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.