Section 1 Short title
This Act may be cited as the “Too Small to Fail Act”.
Too Small to Fail Act
A BILL
To amend the Small Business Act to provide no interest rate loans to small businesses and non-profit entities impacted by the coronavirus (COVID-19), and for other purposes.
Sec. 2 Financial assistance to small businesses and non-profit entities
Section 7 of the Small Business Act (15 U.S.C. 636) is amended by adding at the end the following new subsection:
“(k) Coronavirus related loans
“(1) In general—The Administration shall waive the credit elsewhere requirement of subsection (a)(1) for loans to small businesses and non-profit entities affected by the coronavirus (COVID-19). Such loans shall be provided by the Administration at no interest rate.
“(2) Authorization of appropriations—For an additional amount for the “Disaster Loans Program Account” for the cost of direct loans authorized by section 7(b) of the Small Business Act and for subsidizing interest rates, $350,000,000,000, to remain available until expended, except that—
“(A) not to exceed $225,000,000 may be transferred to and merged with “Salaries and Expenses” for administrative expenses to carry out the disaster loan program authorized by section 7(b) of the Small Business Act; and
“(B) none of the funds provided under this heading may be used for indirect administrative expenses.
“(3) Emergency requirement—The amount provided under paragraph (2) is designated as an emergency requirement pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985 and the amount designated under such paragraph as an emergency requirement pursuant to such section 251(b)(2)(A)(i) shall be available only if the President subsequently so designates such amount and transmits such designation to the Congress.
“(4) Suspension of payment—The Administration is authorized to suspend the payment of any loan made under this Act to any small business or non-profit entity affected by the coronavirus (COVID-19) for a period determined by the Administration.”
Sec. 3 Emergency EIDL grants
EIDL emergency grant—
In general— During the covered period, an eligible entity that applies for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 may request that the Administrator provide an advance in the amount requested by such applicant (not to exceed $15,000) to such applicant within 3 days after the Administrator receives an application from such applicant.
Verification— Before disbursing amounts under this subsection, the Administrator shall verify that the applicant is an eligible entity.
Use of funds— An advance provided under this subsection may be used to address any allowable purpose for a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)), including—
providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;
maintaining payroll to retain employees during business disruptions or substantial slowdowns;
meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;
making rent or mortgage payments; and
repaying obligations that cannot be met due to revenue losses.
Repayment— An applicant shall not be required to repay any amounts of an advance provided under this subsection, even if subsequently denied a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)).
Unemployment grant— If an applicant that receives an advance under this subsection transfers into the loan program under section 7(a) of the Small Business Act (15 U.S.C. 636(a)), the advance amount shall be considered when determining loan forgiveness for a loan for payroll costs made under such section 7(a).
Authorization of appropriations— There is authorized to be appropriated to the Small Business Administration $10,000,000,000 to carry out this subsection.
Termination— The authority to carry out grants under this subsection shall terminate on December 31, 2020.
Definitions— In this Act—
the term “covered period” means the period beginning on January 31, 2020, and ending on December 31, 2020;
the term “eligible entity” means—
a startup with not more than 500 employees;
any individual who operates under a sole proprietorship or as an independent contractor;
a cooperative with not more than 500 employees; or
an ESOP (as defined in section 3 of the Small Business Act (15 U.S.C. 632)) with not more than 500 employees; and
the term “COVID-19” means the virus SARS–CoV–2 and the resulting disease COVID-19 or another coronavirus with pandemic potential.