FranFund_horizontal_white

 

Small Business Debt Relief Extension Act

 

What Would the Extension Act Do?

If passed, the Small Business Debt Relief Extension Act would extend the six (6) months of principal and interest loan payments on all pre-existing, deferred, and new SBA loans through at least February 2021. FranFund has already reached out to the International Franchise Association (IFA) and other highly influential advocates to see how we can help push this through, and we encourage you to do the same!

The Small Business Debt Relief Extension Act would: 

  • Extend debt relief payments for all small businesses with an SBA-backed loan through February 2021. Therefore, if you already received your full loan amount disbursement, you can qualify for this.
  • Provide an additional seven months of debt relief for highly vulnerable businesses that operate in the sectors hardest hit by the pandemic: educational services; arts, entertainment, and recreation; accommodation and food services; and charter buses.
  • Extend the availability of debt relief on new SBA loans through September 2021. This would provide an ongoing incentive for small business growth and job creation in all sectors.
  • Ensure debt relief benefit is associated with no tax liability for any participating business.
  • Improve program integrity and transparency, by increasing required SBA reporting to Congress and communication with borrowers.
  • Require no new spending by Congress, as it will draw upon funds already appropriated under the CARES Act.

It’s important to remember these covered payments kick-in after the loan has been fully disbursed and is in regular servicing with the bank. 

 

Status Updates

There’s already a buzz of this having a good chance of enactment, but as always with the government, there is no guarantee of approval or turnround time. We will track the progress and post updates here.

9.24.20 - Senate Introduced the Small Business Debt Relief Extension Act

10.5.20 - Last week, the House Democrats released a new proposal, an updated version of HEROES Act, that lays out their updated approach for the next, much-anticipated COVID-19 relief package. This legislation was released on Monday evening, and last night the House voted and passed it on a party line vote. The HEROES Act proposes extending PPP funding, adding SBA loan incentives and includes the following about SBA Debt Relief (aka 1112):

  • Extends principal and interest payments for borrowers to either 6, 12, or 18 months depending on certain loan criteria
  • Clarifies that borrowers are eligible for covered payments based on the date the loan was approved by SBA, not when it was fully disbursed

There is no guarantee a final decision from Senate will be reached before the general election, but we are hopeful. For full details, here is a link to the House language.

 

 

About FranFund

Recognized as a top franchise funding supplier by Entrepreneur for the last three years in a row, FranFund designs smart all-in-one funding plans that grow with your franchise. No matter where you are in your journey of business ownership – whether you are considering leaving your current job to start a new venture or if you are looking to expand your existing operation – we are here to help. Founded by a veteran in the franchise industry with first-hand experience as a franchise owner, franchise developer, and new franchise creator, FranFund specializes in funding solutions for franchisees.