U.S.C. §648(a)(4)(C) and P.L. 106-554, the Consolidated Appropriations Act, 2001. Congressional Research Service 27 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options SBDCs $136.0 mil ion in FY2021. The SBA also was provided an additional $192 mil ion in supplemental funding for SBDC grants in FY2020 under the CARES Act.99 supplemental funding for SBDC grants in FY2020 under the CARES Act.99
In FY2019, SBDCs provided technical assistance training and counseling services to 254,821 In FY2019, SBDCs provided technical assistance training and counseling services to 254,821
unique SBDC clients, and 17,810 new businesses were started largely as a result of SBDC unique SBDC clients, and 17,810 new businesses were started largely as a result of SBDC
training and counseling.100 training and counseling.100
Microloan Technical Assistance
Congress authorized the SBA’s Microloan lending program in 1991 (P.L. 102-140, the Congress authorized the SBA’s Microloan lending program in 1991 (P.L. 102-140, the
Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations
Act, 1992) to address the perceived disadvantages faced by women, low -income, veteran, and Act, 1992) to address the perceived disadvantages faced by women, low -income, veteran, and
minority entrepreneurs and business owners gaining access to capital to start or expand their minority entrepreneurs and business owners gaining access to capital to start or expand their
business. The program became operational in 1992. Initial y, the SBA’s Microloan program was business. The program became operational in 1992. Initial y, the SBA’s Microloan program was
authorized as a five-year demonstration project. It was made permanent, subject to authorized as a five-year demonstration project. It was made permanent, subject to
reauthorization, by P.L. 105-135, the Smal Business Reauthorization Act of 1997. reauthorization, by P.L. 105-135, the Smal Business Reauthorization Act of 1997.
The SBA’s Microloan Technical Assistance Program is affiliated with the SBA’s Microloan The SBA’s Microloan Technical Assistance Program is affiliated with the SBA’s Microloan
lending program but receives a separate appropriation. This program provides grants to lending program but receives a separate appropriation. This program provides grants to
Microloan intermediaries for management and technical training assistance to Microloan program Microloan intermediaries for management and technical training assistance to Microloan program
borrowers and prospective borrowers.101 There are currently 144 active Microloan intermediaries borrowers and prospective borrowers.101 There are currently 144 active Microloan intermediaries
serving 49 states, the District of Columbia, and Puerto Rico.102 serving 49 states, the District of Columbia, and Puerto Rico.102
Under the Microloan program, intermediaries are eligible to receive a Microloan technical Under the Microloan program, intermediaries are eligible to receive a Microloan technical
assistance grant “of not more than 25% of the total outstanding balance of loans made to it.”103 assistance grant “of not more than 25% of the total outstanding balance of loans made to it.”103
Grant funds may be used only to provide marketing, management, and technical assistance to Grant funds may be used only to provide marketing, management, and technical assistance to
Microloan borrowers, and no more than 50% of the funds may be used to provide such assistance Microloan borrowers, and no more than 50% of the funds may be used to provide such assistance

~~97 15 U.S.C. §648(a)(4)(C).~~
~~98 15 U.S.C. §648(a)(4)(C) and P.L. 106-554, the Consolidated Appropriations Act, 2001.~~
to prospective Microloan borrowers and no more than 50% of the funds may be awarded to third parties to provide that technical assistance. Grant funds also may be used to attend required training.104 In most instances, intermediaries must contribute, solely from nonfederal sources, an amount equal to 25% of the grant amount.105 In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under nonfederal programs.106 The SBA does not require Microloan borrowers to participate in the Microloan Technical Assistance Program. However, intermediaries typical y require Microloan borrowers to participate in the training program as a condition of the receipt of a microloan. Combining loan 99 T he CARES Act also provides $25 million for SBA resource partners, including SBDCs, to establish a centralized 99 T he CARES Act also provides $25 million for SBA resource partners, including SBDCs, to establish a centralized
hub for COVID-19 information, which includes an online platform that consolidates resources and information across hub for COVID-19 information, which includes an online platform that consolidates resources and information across
multiple federal agencies and training program to education resource partner counselors. multiple federal agencies and training program to education resource partner counselors.
100 SBA, 100 SBA, FY2021 Congressional Budget Justification and FY2019 Annual Performance Report, p. 85. , p. 85.
101 For further analysis of the SBA’s Microloan program, see CRS Report R41057, 101 For further analysis of the SBA’s Microloan program, see CRS Report R41057, Small Business Administration
Microloan Program , by Robert Jay Dilger. , by Robert Jay Dilger.
102 SBA, 102 SBA, FY2021 Congressional Budget Justification and FY2019 Annual Performance Report, p. 36. For a list of , p. 36. For a list of
Microloan intermediaries by state, see SBA, “ List of Lenders,” at https://www.sba.gov/partners/lenders/microloan-Microloan intermediaries by state, see SBA, “ List of Lenders,” at https://www.sba.gov/partners/lenders/microloan-
program/list-lenders. program/list-lenders.
103 15 U.S.C. §636(m)(4)(A) 103 15 U.S.C. §636(m)(4)(A). 104 13 C.F.R. §120.712. 105 13 C.F.R. §120.712. 106 13 C.F.R. §120.712. Intermediaries may not borrow their contribution. .
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~~to prospective Microloan borrowers and no more than 50% of the funds may be awarded to third~~
~~parties to provide that technical assistance. Grant funds also may be used to attend required~~
~~training.104~~
~~In most instances, intermediaries must contribute, solely from nonfederal sources, an amount~~
~~equal to 25% of the grant amount.105 In addition to cash or other direct funding, the contribution~~
~~may include indirect costs or in-kind contributions paid for under nonfederal programs.106~~
~~The SBA does not require Microloan borrowers to participate in the Microloan Technical~~
~~Assistance Program. However, intermediaries typical y require Microloan borrowers to~~
~~participate in the training program as a condition of the receipt of a microloan. Combining loan~~
~~and intensive management and technical assistance training is one of the Microloan program’s~~
~~distinguishing features.107~~
~~The SBA was provided $34.5 mil ion for Microloan Technical Assistance grants in FY2020 and~~
~~FY2021 under the Continuing Appropriations Act (funding through December 11, 2020).~~
and intensive management and technical assistance training is one of the Microloan program’s distinguishing features.107 The SBA was provided $34.5 mil ion for Microloan Technical Assistance grants in FY2020 and in FY2021 under the continuing appropriations act (funding through December 28, 2020). If enacted, H.R. 133, the Consolidated Appropriations Act of 2021, which was passed by the House and Senate on December 21, 2020, would provide $85 mil ion for Microloan Technical Assistance grants in FY2021 ($35.0 mil ion in the Consolidated Appropriators Act, 2021 and an additional $50 mil ion in the Economic Aid to Hard-Hit Smal Businesses, Nonprofits, and Venues Act). Women’s Business Centers
The WBC Renewable Grant Program was initial y established by P.L. 100-533, the Women’s The WBC Renewable Grant Program was initial y established by P.L. 100-533, the Women’s
Business Ownership Act of 1988, as the Women’s Business Demonstration Pilot Program, Business Ownership Act of 1988, as the Women’s Business Demonstration Pilot Program,
targeting the needs of social y and economical y disadvantaged women. The act directed the SBA targeting the needs of social y and economical y disadvantaged women. The act directed the SBA
to provide financial assistance to private, nonprofit organizations to conduct demonstration to provide financial assistance to private, nonprofit organizations to conduct demonstration
projects giving financial, management, and marketing assistance to smal businesses, including projects giving financial, management, and marketing assistance to smal businesses, including
start-up businesses, owned and controlled by women. The WBC program was expanded and start-up businesses, owned and controlled by women. The WBC program was expanded and
provided permanent legislative status by P.L. 109-108, the Science, State, Justice, Commerce, and provided permanent legislative status by P.L. 109-108, the Science, State, Justice, Commerce, and
Related Agencies Appropriations Act, 2006. Related Agencies Appropriations Act, 2006.
Since the program’s inception, the SBA has awarded WBCs a grant of up to $150,000 per year. Since the program’s inception, the SBA has awarded WBCs a grant of up to $150,000 per year.
WBC initial grants are currently awarded for up to five years, consisting of a base period of 12 WBC initial grants are currently awarded for up to five years, consisting of a base period of 12
months from the date of the award and four 12-month option periods.108 The SBA determines if months from the date of the award and four 12-month option periods.108 The SBA determines if
the option periods are exercised and makes that determination subject to the continuation of the option periods are exercised and makes that determination subject to the continuation of
program authority, the availability of funds, and the recipient organization’s compliance with program authority, the availability of funds, and the recipient organization’s compliance with
federal law, SBA regulations, and the terms and conditions specified in a cooperative agreement. federal law, SBA regulations, and the terms and conditions specified in a cooperative agreement.

~~104 13 C.F.R. §120.712.~~
~~105 13 C.F.R. §120.712.~~
~~106 13 C.F.R. §120.712. Intermediaries may not borrow their contribution.~~
WBCs that successfully complete the initial five-year grant period may apply for an unlimited number of three-year funding intervals.109 During their initial five-year grant period, WBCs are required to provide a nonfederal match of one nonfederal dollar for each two federal dollars in years one and two (1:2), and one nonfederal dollar for each federal dollar in years three, four, and five (1:1). After the initial five-year grant 107 Intermediaries that make at least 25% of their loans to small businesses located in or owned by residents of an 107 Intermediaries that make at least 25% of their loans to small businesses located in or owned by residents of an
Econom ically Distressed Area (defined as having 40% or more of its residents with an annual income that is at or (defined as having 40% or more of its residents with an annual income that is at or
below the poverty level), or have a portfolio of loans made under the program that averages not more than $10,000 below the poverty level), or have a portfolio of loans made under the program that averages not more than $10,000
during the period of the intermediary’s participation in the program are eligible to receive an additional training grant during the period of the intermediary’s participation in the program are eligible to receive an additional training grant
equal to 5% of the total outstanding balance of loans made to the intermediary. Intermediaries are not required to make equal to 5% of the total outstanding balance of loans made to the intermediary. Intermediaries are not required to make
a matching contribution as a condition of receiving these additional grant funds. See 13 C.F.R. §120.712; and 15 U.S.C. a matching contribution as a condition of receiving these additional grant funds. See 13 C.F.R. §120.712; and 15 U.S.C.
§636(m)(4)(C)(i). §636(m)(4)(C)(i).
108 P.L. 105-135, the Small Business Reauthorization Act of 1997, authorized the SBA to award grants to WBCs for up 108 P.L. 105-135, the Small Business Reauthorization Act of 1997, authorized the SBA to award grants to WBCs for up
to five years—one base year and four option years. P.L. 106-165, the Women’s Business Centers Sustainability Act of to five years—one base year and four option years. P.L. 106-165, the Women’s Business Centers Sustainability Act of
1999, provided WBCs that had completed the initial five-year grant an opportunity to apply for an additional five-year 1999, provided WBCs that had completed the initial five-year grant an opportunity to apply for an additional five-year
sustainability grant. T hus, the act allowed successful WBCs to receive SBA funding for a total of 10 years. Because the sustainability grant. T hus, the act allowed successful WBCs to receive SBA funding for a total of 10 years. Because the
program has permitted permanent three-year funding intervals since 2007, the sustainability grants would be phased out program has permitted permanent three-year funding intervals since 2007, the sustainability grants would be phased out
by FY2012, leaving the initial five-year grants with the continuous three-year option. See SBA, by FY2012, leaving the initial five-year grants with the continuous three-year option. See SBA, FY2012 Congressional
Budget Justification and FY2010 Annual Perform ance Report, p. 49, at https://www.sba.gov/sites/default/files/, p. 49, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/FINAL%20FY%202012%20CBJ%20FY%202010%20APR_0.pdf . aboutsbaarticle/FINAL%20FY%202012%20CBJ%20FY%202010%20APR_0.pdf .
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~~WBCs that successfully complete the initial five-year grant period may~~109 P.L. 110-28, the U.S. T roop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriation s Act, 2007, allowed WBCs that successfully completed the initial five-year grant to apply for an unlimited ~~apply for an unlimited~~
number of number of three-year funding renewals. Congressional Research Service 29 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options ~~three-year funding intervals.109~~
~~During their initial five-year grant period, WBCs are required to provide a nonfederal match of~~
~~one nonfederal dollar for each two federal dollars in years one and two (1:2), and one nonfederal~~
~~dollar for each federal dollar in years three, four, and five (1:1). After the initial five-year grant~~
period, the matching requirement in subsequent three-year funding intervals is not more than 50% period, the matching requirement in subsequent three-year funding intervals is not more than 50%
of federal funding (1:1).110 The nonfederal match may consist of cash, in-kind, and program of federal funding (1:1).110 The nonfederal match may consist of cash, in-kind, and program
income.111 income.111
Today, there are 125 WBCs located throughout most of the United States and the territories.112 In Today, there are 125 WBCs located throughout most of the United States and the territories.112 In
FY2019, WBCs provided technical assistance training and counseling services to 64,527 unique FY2019, WBCs provided technical assistance training and counseling services to 64,527 unique
WBC clients, and 2,087 new businesses were started largely as a result of WBC training and WBC clients, and 2,087 new businesses were started largely as a result of WBC training and
counseling.113 counseling.113
The SBA was provided $22.5 mil ion for WBC grants in FY2020 and The SBA was provided $22.5 mil ion for WBC grants in FY2020 and in FY2021 under the FY2021 under the
~~Continuing Appropriations Act~~continuing appropriations act (funding through December (funding through December 1128, 2020). The SBA also was , 2020). The SBA also was
provided an additionalprovided an additional $48 mil ion in supplemental funding for WBC grants in FY2020 under the $48 mil ion in supplemental funding for WBC grants in FY2020 under the
CARES CARES Act.114 Act.114
SCORE (formerly the Service Corps of Retired Executives)
SCORE was established on October 5, 1964, by then-SBA Administrator Eugene P. Foley as a SCORE was established on October 5, 1964, by then-SBA Administrator Eugene P. Foley as a
national, volunteer organization, uniting more than 50 independent nonprofit organizations into a national, volunteer organization, uniting more than 50 independent nonprofit organizations into a
single, national nonprofit organization. single, national nonprofit organization.
The SBA currently provides grants to SCORE to provide in-person mentoring, online training, The SBA currently provides grants to SCORE to provide in-person mentoring, online training,
and “nearly 9,000 local training workshops annual y” to smal businesses.115 SCORE’s more than and “nearly 9,000 local training workshops annual y” to smal businesses.115 SCORE’s more than
250 chapters are located throughout the United States and partner with more than 10,000 250 chapters are located throughout the United States and partner with more than 10,000
volunteer counselors, who are working or retired business owners, executives and corporate volunteer counselors, who are working or retired business owners, executives and corporate
leaders, to provide management and training assistance to smal businesses “at no charge or at leaders, to provide management and training assistance to smal businesses “at no charge or at
very low cost.”116 very low cost.”116

~~109 P.L. 110-28, the U.S. T roop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations~~
~~Act, 2007, allowed WBCs that successfully completed the initial five-year grant to apply for an unlimited number of~~
~~three-year funding renewals.~~
In FY2019, SCORE provided technical assistance training and counseling services to 195,242 unique SCORE clients, and 480 new businesses were started largely as a result of SCORE training and counseling.117 The SBA was provided $11.7 mil ion for SCORE grants in FY2020 and in FY2021, under the continuing appropriations act (funding through December 28, 2020). Current Issues, Debates, and Lessons Learned Congress provided additional funding for SBA entrepreneurial development programs during and immediately following the Great Recession. For example, ARRA provided an additional $24 110 P.L. 110-28 reduced the federal share to not more than 50% for all grant years (1:1) following the initial five110 P.L. 110-28 reduced the federal share to not more than 50% for all grant years (1:1) following the initial five -year -year
grant. grant.
111 P.L. 105-135 specified that not more than one-half of the nonfederal sector matching assistance may be in the form 111 P.L. 105-135 specified that not more than one-half of the nonfederal sector matching assistance may be in the form
of in-kind contributions that are budget line items only, including office equipment and office space. of in-kind contributions that are budget line items only, including office equipment and office space.
112 SBA, “Women’s Business Centers Directory,” at https://www.sba.gov/tools/local-assistance/wbc. 112 SBA, “Women’s Business Centers Directory,” at https://www.sba.gov/tools/local-assistance/wbc.
113 SBA, 113 SBA, FY2021 Congressional Budget Justification and FY2019 Annual Performance Report, p. 87. , p. 87.
114 T he CARES Act also provides $25 million for SBA resource partners, including WBCs, to establish a centralized 114 T he CARES Act also provides $25 million for SBA resource partners, including WBCs, to establish a centralized
hub for COVID-19 information, which includes an online platform that consolidates resources and information across hub for COVID-19 information, which includes an online platform that consolidates resources and information across
multiple federal agencies and training programs to educat e resource partner counselors. multiple federal agencies and training programs to educat e resource partner counselors.
115 SBA, 115 SBA, FY2013 Congressional Budget Justification and FY2011 Annual Performance Report, p. 45, at , p. 45, at
https://www.sba.gov/sites/default/files/files/1-https://www.sba.gov/sites/default/files/files/1-
508%20Compliant%20FY%202013%20CBJ%20FY%202011%20APR(1).pdf. 508%20Compliant%20FY%202013%20CBJ%20FY%202011%20APR(1).pdf.
116 SCORE (Service Corps of Retired Executives), “About SCORE,” Washington, DC, at https://www.score.org/about- 116 SCORE (Service Corps of Retired Executives), “About SCORE,” Washington, DC, at https://www.score.org/about-
score. score.
117 SBA, FY2021 Congressional Budget Justification and FY2019 Annual Performance Report, p. 89. Congressional Research Service Congressional Research Service
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~~In FY2019, SCORE provided technical assistance training and counseling services to 195,242~~
~~unique SCORE clients, and 480 new businesses were started largely as a result of SCORE~~
~~training and counseling.117~~
~~In FY2020 and FY2021, under the Continuing Appropriations Act (funding through December~~
~~11, 2020), the SBA was provided $11.7 mil ion for SCORE grants.~~
~~Current Issues, Debates, and Lessons Learned~~
~~Congress provided additional funding for SBA entrepreneurial development programs during and~~
~~immediately following the Great Recession. For example, ARRA provided an additional $24~~
mil ion for Microloan Technical Assistance grants. The Smal Business Jobs Act of 2010 provided mil ion for Microloan Technical Assistance grants. The Smal Business Jobs Act of 2010 provided
SBDCs an additional $50 mil ion and temporarily waived SBDC, Microloan Technical SBDCs an additional $50 mil ion and temporarily waived SBDC, Microloan Technical
Assistance, and WBC matching requirements. Assistance, and WBC matching requirements.
Similar proposals have been made to address the COVID-19 pandemic. For example, S. 3518, the Similar proposals have been made to address the COVID-19 pandemic. For example, S. 3518, the
COVID-19 RELIEF for Smal Businesses Act of 2020, as introduced, would provide an COVID-19 RELIEF for Smal Businesses Act of 2020, as introduced, would provide an
additional $150 mil ion for SBA’s entrepreneurial development programs, including $40 mil ion additional $150 mil ion for SBA’s entrepreneurial development programs, including $40 mil ion
for SBDCs, $18.75 for WBCs, $1 mil ion to SCORE, and $50 mil ion for Microloan Technical for SBDCs, $18.75 for WBCs, $1 mil ion to SCORE, and $50 mil ion for Microloan Technical
Assistance grants. The bil also would waive SBDC, Microloan Technical Assistance, and WBC Assistance grants. The bil also would waive SBDC, Microloan Technical Assistance, and WBC
grant matching requirements. The CARES Act appropriated $265 mil ion for entrepreneurial grant matching requirements. The CARES Act appropriated $265 mil ion for entrepreneurial
development programs ($192 mil ion for SBDCs, $48 mil ion for WBCs, and $25 mil ion for development programs ($192 mil ion for SBDCs, $48 mil ion for WBCs, and $25 mil ion for
SBA resource partners to provide online information and training). The act also waived SBDC SBA resource partners to provide online information and training). The act also waived SBDC
and WBC matching requirements. and WBC matching requirements.
Congress could require the SBA’s resource partners to report to the SBA both output and Congress could require the SBA’s resource partners to report to the SBA both output and
outcome performance data for these grants and to require the SBA to report that information to outcome performance data for these grants and to require the SBA to report that information to
Congress and make that information available to the public on the SBA website. Congress and make that information available to the public on the SBA website.
SBA Contracting Programs118
Overview
Federal agencies are required to facilitate the maximum participation of smal businesses as prime Federal agencies are required to facilitate the maximum participation of smal businesses as prime
contractors, subcontractors, and suppliers. For example, federal agencies are general y required to contractors, subcontractors, and suppliers. For example, federal agencies are general y required to
reserve contracts that have an anticipated value greater than the micro-purchase threshold reserve contracts that have an anticipated value greater than the micro-purchase threshold
(currently $10,000), but not greater than the simplified acquisition threshold (currently $250,000) (currently $10,000), but not greater than the simplified acquisition threshold (currently $250,000)
exclusively for smal businesses unless the contracting officer is unable to obtain offers from two exclusively for smal businesses unless the contracting officer is unable to obtain offers from two
or more smal businesses that are competitive with market prices and the quality and delivery of or more smal businesses that are competitive with market prices and the quality and delivery of
the goods or services being purchased.119 the goods or services being purchased.119

~~117 SBA, FY2021 Congressional Budget Justification and FY2019 Annual Performance Report, p. 89.~~
Several SBA programs assist smal businesses in obtaining and performing federal contracts and subcontracts. These include various prime contracting programs, subcontracting programs, and other assistance (e.g., contracting technical training assistance and oversight of the federal smal business goaling program and the Surety Bond Guarantee program).120 118 For additional information and analysis concerning SBA contracting programs, see CRS Report R45576, 118 For additional information and analysis concerning SBA contracting programs, see CRS Report R45576, An
Overview of Sm all Business Contracting, by Robert Jay Dilger. , by Robert Jay Dilger.
119 15 U.S.C. §644(j)(1). Certain regulations implementing this provision of the Small Business Act effectively narrows 119 15 U.S.C. §644(j)(1). Certain regulations implementing this provision of the Small Business Act effectively narrows
its scope. For example, certain small business contracts awarded or performed overseas are not necessarily required to its scope. For example, certain small business contracts awarded or performed overseas are not necessarily required to
be set aside for small businesses, and the small business provisions contained in Part 19 of the Federal Acquisition be set aside for small businesses, and the small business provisions contained in Part 19 of the Federal Acquisition
Regulation (FAR) generally do not apply to blanket purchase agreements and orders placed against Federal Regulation (FAR) generally do not apply to blanket purchase agreements and orders placed against Federal ~~Supply~~Sup ply Schedule contracts. 120 For additional information and analysis concerning the SBA’s Surety Bond Program, see CRS Report R42037, SBA Surety Bond Guarantee Program , by Robert Jay Dilger. Congressional Research Service 31 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options
~~Schedule contracts.~~
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~~Several SBA programs assist smal businesses in obtaining and performing federal contracts and~~
~~subcontracts. These include various prime contracting programs, subcontracting programs, and~~
~~other assistance (e.g., contracting technical training assistance and oversight of the federal smal~~
~~business goaling program and the Surety Bond Guarantee program).120~~
8(a) Program121
The SBA’s 8(a) Minority Smal Business and Capital Ownership Development Program provides The SBA’s 8(a) Minority Smal Business and Capital Ownership Development Program provides
business development assistance to businesses owned and controlled by persons who are social y business development assistance to businesses owned and controlled by persons who are social y
and economical y disadvantaged, have good character, and demonstrate a potential for success.122 and economical y disadvantaged, have good character, and demonstrate a potential for success.122
Although the 8(a) Program was original y established in the 1980s for the benefit of Although the 8(a) Program was original y established in the 1980s for the benefit of
disadvantaged individuals, Congress expanded the program to include smal businesses owned by disadvantaged individuals, Congress expanded the program to include smal businesses owned by
four disadvantaged groups. Smal businesses owned by Alaska Native Corporations (ANCs), four disadvantaged groups. Smal businesses owned by Alaska Native Corporations (ANCs),
Community Development Corporations (CDCs), Indian tribes, and Native Hawai an Community Development Corporations (CDCs), Indian tribes, and Native Hawai an
Organizations (NHOs) are also eligible to participate in the 8(a) Program under somewhat Organizations (NHOs) are also eligible to participate in the 8(a) Program under somewhat
different requirements. different requirements.
Federal agencies are authorized to award contracts for goods or services, or to perform Federal agencies are authorized to award contracts for goods or services, or to perform
construction work, to the SBA for subcontracting to 8(a) firms. The SBA is authorized to delegate construction work, to the SBA for subcontracting to 8(a) firms. The SBA is authorized to delegate
the function of executing contracts to the procuring agencies and often does so. Once the SBA has the function of executing contracts to the procuring agencies and often does so. Once the SBA has
accepted a contract for the 8(a) Program, the contract is awarded through either a restricted accepted a contract for the 8(a) Program, the contract is awarded through either a restricted
competition limited to just 8(a) participants (a set aside) or on a sole source basis, with the competition limited to just 8(a) participants (a set aside) or on a sole source basis, with the
contract amount general y determining the acquisition method used. contract amount general y determining the acquisition method used.
For individual y owned smal businesses, when the contract’s anticipated total value, including For individual y owned smal businesses, when the contract’s anticipated total value, including
any options, is less than $4 mil ion ($7 mil ion for manufacturing contracts), the contract is any options, is less than $4 mil ion ($7 mil ion for manufacturing contracts), the contract is
normal y awarded without competition (as a sole source award). In contrast, when the contract’s normal y awarded without competition (as a sole source award). In contrast, when the contract’s
anticipated value exceeds these thresholds, the contract general y must be awarded via a set aside anticipated value exceeds these thresholds, the contract general y must be awarded via a set aside
with competition limited to 8(a) firms so long as there is a reasonable expectation that at least two with competition limited to 8(a) firms so long as there is a reasonable expectation that at least two
eligible and responsible 8(a) firms wil submit offers and the award can be made at fair market eligible and responsible 8(a) firms wil submit offers and the award can be made at fair market
price.123 price.123
Similar to other participants, firms owned by ANCs, CDCs, NHOs, and Indian tribes are eligible Similar to other participants, firms owned by ANCs, CDCs, NHOs, and Indian tribes are eligible
for 8(a) set asides and may receive sole source awards valued at less than $4 mil ion ($7 mil ion for 8(a) set asides and may receive sole source awards valued at less than $4 mil ion ($7 mil ion
for manufacturing contracts). However, firms owned by ANCs and Indian tribes can also receive for manufacturing contracts). However, firms owned by ANCs and Indian tribes can also receive
sole source awards in excess of $4 mil ion ($7 mil ion for manufacturing contracts) even when sole source awards in excess of $4 mil ion ($7 mil ion for manufacturing contracts) even when
contracting officers reasonably expect that at least two eligible and responsible 8(a) firms wil contracting officers reasonably expect that at least two eligible and responsible 8(a) firms wil

~~120 For additional information and analysis concerning the SBA’s Surety Bond Program, see CRS Report R42037,~~ ~~SBA~~
~~Surety Bond Guarantee Program~~ ~~, by Robert Jay Dilger.~~
submit offers and the award can be made at fair market price.124 NHO-owned firms may receive sole source awards from the Department of Defense under the same conditions.125 121 For additional information and analysis concerning the 8(a) Program, see CRS Report R44844, 121 For additional information and analysis concerning the 8(a) Program, see CRS Report R44844, SBA’s “8(a)
Program”: Overview, History, and Current Issues, by Robert Jay Dilger. , by Robert Jay Dilger.
122 Section 8(a) of the Small Business Act, P.L. 85-536, as amended, can be found at 15 U.S.C. §637(a). Regulations 122 Section 8(a) of the Small Business Act, P.L. 85-536, as amended, can be found at 15 U.S.C. §637(a). Regulations
are in 13 C.F.R. §124. are in 13 C.F.R. §124.
123 15 U.S.C. §637(a)(1)(D)(ii); and SBA, “Conforming Statutory Amendments and T echnical Corrections to Small 123 15 U.S.C. §637(a)(1)(D)(ii); and SBA, “Conforming Statutory Amendments and T echnical Corrections to Small
Business Government Contracting Regulations,” 83Business Government Contracting Regulations,” 83 Federal Register 12849, March 26, 2018. 12849, March 26, 2018.
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~~submit offers and the award can be made at fair market price.124 NHO-owned firms may receive~~
~~sole source awards from the Department of Defense under the same conditions.125~~124 P.L. 100-656, §602(a), 102 Stat. 3887-88 (November 15, 1988) (codified at 15 U.S.C. §637 note); and 48 C.F.R. §19.805-1(b)(2). 125 DOD’s authority to make sole source awards to NHO-owned firms of contracts valued at more than $4 million ($7 million for manufacturing contracts) even if contracting officers reasonably expect that offers will be received from at least two responsible small businesses existed on a temporary basis in 2004 -2006 and became permanent in 2006. See P.L. 109-148, Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act of 2006, §8020, 119 St at. 2702-03 (December 30, 2005); 48 C.F.R. §219.805-1(b)(2)(A)-(B). Congressional Research Service 32 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options
The 8(a) program is designed to help federal agencies achieve their statutory goal of awarding at The 8(a) program is designed to help federal agencies achieve their statutory goal of awarding at
least 5% of their federal contracting dollars to smal disadvantaged businesses. least 5% of their federal contracting dollars to smal disadvantaged businesses.
In FY2019, the federal government awarded $30.3 bil ion to 8(a) firms. In FY2019, the federal government awarded $30.3 bil ion to 8(a) firms.
Historically Underutilized Business Zone Program126
The SBA oversees the Historical y Underutilized Business Zones (HUBZones) Program. The The SBA oversees the Historical y Underutilized Business Zones (HUBZones) Program. The
program assists smal businesses located in HUBZone-designated areas through set asides, sole program assists smal businesses located in HUBZone-designated areas through set asides, sole
source awards (so long as the award can be made at a fair and reasonable price, and the source awards (so long as the award can be made at a fair and reasonable price, and the
anticipated total value of the contract, including any options, is below $4 mil ion, or $7 mil ion anticipated total value of the contract, including any options, is below $4 mil ion, or $7 mil ion
for manufacturing contracts) and price evaluation preferences (of up to 10%) in full and open for manufacturing contracts) and price evaluation preferences (of up to 10%) in full and open
competitions.127 The HUBZone program targets assistance to smal businesses located in areas competitions.127 The HUBZone program targets assistance to smal businesses located in areas
with low income, high poverty, or high unemployment.128 To be certified as a HUBZone smal with low income, high poverty, or high unemployment.128 To be certified as a HUBZone smal
business, at least 35% of the smal business’s employees must business, at least 35% of the smal business’s employees must ~~general y~~generally reside in a HUBZone. reside in a HUBZone.
The HUBZone contracting program is designed to help federal agencies achieve their statutory The HUBZone contracting program is designed to help federal agencies achieve their statutory
goal of awarding at least 3% of their federal contracting dollars to HUBZone smal businesses. goal of awarding at least 3% of their federal contracting dollars to HUBZone smal businesses.
In FY2019, the federal government awarded $10.8 bil ion to HUBZone-certified smal In FY2019, the federal government awarded $10.8 bil ion to HUBZone-certified smal
businesses. businesses.
Service-Disabled Veteran-Owned Small Business Program
The SBA oversees the Service-Disabled Veteran-Owned Smal Business (SDVOSB) Program. The SBA oversees the Service-Disabled Veteran-Owned Smal Business (SDVOSB) Program.
The program al ows agencies to set aside contracts for SDVOSBs. Federal agencies may award The program al ows agencies to set aside contracts for SDVOSBs. Federal agencies may award
sole source contracts to SDVOSBs so long as the award can be made at a fair and reasonable sole source contracts to SDVOSBs so long as the award can be made at a fair and reasonable
price, and the anticipated total value of the contract, including any options, is below $4 mil ion price, and the anticipated total value of the contract, including any options, is below $4 mil ion
($6.5 mil ion for manufacturing contracts).129 For purposes of this program, veterans with service-($6.5 mil ion for manufacturing contracts).129 For purposes of this program, veterans with service-
related disabilities are defined as they are under the statutes governing veterans affairs.130 related disabilities are defined as they are under the statutes governing veterans affairs.130

~~124 P.L. 100-656, §602(a), 102 Stat. 3887-88 (November 15, 1988) (codified at 15 U.S.C. §637 note); and 48 C.F.R.~~
~~§19.805-1(b)(2).~~
~~125 DOD’s authority to make sole source awards to NHO-owned firms of contracts valued at more than $4 million ($7~~
~~million for manufacturing contracts) even if contracting officers reasonably expect that offers will be received from at~~
~~least two responsible small businesses existed on a temporary basis in 2004 -2006 and became permanent in 2006. See~~
~~P.L. 109-148, Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of~~
~~Mexico, and Pandemic Influenza Act of 2006, §8020, 119 St at. 2702-03 (December 30, 2005); 48 C.F.R. §219.805-~~
~~1(b)(2)(A)-(B).~~
The SDVOSB contracting program is designed to help federal agencies achieve their statutory goal of awarding at least 3% of their federal contracting dollars to SDVOSBs. In FY2019, the federal government awarded $23.5 bil ion to SDVOSBs. Women-Owned Small Business Program The SBA oversees the Women-Owned Smal Businesses (WOSB) Program. Under this program, federal contracting officers may set aside federal contracts (or orders) for WOSBs and Economical y Disadvantaged Women-Owned Smal Businesses (EDWOSBs) in industries in 126 For additional information and analysis, see CRS Report R41268, 126 For additional information and analysis, see CRS Report R41268, Small Business Administration HUBZone
Program , by Robert Jay Dilger. , by Robert Jay Dilger.
127 15 U.S.C. §657a(b)(2-3); and SBA, “Conforming Statutory Amendments and T echnical Corrections to Small 127 15 U.S.C. §657a(b)(2-3); and SBA, “Conforming Statutory Amendments and T echnical Corrections to Small
Business Government Contracting Regulations,” 83Business Government Contracting Regulations,” 83 Federal Register 12849, March 26, 2018. 12849, March 26, 2018.
128 For specific criteria, see 15 U.S.C. §632(p)(4); and 13 C.F.R. §126.103. 128 For specific criteria, see 15 U.S.C. §632(p)(4); and 13 C.F.R. §126.103.
129 15 U.S.C. §657f(a-b); and SBA, “Conforming Statutory Amendments and T echnical Corrections to Small Business 129 15 U.S.C. §657f(a-b); and SBA, “Conforming Statutory Amendments and T echnical Corrections to Small Business
Government Contracting Regulations,” 83Government Contracting Regulations,” 83 Federal Register 12849, March 26, 2018. 12849, March 26, 2018.
130 38 U.S.C. §8127(f). Veteran-owned small businesses and service-disabled veteran-owned small businesses are 130 38 U.S.C. §8127(f). Veteran-owned small businesses and service-disabled veteran-owned small businesses are
eligible for separate preferences in procurements conducted by the Department of Veterans Affairs under the eligible for separate preferences in procurements conducted by the Department of Veterans Affairs under the ~~authority~~author ity
of P.L. 109-461, the Veterans Benefits, Health Care, and Information Technology Act of 2006, as amended by P.L. of P.L. 109-461, the Veterans Benefits, Health Care, and Information Technology Act of 2006, as amended by P.L.
110-389, the Veterans’ Benefits Improvements Act of 2008. Congressional Research Service Congressional Research Service
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~~The SDVOSB contracting program is designed to help federal agencies achieve their statutory~~
~~goal of awarding at least 3% of their federal contracting dollars to SDVOSBs.~~
~~In FY2019, the federal government awarded $23.5 bil ion to SDVOSBs.~~
~~Women-Owned Small Business Program~~
~~The SBA oversees the Women-Owned Smal Businesses (WOSB) Program. Under this program,~~
~~federal contracting officers may set aside federal contracts (or orders) for WOSBs and~~
~~Economical y Disadvantaged Women-Owned Smal Businesses (EDWOSBs) in industries in~~
which the SBA determines WOSBs are substantial y underrepresented in federal procurement. which the SBA determines WOSBs are substantial y underrepresented in federal procurement.
Federal contracting officers can also set aside federal contracts for EDWOSBs exclusively in Federal contracting officers can also set aside federal contracts for EDWOSBs exclusively in
industries in which the SBA determines WOSBs are underrepresented in federal procurement. industries in which the SBA determines WOSBs are underrepresented in federal procurement.
The WOSB Program is designed to help federal agencies achieve their statutory goal of awarding The WOSB Program is designed to help federal agencies achieve their statutory goal of awarding
at least 5% of their federal contracting dollars to WOSBs. at least 5% of their federal contracting dollars to WOSBs.
Federal agencies may award sole source contracts to WOSBs so long as the award can be made at Federal agencies may award sole source contracts to WOSBs so long as the award can be made at
a fair and reasonable price, and the anticipated total value of the contract, including any options, a fair and reasonable price, and the anticipated total value of the contract, including any options,
is below $4 mil ion ($6.5 mil ion for manufacturing contracts).131 is below $4 mil ion ($6.5 mil ion for manufacturing contracts).131
In FY2019, the federal government awarded $25.0 bil ion to WOSBs. In FY2019, the federal government awarded $25.0 bil ion to WOSBs.
SBA Surety Bond Program132
The SBA’s Surety Bond Guarantee Program has been operational since April 1971.133 It is The SBA’s Surety Bond Guarantee Program has been operational since April 1971.133 It is
designed to increase smal business’ access to federal, state, and local government contracting, as designed to increase smal business’ access to federal, state, and local government contracting, as
wel as private sector contracting, by guaranteeing bid, performance, payment, and specified wel as private sector contracting, by guaranteeing bid, performance, payment, and specified
ancil ary bonds “on contracts … for smal and emerging contractors who cannot obtain bonding ancil ary bonds “on contracts … for smal and emerging contractors who cannot obtain bonding
through regular commercial channels.”134 The program guarantees individual contracts of up to through regular commercial channels.”134 The program guarantees individual contracts of up to
$6.5 mil ion, and up to $10 mil ion for federal contracts if a federal contracting officer certifies $6.5 mil ion, and up to $10 mil ion for federal contracts if a federal contracting officer certifies
that such a guarantee is necessary. The $6.5 mil ion limit is periodical y adjusted for inflation.135 that such a guarantee is necessary. The $6.5 mil ion limit is periodical y adjusted for inflation.135
The SBA’s guarantee currently ranges from 80% to 90% of the surety’s loss if a default occurs. The SBA’s guarantee currently ranges from 80% to 90% of the surety’s loss if a default occurs.

~~110-389, the Veterans’ Benefits Improvements Act of 2008.~~
~~131 15 U.S.C. §637(m); and SBA, “Conforming Statutory Amendments and T echnical Correct ions~~ In FY2019, the SBA guaranteed 9,905 bid and final surety bonds (a payment bond, performance bond, or both a payment and performance bond) with a total contract value of nearly $6.5 bil ion.136 A surety bond is a three-party instrument between a surety (who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the contract’s terms and conditions. If the contractor is unable to successfully perform the contract, the surety assumes the contractor’s responsibilities and ensures that the project is completed. Surety bonds encourage project owners to contract with smal 131 15 U.S.C. §637(m); and SBA, “Conforming Statutory Amendments and T echnical Corrections to Small Business to Small Business
Government Contracting Regulations,” 83Government Contracting Regulations,” 83 Federal Register 12849, March 26, 2018. 12849, March 26, 2018.
132 For additional information and analysis concerning the SBA’s Surety Bond Program, see CRS Report R42037, 132 For additional information and analysis concerning the SBA’s Surety Bond Program, see CRS Report R42037, SBA
Surety Bond Guarantee Program , by Robert Jay Dilger. , by Robert Jay Dilger.
133 P.L. 91-609, the Housing and Urban Development Act of 1970; and U.S. Congress, Senate Committee on Banking, 133 P.L. 91-609, the Housing and Urban Development Act of 1970; and U.S. Congress, Senate Committee on Banking,
Housing, and Urban Affairs, Housing, and Urban Affairs, Sm all Business Legislation - 1974, hearing on S. 3137 and S. 3138, 93rd Cong., 2nd sess., , hearing on S. 3137 and S. 3138, 93rd Cong., 2nd sess.,
March 13, 1974 (Washington, DC: GPO, 1974), p. 19. March 13, 1974 (Washington, DC: GPO, 1974), p. 19.
134 SBA, “ FY2016 Congressional Budget Justification and FY2014 Annual Performance Report,” p. 44, at 134 SBA, “ FY2016 Congressional Budget Justification and FY2014 Annual Performance Report,” p. 44, at
https://www.sba.gov/sites/default/files/1-FY%202016%20CBJ%20FY%202014%20APR.PDF. An ancillary bond, https://www.sba.gov/sites/default/files/1-FY%202016%20CBJ%20FY%202014%20APR.PDF. An ancillary bond,
which ensures that requirements integral to the contract, but not directly performance related, are performed, is eligible which ensures that requirements integral to the contract, but not directly performance related, are performed, is eligible
if it is incidental and essential to a contract for which SBA has guaranteed a final bond. A reclamation bond is eligible if it is incidental and essential to a contract for which SBA has guaranteed a final bond. A reclamation bond is eligible
if it is issued to reclaim an abandoned mine site and for a project undertaken for a specific period of time. if it is issued to reclaim an abandoned mine site and for a project undertaken for a specific period of time.
135 P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013, increased the program’s guarantee limit 135 P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013, increased the program’s guarantee limit
from $2.0 million to $6.5 million, and up to $10 million for a federal contract if from $2.0 million to $6.5 million, and up to $10 million for a federal contract if ~~cert ified~~certified. T he act also includes a . T he act also includes a
provision to increase the $6.5 million limit periodically for inflation “by striking ‘does not exceed’ and all that follows provision to increase the $6.5 million limit periodically for inflation “by striking ‘does not exceed’ and all that follows
through the period at the end, and inserting ‘does not exceed $6,500,000,’ as adjusted for inflation in accordance with through the period at the end, and inserting ‘does not exceed $6,500,000,’ as adjusted for inflation in accordance with
Section 1908 of title 41, United States Code.” T hat section of the Section 1908 of title 41, United States Code.” T hat section of the U.S. Code provides for an inflation adjustment on provides for an inflation adjustment on
October 1 of each year evenly divisible by five. October 1 of each year evenly divisible by five.
136 SBA, Office of Congressional and Legislative Affairs, correspondence with the author, January 14, 2020. Congressional Research Service Congressional Research Service
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~~In FY2019, the SBA guaranteed 9,905 bid and final surety bonds (a payment bond, performance~~
~~bond, or both a payment and performance bond) with a total contract value of nearly $6.5~~
~~bil ion.136~~
~~A surety bond is a three-party instrument between a surety (who agrees to be responsible for the~~
~~debt or obligation of another), a contractor, and a project owner. The agreement binds the~~
~~contractor to comply with the contract’s terms and conditions. If the contractor is unable to~~
~~successfully perform the contract, the surety assumes the contractor’s responsibilities and ensures~~
~~that the project is completed. Surety bonds encourage project owners to contract with smal~~
businesses that may not have the credit history or prior experience of larger businesses and may businesses that may not have the credit history or prior experience of larger businesses and may
be at greater risk of failing to comply with the contract’s terms and conditions. be at greater risk of failing to comply with the contract’s terms and conditions.
Surety bonds are important to smal businesses interested in competing for federal contracts Surety bonds are important to smal businesses interested in competing for federal contracts
because the federal government requires prime contractors—prior to the award of a federal because the federal government requires prime contractors—prior to the award of a federal
contract exceeding $150,000 for the construction, alteration, or repair of any building or public contract exceeding $150,000 for the construction, alteration, or repair of any building or public
work of the United States—to furnish a performance bond issued by a surety satisfactory to the work of the United States—to furnish a performance bond issued by a surety satisfactory to the
contracting officer in an amount that the officer considers adequate to protect the government. contracting officer in an amount that the officer considers adequate to protect the government.
Current Issues, Debates, and Lessons Learned
Congress included enhancements for smal business contracting in both ARRA (increased funding Congress included enhancements for smal business contracting in both ARRA (increased funding
and higher maximum bond amounts for the SBA Surety Bond program) and the Smal Business and higher maximum bond amounts for the SBA Surety Bond program) and the Smal Business
Jobs Act of 2010 (new restrictions on the consolidation or bundling of contracts that make it more Jobs Act of 2010 (new restrictions on the consolidation or bundling of contracts that make it more
difficult for smal businesses to be awarded the contract). The CARES Act authorizes federal difficult for smal businesses to be awarded the contract). The CARES Act authorizes federal
agencies to modify a contract’s terms and conditions to reimburse contractors—at the minimum agencies to modify a contract’s terms and conditions to reimburse contractors—at the minimum
bil ing rate not to exceed an average of 40 hours per week—for any paid leave (including sick bil ing rate not to exceed an average of 40 hours per week—for any paid leave (including sick
leave) the contractor provides to keep its employees or subcontractors in a ready state through leave) the contractor provides to keep its employees or subcontractors in a ready state through
September 30, 2020. Eligible contractors are those whose employees or subcontractors cannot September 30, 2020. Eligible contractors are those whose employees or subcontractors cannot
perform work on a federal y approved site due to facility closures or other restrictions because of perform work on a federal y approved site due to facility closures or other restrictions because of
COVID-19 and cannot telework because their job duties cannot be performed remotely. COVID-19 and cannot telework because their job duties cannot be performed remotely.
Concluding Observations
In response to the Great Recession, Congress took a number of actions to enhance smal In response to the Great Recession, Congress took a number of actions to enhance smal
businesses’ access to capital, management and training programs, and contracting opportunities. businesses’ access to capital, management and training programs, and contracting opportunities.
The goal then, as it is now, was to provide smal businesses with the resources necessary to The goal then, as it is now, was to provide smal businesses with the resources necessary to
survive the economic downturn and retain or create jobs. Some of the CARES Act’s provisions survive the economic downturn and retain or create jobs. Some of the CARES Act’s provisions
(e.g., fee waivers, increased loan limits, and increased guarantee percentages) were used in (e.g., fee waivers, increased loan limits, and increased guarantee percentages) were used in
legislation passed during the 111th Congress to address the severe economic slowdown during and legislation passed during the 111th Congress to address the severe economic slowdown during and
immediately following the Great Recession (2007-2009). The main difference between that immediately following the Great Recession (2007-2009). The main difference between that
legislation and the CARES Act is that the CARES Act includes loan deferrals, loan forgiveness, legislation and the CARES Act is that the CARES Act includes loan deferrals, loan forgiveness,
and greatly expanded eligibility, including, for the first time, specified types of nonprofit and greatly expanded eligibility, including, for the first time, specified types of nonprofit
organizations. organizations.
The CARES Act’s inclusion of loan deferral and forgiveness is, at least partly, due to the unique The CARES Act’s inclusion of loan deferral and forgiveness is, at least partly, due to the unique
economic dislocations and reduction in consumer spending resulting from individuals and economic dislocations and reduction in consumer spending resulting from individuals and
households engaging in physical distancing to avoid COVID-19 infection. households engaging in physical distancing to avoid COVID-19 infection.
As mentioned, because COVID-19’s adverse economic impact is so widespread, including As mentioned, because COVID-19’s adverse economic impact is so widespread, including
productivity losses, supply chain disruptions, labor dislocation, and financial pressure on productivity losses, supply chain disruptions, labor dislocation, and financial pressure on

~~136 SBA, Office of Congressional and Legislative Affairs, correspondence with the author, January 14, 2020.~~
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businesses and households, there has been relatively little concern expressed about federal fiscal businesses and households, there has been relatively little concern expressed about federal fiscal
restraint during the current pandemic. The debate has been primarily over which specific policies restraint during the current pandemic. The debate has been primarily over which specific policies
would have the greatest impact and which types of smal businesses and smal business owners would have the greatest impact and which types of smal businesses and smal business owners
should be helped the most. should be helped the most.
Among the lessons learned from the 111th Congress is the potential benefits that can be derived Among the lessons learned from the 111th Congress is the potential benefits that can be derived
from providing additional funding for the SBA’s Office of Inspector General and the Government from providing additional funding for the SBA’s Office of Inspector General and the Government
Accountability Office. GAO and the SBA’s OIG can provide Congress information that could Accountability Office. GAO and the SBA’s OIG can provide Congress information that could
prove useful as Congress engages in congressional oversight of the SBA’s administration of the prove useful as Congress engages in congressional oversight of the SBA’s administration of the
CARES Act, provide an early warning if unforeseen administrative problems should arise, and, CARES Act, provide an early warning if unforeseen administrative problems should arise, and,
~~through investigations and audits, serve as a deterrent to fraud.~~
through investigations and audits, serve as a deterrent to fraud. The CARES Act addressed this Congressional Research Service 35 COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options issue by providing the SBA’s OIG $25 mil ion for its investigative functions. If enacted, H.R. 133, the Economic Aid to Hard-Hit Smal Businesses, Nonprofits, and Venues Act (Division M, Title III of the Consolidated Appropriations Act of 2021), would provide the SBA OIG an additional $20 mil ion to prevent waste, fraud, and abuse in the awarding of EIDL Targeted advance payment grants. The bil would also provide the SBA $50 mil ion for PPP auditing and fraud mitigation efforts. Requiring the SBA to report regularly on its implementation of the CARES Act could also Requiring the SBA to report regularly on its implementation of the CARES Act could also
promote transparency and assist Congress in performing its oversight responsibilities. In addition, promote transparency and assist Congress in performing its oversight responsibilities. In addition,
requiring output and outcome performance measures and requiring the SBA to report this requiring output and outcome performance measures and requiring the SBA to report this
information directly to both Congress and the public by posting that information on the SBA’s information directly to both Congress and the public by posting that information on the SBA’s
website could enhance both congressional oversight and public confidence in the SBA’s efforts to website could enhance both congressional oversight and public confidence in the SBA’s efforts to
assist smal businesses. assist smal businesses.
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Appendix. Major Provisions of the CARES Act, the
Paycheck Protection Program and Health Care
Enhancement Act, the Paycheck Protection Program
Flexibility Act, the Heroes Act, the Continuing
Small Business Recovery and Paycheck Protection
Program Act, and the (updated) Heroes Act
The Coronavirus Aid, Relief, and Economic Security Act (CARES
Act; P.L. 116-136)
 established a Paycheck Protection Program (PPP) to provide “covered loans”  established a Paycheck Protection Program (PPP) to provide “covered loans”
with a 100% SBA loan guarantee, a maximum term of 10 years, and an interest with a 100% SBA loan guarantee, a maximum term of 10 years, and an interest
rate not to exceed 4% to assist smal businesses and other organizations adversely rate not to exceed 4% to assist smal businesses and other organizations adversely
affected by the Coronavirus Disease 2019 (COVID-19). The SBA announced that affected by the Coronavirus Disease 2019 (COVID-19). The SBA announced that
PPP loans wil have a two-year term at a 1.0% interest rate; PPP loans wil have a two-year term at a 1.0% interest rate;
 defines a covered loan as a loan made to an eligible recipient from February 15,  defines a covered loan as a loan made to an eligible recipient from February 15,
2020, through June 30, 2020; 2020, through June 30, 2020;
 waives the up-front loan guarantee fee and annual servicing fee, the no credit  waives the up-front loan guarantee fee and annual servicing fee, the no credit
elsewhere requirement, and the requirements for collateral and a personal elsewhere requirement, and the requirements for collateral and a personal
guarantee for a covered loan; guarantee for a covered loan;
 expands eligibility for a covered loan to include 7(a) eligible businesses and any  expands eligibility for a covered loan to include 7(a) eligible businesses and any
business, 501(c)(3) nonprofit organization, 501(c)(19) veteran’s organization, or business, 501(c)(3) nonprofit organization, 501(c)(19) veteran’s organization, or
tribal business not currently eligible that has not more than 500 employees or, if tribal business not currently eligible that has not more than 500 employees or, if
applicable, the SBA’s size standard in number of employees for the industry in applicable, the SBA’s size standard in number of employees for the industry in
which they operate. Sole proprietors, independent contractors, and eligible self-which they operate. Sole proprietors, independent contractors, and eligible self-
employed individuals are also eligible to receive a covered loan;137 employed individuals are also eligible to receive a covered loan;137
 al ows borrowers to refinance Economic Injury Disaster Loans (EIDLs) made on  al ows borrowers to refinance Economic Injury Disaster Loans (EIDLs) made on
or after January 31, 2020, as part of a covered loan; or after January 31, 2020, as part of a covered loan;
 increases the maximum loan amount for a covered loan to the lesser of (1) 2.5  increases the maximum loan amount for a covered loan to the lesser of (1) 2.5
times the average total monthly payments by the applicant for payroll costs times the average total monthly payments by the applicant for payroll costs
incurred during the one-year period before the date on which the loan is made incurred during the one-year period before the date on which the loan is made
plus the outstanding balance of any EIDL made on or after January 31, 2020, that plus the outstanding balance of any EIDL made on or after January 31, 2020, that
is refinanced as part of a covered loan, or (2) $10 mil ion; is refinanced as part of a covered loan, or (2) $10 mil ion;
 specifies that covered loans are nonrecourse (meaning that the SBA cannot  specifies that covered loans are nonrecourse (meaning that the SBA cannot
pursue collections actions against the recipient(s) in the case of nonpayment) pursue collections actions against the recipient(s) in the case of nonpayment)

137 For purposes of determining not more than 500 employees, the term employee includes individuals employed on a 137 For purposes of determining not more than 500 employees, the term employee includes individuals employed on a
full-time, part -time, or other basis. Also, special eligibility considerations are provided for certain full-time, part -time, or other basis. Also, special eligibility considerations are provided for certain ~~busin esses~~businesses and and
organizations. For example, businesses operating in NAICS Sector 72 ( Accommodation and Food Services industry) organizations. For example, businesses operating in NAICS Sector 72 ( Accommodation and Food Services industry)
that employ not more than 500 employees per physical location are also eligible for a covered loan. Affiliation rules are that employ not more than 500 employees per physical location are also eligible for a covered loan. Affiliation rules are
also waived for: (1) NAICS Sector 72 businesses, (2) franchises, and (3) SBIC-owned businesses. In other words, these also waived for: (1) NAICS Sector 72 businesses, (2) franchises, and (3) SBIC-owned businesses. In other words, these
businesses would not be denied a covered loan solely because they employ more thanbusinesses would not be denied a covered loan solely because they employ more than 500 employees across multiple 500 employees across multiple
businesses under common ownership. businesses under common ownership.
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except to the extent that the covered loan proceeds are used for nonauthorized except to the extent that the covered loan proceeds are used for nonauthorized
purposes; purposes;
 al ows covered loans to be used for payroll costs, costs related to the continuation  al ows covered loans to be used for payroll costs, costs related to the continuation
of group health care benefits during periods of paid sick, medical, or family of group health care benefits during periods of paid sick, medical, or family
leave, and insurance premiums, employee salaries, commissions, or similar leave, and insurance premiums, employee salaries, commissions, or similar
compensations, mortgage payments, rent, utilities, and interest on any other debt compensations, mortgage payments, rent, utilities, and interest on any other debt
obligations that were incurred before the covered period; obligations that were incurred before the covered period;
 expands lender delegated loan approval authority for making covered loans to al  expands lender delegated loan approval authority for making covered loans to al
7(a) lenders to expedite PPP loan processing; 7(a) lenders to expedite PPP loan processing;
 requires lenders, when evaluating borrower eligibility for a covered loan, to  requires lenders, when evaluating borrower eligibility for a covered loan, to
consider whether the borrower was in operation on February 15, 2020, had consider whether the borrower was in operation on February 15, 2020, had
employees for whom the borrower paid salaries and payroll taxes, and paid employees for whom the borrower paid salaries and payroll taxes, and paid
independent contractors; independent contractors;
 requires borrowers to, among other acknowledgements,  requires borrowers to, among other acknowledgements,
 make a good faith certification that the covered loan is needed because of the  make a good faith certification that the covered loan is needed because of the
uncertainty of current economic conditions and to support ongoing uncertainty of current economic conditions and to support ongoing
operations, and operations, and
 acknowledge that the funds wil be used to retain workers, maintain payroll,  acknowledge that the funds wil be used to retain workers, maintain payroll,
or make mortgage payments, lease payments, and utility payments; or make mortgage payments, lease payments, and utility payments;
 requires lenders to provide “impacted borrowers” adversely affected by COVID-  requires lenders to provide “impacted borrowers” adversely affected by COVID-
19 “complete payment deferment relief”138 on a covered PPP loan for not less 19 “complete payment deferment relief”138 on a covered PPP loan for not less
than six months and not more than one year if the borrower was in operation on than six months and not more than one year if the borrower was in operation on
February 15, 2020, and has an application for a covered loan approved or February 15, 2020, and has an application for a covered loan approved or
pending approval on or after the date of enactment. The SBA announced that pending approval on or after the date of enactment. The SBA announced that
covered loan payments wil be deferred for six months. However, interest wil covered loan payments wil be deferred for six months. However, interest wil
continue to accrue on these loans during the six-month deferment;139 continue to accrue on these loans during the six-month deferment;139
 presumes that each eligible recipient that applies for a PPP loan is an impacted  presumes that each eligible recipient that applies for a PPP loan is an impacted
borrower and authorizes the SBA Administrator to purchase covered loans sold borrower and authorizes the SBA Administrator to purchase covered loans sold
on the secondary market so that affected borrowers may receive a deferral for not on the secondary market so that affected borrowers may receive a deferral for not
more than one year. The SBA has announced that the deferment relief on covered more than one year. The SBA has announced that the deferment relief on covered
loans wil be for six months; loans wil be for six months;
 provides for the forgiveness of covered loan amounts equal to the amount the  provides for the forgiveness of covered loan amounts equal to the amount the
borrower spent during an 8-week period after the loan’s origination date on borrower spent during an 8-week period after the loan’s origination date on
payroll costs, interest payment on any mortgage incurred prior to February 15, payroll costs, interest payment on any mortgage incurred prior to February 15,
2020, payment of rent on any lease in force prior to February 15, 2020, and 2020, payment of rent on any lease in force prior to February 15, 2020, and
payment on any utility for which service began before February 15, 2020. The payment on any utility for which service began before February 15, 2020. The
amount of loan forgiveness cannot exceed the covered loan’s principal amount. amount of loan forgiveness cannot exceed the covered loan’s principal amount.
The forgiveness is reduced proportional y by formulas related to the borrower’s The forgiveness is reduced proportional y by formulas related to the borrower’s
retention of full-time equivalent employees compared to the borrower’s choice of retention of full-time equivalent employees compared to the borrower’s choice of
either (1) the period beginning on February 15, 2019, and ending on June 30, either (1) the period beginning on February 15, 2019, and ending on June 30,
2019, or (2) January 1, 2020, and February 29, 2020; and by the amount of any 2019, or (2) January 1, 2020, and February 29, 2020; and by the amount of any
reduction in pay of any employee beyond 25% of their salary or wages during the reduction in pay of any employee beyond 25% of their salary or wages during the

138 According to the bill text, “complete deferment relief” includes payment of principal, interest, and fees. 138 According to the bill text, “complete deferment relief” includes payment of principal, interest, and fees.
139 SBA, “Business Loan Program T emporary Changes; Paycheck Protection Program,” 85 139 SBA, “Business Loan Program T emporary Changes; Paycheck Protection Program,” 85 Federal Register 20813, 20813,
April 15, 2020. April 15, 2020.
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most recent full quarter before the covered period.140 Borrowers that re-hire most recent full quarter before the covered period.140 Borrowers that re-hire
workers previously laid off wil not be penalized for having a reduced payroll at workers previously laid off wil not be penalized for having a reduced payroll at
the beginning of the period. Cancel ed debt resulting from loan forgiveness the beginning of the period. Cancel ed debt resulting from loan forgiveness
would not be included in the borrower’s taxable federal income; would not be included in the borrower’s taxable federal income;
 The SBA has announced that due to likely high subscription, at least 75% of the  The SBA has announced that due to likely high subscription, at least 75% of the
forgiven loan amount must have been used for payroll;141 forgiven loan amount must have been used for payroll;141
 requires the SBA to pay the principal, interest, and any associated fees that are  requires the SBA to pay the principal, interest, and any associated fees that are
owed on an existing 7(a), 504/CDC, or Microloan that is in a regular servicing owed on an existing 7(a), 504/CDC, or Microloan that is in a regular servicing
status for a six-month period starting on the next payment due. Loans that are status for a six-month period starting on the next payment due. Loans that are
already on deferment already on deferment ~~wil~~ will receive six months of payment by the SBA beginning receive six months of payment by the SBA beginning
with the first payment after the deferral period. Loans made up until six months with the first payment after the deferral period. Loans made up until six months
after enactment wil also receive a full six months of SBA loan payments; after enactment wil also receive a full six months of SBA loan payments;
 requires federal banking agencies or the National Credit Union Administration  requires federal banking agencies or the National Credit Union Administration
Board applying capital requirements under their respective risk-based capital Board applying capital requirements under their respective risk-based capital
requirements to provide a covered loan with a 0%-risk weight; requirements to provide a covered loan with a 0%-risk weight;
 increases the SBA’s lending authorization under Section 7(a) of the Smal  increases the SBA’s lending authorization under Section 7(a) of the Smal
Business Act from $30 bil ion to $349 bil ion during the covered period; Business Act from $30 bil ion to $349 bil ion during the covered period;
 increases the SBAExpress loan limit from $350,000 to $1 mil ion (reverts to  increases the SBAExpress loan limit from $350,000 to $1 mil ion (reverts to
$350,000 on January 1, 2021); $350,000 on January 1, 2021);
 permanently eliminates the zero subsidy requirement to waive SBAExpress loan  permanently eliminates the zero subsidy requirement to waive SBAExpress loan
fees for veterans; fees for veterans;
 appropriates $349 bil ion for loan guarantees and subsidies (remaining available  appropriates $349 bil ion for loan guarantees and subsidies (remaining available
through FY2021), $675 mil ion for the SBA’s salaries and expenses account, $25 through FY2021), $675 mil ion for the SBA’s salaries and expenses account, $25
mil ion for the SBA’s Office of Inspector General (OIG), $562 mil ion for mil ion for the SBA’s Office of Inspector General (OIG), $562 mil ion for
disaster loans, $265 mil ion for entrepreneurial development programs ($192 disaster loans, $265 mil ion for entrepreneurial development programs ($192
mil ion for SBDCs, $48 mil ion for WBCs, and $25 mil ion for SBA resource mil ion for SBDCs, $48 mil ion for WBCs, and $25 mil ion for SBA resource
partners to provide online information and training), $17 bil ion for subsidies for partners to provide online information and training), $17 bil ion for subsidies for
certain loan payments, and $10 mil ion for the Department of Commerce’s certain loan payments, and $10 mil ion for the Department of Commerce’s
Minority Business Development Agency; Minority Business Development Agency;
 al ows the period of use of FY2018 and FY2019 grant awards made under the  al ows the period of use of FY2018 and FY2019 grant awards made under the
State Trade Expansion Program (STEP) through FY2021; State Trade Expansion Program (STEP) through FY2021;
 reimburses (up to the grant amount received) STEP award recipients for financial  reimburses (up to the grant amount received) STEP award recipients for financial
losses relating to a foreign trade mission or a trade show exhibition that was losses relating to a foreign trade mission or a trade show exhibition that was
cancel ed solely due to a public health emergency declared due to COVID-19; cancel ed solely due to a public health emergency declared due to COVID-19;
 waives SBDC and WBC matching requirements;  waives SBDC and WBC matching requirements;
 requires federal agencies to continue to pay smal business contractors and revise  requires federal agencies to continue to pay smal business contractors and revise
delivery schedules, holding smal contractors harmless for being unable to delivery schedules, holding smal contractors harmless for being unable to
perform a contract due to COVID-19 caused interruptions until September 2021; perform a contract due to COVID-19 caused interruptions until September 2021;
 requires federal agencies to promptly pay smal business prime contractors and  requires federal agencies to promptly pay smal business prime contractors and
requires prime contractors to promptly pay smal business subcontractors within requires prime contractors to promptly pay smal business subcontractors within
15 days, notwithstanding any other provision of law or regulation, for the 15 days, notwithstanding any other provision of law or regulation, for the

140 For the purposes of the reduction formula, reductions in employees with wages or salary at an annualized rate of pay 140 For the purposes of the reduction formula, reductions in employees with wages or salary at an annualized rate of pay
more than $100,000 are not taken into account. Businesses may also receive forgiveness amounts more than $100,000 are not taken into account. Businesses may also receive forgiveness amounts ~~for~~f or additional wages additional wages
paid to tipped employees. paid to tipped employees.
141 SBA, “Business Loan Program T emporary Changes; Paycheck Protection Program,” 85 141 SBA, “Business Loan Program T emporary Changes; Paycheck Protection Program,” 85 Federal Register 20813- 20813-
20814, April 15, 2020. 20814, April 15, 2020.
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duration of the President invoking the Defense Production Act in response to duration of the President invoking the Defense Production Act in response to
COVID-19; and COVID-19; and
 provides SBA Emergency Injury Disaster Loan (EIDL) enhancements during the  provides SBA Emergency Injury Disaster Loan (EIDL) enhancements during the
covered period of January 31, 2020, through December 31, 2020, including covered period of January 31, 2020, through December 31, 2020, including
 expanding eligibility beyond currently eligible smal businesses, private  expanding eligibility beyond currently eligible smal businesses, private
nonprofit organizations, and smal agricultural cooperatives, to include nonprofit organizations, and smal agricultural cooperatives, to include
startups, cooperatives, and eligible ESOPs (employee stock ownership plans) startups, cooperatives, and eligible ESOPs (employee stock ownership plans)
with not more than 500 employees, sole proprietors, and independent with not more than 500 employees, sole proprietors, and independent
contractors; contractors;
 authorizing the SBA Administrator, in response to economic injuries caused  authorizing the SBA Administrator, in response to economic injuries caused
by COVID-19, to by COVID-19, to
 waive the no credit available elsewhere requirement,  waive the no credit available elsewhere requirement,
 approve an applicant based solely on their credit score,  approve an applicant based solely on their credit score,
 not require applicants to submit a tax return or tax return transcript for  not require applicants to submit a tax return or tax return transcript for
approval, approval,
 waive any rules related to the personal guarantee on advances and loans  waive any rules related to the personal guarantee on advances and loans
of not more than $200,000, of not more than $200,000,
 waive the requirement that the applicant needs to be in business for the  waive the requirement that the applicant needs to be in business for the
one-year period before the disaster declaration, except that no waiver one-year period before the disaster declaration, except that no waiver
may be made for a business that was not in operation on January 31, may be made for a business that was not in operation on January 31,
2020; 2020;
 authorizing the SBA Administrator, through December 31, 2020, to provide  authorizing the SBA Administrator, through December 31, 2020, to provide
up to $10,000 as an advance payment in the amount requested within three up to $10,000 as an advance payment in the amount requested within three
days after receiving an EIDL application from an eligible entity. Applicants days after receiving an EIDL application from an eligible entity. Applicants
are not required to repay the advance payment, even if subsequently denied are not required to repay the advance payment, even if subsequently denied
an EIDL loan. The funds may be used for any eligible EIDL expense, an EIDL loan. The funds may be used for any eligible EIDL expense,
including, among other expenses, providing paid sick leave to employees including, among other expenses, providing paid sick leave to employees
unable to work due to COVID-19, maintaining payroll to retain employees, unable to work due to COVID-19, maintaining payroll to retain employees,
and meeting increased costs to obtain materials due to supply chain and meeting increased costs to obtain materials due to supply chain
disruptions. The SBA limited EIDL-advance payments to $1,000 per disruptions. The SBA limited EIDL-advance payments to $1,000 per
employee, up to a maximum of $10,000; and employee, up to a maximum of $10,000; and
 appropriating an additional $10 bil ion for EIDL assistance.  appropriating an additional $10 bil ion for EIDL assistance.
The Paycheck Protection Program and Health Care Enhancement
Act (P.L. 116-139)
 increases the SBA’s lending authorization under Section 7(a) of the Smal  increases the SBA’s lending authorization under Section 7(a) of the Smal
Business Act from $349 bil ion during the covered period to $659 bil ion; Business Act from $349 bil ion during the covered period to $659 bil ion;
 requires that no less than $30 bil ion of this authorization amount be set aside for  requires that no less than $30 bil ion of this authorization amount be set aside for
loans issued by insured depository institutions and credit unions with loans issued by insured depository institutions and credit unions with
consolidated assets of $10 bil ion to $50 bil ion; consolidated assets of $10 bil ion to $50 bil ion;
 requires that no less than $30 bil ion of this authorization amount be set aside for  requires that no less than $30 bil ion of this authorization amount be set aside for
loans issued by community financial institutions (including community loans issued by community financial institutions (including community
development financial institutions (CDFIs), minority depository institutions, development financial institutions (CDFIs), minority depository institutions,
SBA-certified development companies, and SBA microloan intermediaries), and SBA-certified development companies, and SBA microloan intermediaries), and
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insured depository institutions and credit unions with consolidated assets less insured depository institutions and credit unions with consolidated assets less
than $10 bil ion; than $10 bil ion;
 increases the PPP appropriation amount from $349 bil ion to $670.335 bil ion;  increases the PPP appropriation amount from $349 bil ion to $670.335 bil ion;
 appropriates an additional $50 bil ion for EIDL loans;  appropriates an additional $50 bil ion for EIDL loans;
 appropriates an additional $10 bil ion for Emergency EIDL grants;  appropriates an additional $10 bil ion for Emergency EIDL grants;
 appropriates an additional $2.1 bil ion for the SBA’s salaries and expenses  appropriates an additional $2.1 bil ion for the SBA’s salaries and expenses
account (to remain available until September 30, 2021); and account (to remain available until September 30, 2021); and
 provides agricultural enterprises eligibility for Emergency EIDL grants and EIDL  provides agricultural enterprises eligibility for Emergency EIDL grants and EIDL
loans during the covered period (January 31, 2020 through December 31, 2020). loans during the covered period (January 31, 2020 through December 31, 2020).
The Paycheck Protection Program Flexibility Act (P.L. 116-142)
 extends the PPP loan forgiveness covered period from 8 weeks after the loan’s  extends the PPP loan forgiveness covered period from 8 weeks after the loan’s
origination date to the earlier of 24 weeks after the loan’s origination date or origination date to the earlier of 24 weeks after the loan’s origination date or
December 31, 2020; December 31, 2020;
 provides borrowers that received a PPP loan prior to the enactment date (June 5,  provides borrowers that received a PPP loan prior to the enactment date (June 5,
2020) the option to use the CARES Act’s loan forgiveness covered period of 2020) the option to use the CARES Act’s loan forgiveness covered period of
eight weeks after the loan’s origination date; eight weeks after the loan’s origination date;
 replaces the 75%/25% rule on the use of PPP loan proceeds for loan forgiveness  replaces the 75%/25% rule on the use of PPP loan proceeds for loan forgiveness
purposes with the requirement that at least 60% of the loan proceeds be used for purposes with the requirement that at least 60% of the loan proceeds be used for
payroll costs and up to 40% be used for covered mortgage interest, rent, and payroll costs and up to 40% be used for covered mortgage interest, rent, and
utility payments;142 utility payments;142
 provides borrowers a “safe harbor” from the loan forgiveness rehiring  provides borrowers a “safe harbor” from the loan forgiveness rehiring
requirement if the borrower is unable to rehire an individual who was an requirement if the borrower is unable to rehire an individual who was an
employee of the recipient on or before February 15, 2020, or if the borrower can employee of the recipient on or before February 15, 2020, or if the borrower can
demonstrate an inability to hire similarly qualified employees on or before demonstrate an inability to hire similarly qualified employees on or before
December 31, 2020; December 31, 2020;
 establishes a minimum PPP loan maturity of five years for loans made on or after  establishes a minimum PPP loan maturity of five years for loans made on or after
the date of enactment; the date of enactment;
 extends the PPP loan deferral period from six months (under SBA regulations) to  extends the PPP loan deferral period from six months (under SBA regulations) to
the date that the SBA remits the borrower’s loan forgiveness amount to the the date that the SBA remits the borrower’s loan forgiveness amount to the
lender or, if the borrower does not apply for loan forgiveness, 10 months after the lender or, if the borrower does not apply for loan forgiveness, 10 months after the
end of the borrower’s loan forgiveness covered period; and end of the borrower’s loan forgiveness covered period; and
 eliminates the exception in the CARES Act preventing taxpayers who receive  eliminates the exception in the CARES Act preventing taxpayers who receive
PPP loan forgiveness from delaying the payment of employer payroll taxes.143 PPP loan forgiveness from delaying the payment of employer payroll taxes.143
The Heroes Act (H.R. 6800)
H.R. 6800, would, among other provisions, H.R. 6800, would, among other provisions,
 expand the PPP loan covered period from June 30, 2020, to December 31, 2020;  expand the PPP loan covered period from June 30, 2020, to December 31, 2020;

142 If a borrower uses less than 60% of the PPP loan amount for payroll costs during the forgiveness covered 142 If a borrower uses less than 60% of the PPP loan amount for payroll costs during the forgiveness covered
period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60% of the loan period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60% of the loan
forgiveness amount having been used for payroll costs. forgiveness amount having been used for payroll costs.
143 See FAQs 3 and 4 in IRS, “Deferral of Employment Tax Deposits and Payments T hrough December 31, 2020,” at 143 See FAQs 3 and 4 in IRS, “Deferral of Employment Tax Deposits and Payments T hrough December 31, 2020,” at
https://www.irs.gov/newsroom/deferral-of-employment -tax-deposits-and-payments-through-december-31-2020. https://www.irs.gov/newsroom/deferral-of-employment -tax-deposits-and-payments-through-december-31-2020.
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 extend PPP eligibility to al 501(c) nonprofit organizations of al sizes;  extend PPP eligibility to al 501(c) nonprofit organizations of al sizes;
 establish a minimum PPP loan maturity of five years;  establish a minimum PPP loan maturity of five years;
 require, as of the date of enactment, that 25% of existing PPP funds be issued to  require, as of the date of enactment, that 25% of existing PPP funds be issued to
smal businesses with 10 or fewer employees; 25% of existing funds be issued to smal businesses with 10 or fewer employees; 25% of existing funds be issued to
nonprofit organizations, with at least half of this amount going to nonprofit nonprofit organizations, with at least half of this amount going to nonprofit
organizations with not more than 500 employees; and the lesser of 25% of organizations with not more than 500 employees; and the lesser of 25% of
existing PPP funds or $10 bil ion be issued to community financial institutions, existing PPP funds or $10 bil ion be issued to community financial institutions,
such as Community Development Financial Institutions (CDFIs), SBA microloan such as Community Development Financial Institutions (CDFIs), SBA microloan
intermediaries, and SBA-certified development companies; intermediaries, and SBA-certified development companies;
 establish technical assistance grants for smal community financial institutions  establish technical assistance grants for smal community financial institutions
with assets of less than $10 bil ion; with assets of less than $10 bil ion;
 bifurcate the SBA’s lending authority for the 7(a) and PPP programs;  bifurcate the SBA’s lending authority for the 7(a) and PPP programs;
 increase the SBA’s 7(a) loan authorization amount from $30 bil ion to $75 bil ion  increase the SBA’s 7(a) loan authorization amount from $30 bil ion to $75 bil ion
for FY2020; for FY2020;
 provide SCORE and veterans business outreach centers eligibility for $10 mil ion  provide SCORE and veterans business outreach centers eligibility for $10 mil ion
each from the CARES Act’s $265 mil ion entrepreneurial development resource each from the CARES Act’s $265 mil ion entrepreneurial development resource
partners grant program; partners grant program;
 amend the PPP loan forgiveness by extending the 8-week period to the earlier of  amend the PPP loan forgiveness by extending the 8-week period to the earlier of
24 weeks or December 31, 2020, mandate loan forgiveness data collection and 24 weeks or December 31, 2020, mandate loan forgiveness data collection and
reporting, and eliminate the 75%/25% rule on the use of loan proceeds; reporting, and eliminate the 75%/25% rule on the use of loan proceeds;
 provide borrowers a “safe harbor” from the loan forgiveness rehiring requirement  provide borrowers a “safe harbor” from the loan forgiveness rehiring requirement
if the borrower is unable to rehire an individual who was an employee of the if the borrower is unable to rehire an individual who was an employee of the
recipient on or before February 15, 2020, or if the borrower can demonstrate an recipient on or before February 15, 2020, or if the borrower can demonstrate an
inability to hire similarly qualified employees on or before December 31, 2020; inability to hire similarly qualified employees on or before December 31, 2020;
 al ow certain previously incarcerated individuals to be approved for PPP and  al ow certain previously incarcerated individuals to be approved for PPP and
SBA disaster loans; SBA disaster loans;
 temporarily increase, for FY2020, the 7(a) loan program guaranty from up to  temporarily increase, for FY2020, the 7(a) loan program guaranty from up to
75% for loans with an outstanding loan balance exceeding $150,000, and 85% 75% for loans with an outstanding loan balance exceeding $150,000, and 85%
for loans with an outstanding loan balance of $150,000 or less, to 90% of the for loans with an outstanding loan balance of $150,000 or less, to 90% of the
outstanding loan balance; outstanding loan balance;
 temporarily increase, through December 31, 2020, the SBAExpress loan guaranty  temporarily increase, through December 31, 2020, the SBAExpress loan guaranty
from not more than 50% of the outstanding loan balance to not more than 90% of from not more than 50% of the outstanding loan balance to not more than 90% of
the outstanding loan balance on loans up to $350,000, and not more than 75% of the outstanding loan balance on loans up to $350,000, and not more than 75% of
the outstanding loan balance on loans greater than $350,000; the outstanding loan balance on loans greater than $350,000;
 temporarily reduce, for FY2020, 7(a) and 504/CDC fees to the maximum extent  temporarily reduce, for FY2020, 7(a) and 504/CDC fees to the maximum extent
possible given available appropriations; temporarily increase, for FY2020, the possible given available appropriations; temporarily increase, for FY2020, the
maximum 7(a) loan amount from $5 mil ion to $10 mil ion and the maximum maximum 7(a) loan amount from $5 mil ion to $10 mil ion and the maximum
504/CDC loan amount from $5.5 mil ion to $10 mil ion; and permanently 504/CDC loan amount from $5.5 mil ion to $10 mil ion; and permanently
increase the 504/CDC maximum loan amount for smal manufacturers from $5.5 increase the 504/CDC maximum loan amount for smal manufacturers from $5.5
mil ion to $10 mil ion; mil ion to $10 mil ion;
 eliminate the exception in the CARES Act preventing taxpayers who receive PPP  eliminate the exception in the CARES Act preventing taxpayers who receive PPP
loan forgiveness from delaying the payment of employer payroll taxes; loan forgiveness from delaying the payment of employer payroll taxes;
 authorize, for each of FY2021-FY2025, $80 mil ion for Microloan technical  authorize, for each of FY2021-FY2025, $80 mil ion for Microloan technical
assistance grants and $110 mil ion for Microloan; and authorize to be assistance grants and $110 mil ion for Microloan; and authorize to be
appropriated during FY2020, to remain available until expended, $50 mil ion for appropriated during FY2020, to remain available until expended, $50 mil ion for
Microloan technical assistance grants and $7 mil ion for Microloans; Microloan technical assistance grants and $7 mil ion for Microloans;
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 appropriate $500 mil ion for fee reductions and guaranty and maximum loan  appropriate $500 mil ion for fee reductions and guaranty and maximum loan
amount increases; and amount increases; and
 appropriate $10 bil ion for Emergency EIDL grants.  appropriate $10 bil ion for Emergency EIDL grants.
The Continuing Small Business Recovery and Paycheck Protection
Program Act (S. 4321)
S. 4321 would, among other provisions, S. 4321 would, among other provisions,
 extend the PPP loan covered period from August 8, 2020, to December 31, 2020,  extend the PPP loan covered period from August 8, 2020, to December 31, 2020,
and reduce the maximum PPP loan amount from $10 mil ion to $2 mil ion; and reduce the maximum PPP loan amount from $10 mil ion to $2 mil ion;
 expand PPP forgivable expenses to include covered operations expenditures (e.g.,  expand PPP forgivable expenses to include covered operations expenditures (e.g.,
software, cloud computing, and other human resources and accounting needs), software, cloud computing, and other human resources and accounting needs),
property damages due to public disturbances that occurred during 2020 (not property damages due to public disturbances that occurred during 2020 (not
covered by insurance or other compensation), covered supplier costs essential to covered by insurance or other compensation), covered supplier costs essential to
the recipient’s current operations, and covered worker protection expenditures to the recipient’s current operations, and covered worker protection expenditures to
comply with federal health and safety guidelines related to COVID-19; comply with federal health and safety guidelines related to COVID-19;
 al ow borrowers to select a preferred 8-week period after the loan’s origination  al ow borrowers to select a preferred 8-week period after the loan’s origination
date through December 31, 2020, for determining loan forgiveness; date through December 31, 2020, for determining loan forgiveness;
 create simplified loan forgiveness application processes for loans  create simplified loan forgiveness application processes for loans ~~under~~of $150,000 $150,000
or less and for loans and for loans ~~between~~of $150,000 $150,000 ~~and~~to $2 mil ion. The SBA $2 mil ion. The SBA would retain the right would retain the right
to review and audit these loans for fraud. Reporting of demographic information to review and audit these loans for fraud. Reporting of demographic information
would be optional; would be optional;
 expand eligibility to include certain 501(c)(6) organizations, including Chambers  expand eligibility to include certain 501(c)(6) organizations, including Chambers
of Commerce and Destination Marketing Organizations, that have 300 or fewer of Commerce and Destination Marketing Organizations, that have 300 or fewer
employees, do not receive more than 10% of their receipts from lobbying, and employees, do not receive more than 10% of their receipts from lobbying, and
whose lobbying activities do not comprise more than 10% of their total activities. whose lobbying activities do not comprise more than 10% of their total activities.
Recipients cannot use any loan proceeds for lobbying activities; Recipients cannot use any loan proceeds for lobbying activities;
 al ow second PPP “draw” loans through December 31, 2020, for PPP borrowers  al ow second PPP “draw” loans through December 31, 2020, for PPP borrowers
that meet the SBA’s revenue standard, if applicable, have not more than 300 that meet the SBA’s revenue standard, if applicable, have not more than 300
employees, and can demonstrate at least a 50% reduction in gross receipts in the employees, and can demonstrate at least a 50% reduction in gross receipts in the
first or second quarter of 2020 relative to the same 2019 quarter. Several types of first or second quarter of 2020 relative to the same 2019 quarter. Several types of
PPP eligible entities, such as publicly traded companies, would be ineligible for a PPP eligible entities, such as publicly traded companies, would be ineligible for a
second loan. The maximum loan size would equal 2.5 times average monthly second loan. The maximum loan size would equal 2.5 times average monthly
payroll costs, up to $2 mil ion (not more than $10 mil ion in the aggregate). Full payroll costs, up to $2 mil ion (not more than $10 mil ion in the aggregate). Full
loan forgiveness would be based on a 60/40 cost al ocation between payroll and loan forgiveness would be based on a 60/40 cost al ocation between payroll and
eligible nonpayroll costs; eligible nonpayroll costs;
 establish a specific loan calculation for farmers and ranchers who operate as a  establish a specific loan calculation for farmers and ranchers who operate as a
sole proprietor, independent contractor, or self-employed individual and al ow sole proprietor, independent contractor, or self-employed individual and al ow
Farm Credit System Institutions to make PPP loans; Farm Credit System Institutions to make PPP loans;
 increase the PPP authorization amount from $659 bil ion to $749 bil ion, rescind  increase the PPP authorization amount from $659 bil ion to $749 bil ion, rescind
$100 bil ion from the SBA’s business loan program account, and appropriate an $100 bil ion from the SBA’s business loan program account, and appropriate an
additional $190 bil ion for the cost of PPP and PPP second draw loans. In additional $190 bil ion for the cost of PPP and PPP second draw loans. In
funding, $25 bil ion would be set-aside for entities employing 10 or fewer funding, $25 bil ion would be set-aside for entities employing 10 or fewer
employees and $10 bil ion would be set-aside for community lenders; employees and $10 bil ion would be set-aside for community lenders;
 appropriate $57.7 bil ion to support up to $100 bil ion in lending for a new 7(a)  appropriate $57.7 bil ion to support up to $100 bil ion in lending for a new 7(a)
Recovery Sector Loan program for seasonal businesses and businesses located in Recovery Sector Loan program for seasonal businesses and businesses located in
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low-income census tracts that meet specified size standards (e.g., one of the low-income census tracts that meet specified size standards (e.g., one of the
requirements is that seasonal businesses have no more than 250 employees and requirements is that seasonal businesses have no more than 250 employees and
non-seasonable businesses have no more than 500 employees) and can non-seasonable businesses have no more than 500 employees) and can
demonstrate at least a 50% reduction in gross revenue in the first or second demonstrate at least a 50% reduction in gross revenue in the first or second
quarter of 2020 relative to the same 2019 quarter. Loans would be up to twice the quarter of 2020 relative to the same 2019 quarter. Loans would be up to twice the
borrower’s annual revenue, capped at $10 mil ion, have a maturity of up to 20 borrower’s annual revenue, capped at $10 mil ion, have a maturity of up to 20
years, and a subsidized interest rate charged to the borrower of 1%. The SBA years, and a subsidized interest rate charged to the borrower of 1%. The SBA
would provide lenders a 100% loan guarantee, the credit elsewhere requirement would provide lenders a 100% loan guarantee, the credit elsewhere requirement
and SBA fees would be waived, and principal and interest payments would be and SBA fees would be waived, and principal and interest payments would be
deferred for the first two years of the loan. The SBA would be authorized to grant deferred for the first two years of the loan. The SBA would be authorized to grant
an additional two years of deferment. Loan proceeds could be used for working an additional two years of deferment. Loan proceeds could be used for working
capital, acquisition of fixed assets, and refinancing existing indebtedness. The capital, acquisition of fixed assets, and refinancing existing indebtedness. The
loans would be available through December 31, 2020. loans would be available through December 31, 2020.
 appropriate $10 bil ion for a new Smal Business Growth and Domestic  appropriate $10 bil ion for a new Smal Business Growth and Domestic
Production Investment Facility under the SBA’s Smal Business Investment Production Investment Facility under the SBA’s Smal Business Investment
Company (SBIC) program to provide funds to firms that invest in businesses Company (SBIC) program to provide funds to firms that invest in businesses
which meet the revenue loss requirements for PPP, are a manufacturing business, which meet the revenue loss requirements for PPP, are a manufacturing business,
or are located in a smal business low-income census tract, as defined in this act. or are located in a smal business low-income census tract, as defined in this act.
At least 50% of the investments by the participating investment company must be At least 50% of the investments by the participating investment company must be
in eligible smal businesses. The program’s goals are to “improve the recovery of in eligible smal businesses. The program’s goals are to “improve the recovery of
eligible smal business concerns from the COVID-19 pandemic, increase eligible smal business concerns from the COVID-19 pandemic, increase
resiliency in the manufacturing supply chain of eligible smal business concerns, resiliency in the manufacturing supply chain of eligible smal business concerns,
and increase the economic development of smal business low-income census and increase the economic development of smal business low-income census
tracts.” The SBA would purchase bonds that include equity features from a tracts.” The SBA would purchase bonds that include equity features from a
participating SBIC with a term of at least 15 years and an interest rate of up to participating SBIC with a term of at least 15 years and an interest rate of up to
2%. The SBA would be authorized to directly commit or commit to purchase 2%. The SBA would be authorized to directly commit or commit to purchase
bonds from an SBIC of an amount up to the lesser of twice the SBIC’s regulatory bonds from an SBIC of an amount up to the lesser of twice the SBIC’s regulatory
capital or $200 mil ion. The SBA would receive a share of any profits and the capital or $200 mil ion. The SBA would receive a share of any profits and the
SBA’s share would be deposited into a fund and made available for additional SBA’s share would be deposited into a fund and made available for additional
commitments. commitments.
The (updated) Heroes Act (H.R. 925)
The (updated) Heroes Act (H.R. 925) would, among other provisions, The (updated) Heroes Act (H.R. 925) would, among other provisions,
 al ow PPP borrowers that have less than 200 employees and can document  al ow PPP borrowers that have less than 200 employees and can document
quarterly revenue losses of at least 25% to receive a second PPP loan of up to $2 quarterly revenue losses of at least 25% to receive a second PPP loan of up to $2
mil ion; mil ion;
 expand the list of al owable uses of proceeds and loan forgiveness to include  expand the list of al owable uses of proceeds and loan forgiveness to include
personal protective equipment, supplier costs, and costs related to property personal protective equipment, supplier costs, and costs related to property
damage from public disturbances; damage from public disturbances;
 exclude publicly traded entities from being eligible for PPP loans;  exclude publicly traded entities from being eligible for PPP loans;
 exclude businesses that are 51% or more foreign owned, controlled, and managed  exclude businesses that are 51% or more foreign owned, controlled, and managed
from receiving a PPP loan; from receiving a PPP loan;
 clarify that prior to enactment the current “no credit elsewhere test” remains in  clarify that prior to enactment the current “no credit elsewhere test” remains in
place for PPP loans, but that going forward the 7(a) credit elsewhere test would place for PPP loans, but that going forward the 7(a) credit elsewhere test would
apply for PPP loans greater than $350,000; and apply for PPP loans greater than $350,000; and
 prevent the SBA from imposing an EIDL loan cap below the program’s statutory  prevent the SBA from imposing an EIDL loan cap below the program’s statutory
limit of $2 mil ion and al ow current EIDL borrowers to modify their loans to limit of $2 mil ion and al ow current EIDL borrowers to modify their loans to
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seek additional funds up to the $2 mil ion maximum loan size. Due to high seek additional funds up to the $2 mil ion maximum loan size. Due to high
demand, the SBA currently caps COVID-19-related EIDL at $150,000. demand, the SBA currently caps COVID-19-related EIDL at $150,000.
In addition, the bil would appropriate In addition, the bil would appropriate
 $50 bil ion for Emergency EIDL Advance Payment grants, including $40 bil ion  $50 bil ion for Emergency EIDL Advance Payment grants, including $40 bil ion
for a new Lifeline Grant program targeting smal businesses with not more than for a new Lifeline Grant program targeting smal businesses with not more than
50 employees and that have suffered specified economic loss (related to 50 employees and that have suffered specified economic loss (related to
reductions in gross receipts) of not less than 30%; reductions in gross receipts) of not less than 30%;
 $8 bil ion to provide 12 months of payment, interest debt, and associated fee  $8 bil ion to provide 12 months of payment, interest debt, and associated fee
relief for SBA physical disaster loans in a regular servicing status and EIDL loans relief for SBA physical disaster loans in a regular servicing status and EIDL loans
approved prior to February 15, 2020, and in a regular servicing status; approved prior to February 15, 2020, and in a regular servicing status;
 $1 bil ion for a new Micro-SBIC program to provide financing to micro-SBICs  $1 bil ion for a new Micro-SBIC program to provide financing to micro-SBICs
of up to 50% of private capital raised, not to exceed $25 mil ion or, in the case of of up to 50% of private capital raised, not to exceed $25 mil ion or, in the case of
a micro-SBIC owned by persons who also own a SBIC licensed under section a micro-SBIC owned by persons who also own a SBIC licensed under section
301, up to 100% of private capital raised, not to exceed $50 mil ion; 301, up to 100% of private capital raised, not to exceed $50 mil ion;
 $1 bil ion to increase 7(a) loan guarantees from 75% and 85%, depending on the  $1 bil ion to increase 7(a) loan guarantees from 75% and 85%, depending on the
amount borrowed, to 90% for al 7(a) loans during FY2021, increase the amount borrowed, to 90% for al 7(a) loans during FY2021, increase the
SBAExpress loan guarantee from 50% to 75% for SBAExpress loans of SBAExpress loan guarantee from 50% to 75% for SBAExpress loans of
$350,000 or less during FY2021, and reduce fees to the maximum extent possible $350,000 or less during FY2021, and reduce fees to the maximum extent possible
on 7(a) and 504/CDC loans during FY2021; on 7(a) and 504/CDC loans during FY2021;
 $57 mil ion for Microloan program enhancements, including $50 mil ion for  $57 mil ion for Microloan program enhancements, including $50 mil ion for
Microloan technical assistance grants and $7 mil ion in loan credit subsidies to Microloan technical assistance grants and $7 mil ion in loan credit subsidies to
support up to $72 mil ion in additional Microloan lending; support up to $72 mil ion in additional Microloan lending;
 $15 bil ion for a one-year, state and local government smal business local relief  $15 bil ion for a one-year, state and local government smal business local relief
grant program within the Department of the Treasury. The program would grant program within the Department of the Treasury. The program would
provide states, localities, and Indian Tribes grants to create a smal business provide states, localities, and Indian Tribes grants to create a smal business
emergency fund. The fund would support loans and other assistance to nonprofit emergency fund. The fund would support loans and other assistance to nonprofit
organizations and businesses with 20 or fewer employees (50 or fewer employees organizations and businesses with 20 or fewer employees (50 or fewer employees
if located in a low-income community) that have experienced a loss of revenue if located in a low-income community) that have experienced a loss of revenue
due to COVID-19; and due to COVID-19; and
 $10 bil ion for a SBA grant program for independent live venue operators,  $10 bil ion for a SBA grant program for independent live venue operators,
producers, promoters, or talent representatives to address the economic effects of producers, promoters, or talent representatives to address the economic effects of
COVID-19 on certain live venues. An initial grant of up to $12 mil ion dollars, COVID-19 on certain live venues. An initial grant of up to $12 mil ion dollars,
and a supplemental grant that is equal to 50% of the initial grant, would be and a supplemental grant that is equal to 50% of the initial grant, would be
available to cover specified expenses, such as payroll costs, rent, utilities, and available to cover specified expenses, such as payroll costs, rent, utilities, and
personal protective equipment. personal protective equipment.
Author Information

Robert Jay Dilger Robert Jay Dilger
Sean Lowry Sean Lowry
Senior Specialist in American National Government Analyst in Public Finance Senior Specialist in American National Government Analyst in Public Finance

Bruce R. Lindsay Bruce R. Lindsay

~~Analyst~~Specialist in American National Government in American National Government

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Congressional Research Service Congressional Research Service
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