A Senate infrastructure measure unveiled this week would take $ 31 billion out of a Covid disaster loan program for businesses.
The Economic Disaster Lending Program was one of the mechanisms used by Congress to help struggling businesses stay afloat during the pandemic.
It was initially plagued by issues such as delays and reductions in maximum loan amounts amid high demand, frustrating cash-hungry business owners during closings.
The Infrastructure Investment and Jobs Act – a $ 1,000 billion bipartisan bill unveiled on Sunday – would permanently cancel the $ 13.5 billion disaster loan program.
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Unlike the Paycheck Protection Program, which is primarily intended to support employee salaries, EIDL program low interest loans are for operating costs such as health care benefits, rent, utilities and fixed debt payments.
The Small Business Administration has disbursed $ 236 billion in disaster loans to 3.8 million businesses, according to federal data through July 29.
Senate infrastructure legislation would also recover $ 17.6 billion from an affiliate program providing grants of up to $ 15,000 to hard-hit businesses in low-income communities.
The program, Targeted EIDL Advance, has paid out $ 2.6 billion to 314,000 business owners, according to the SBA.
An earlier version, created by the CARES Act, was available to a wider range of entrepreneurs, but exhausted its $ 20 billion in funding by July 2020.
Cancellation of funds would not affect balances already committed by the SBA, which administers the programs, if the infrastructure measure is successful.
The infrastructure bill allocates money to roads, bridges, public transport, broadband, rail, water and airports across the country. Majority Leader Senator Chuck Schumer, DN.Y., hopes to pass it before a month-long suspension slated for August 9.
The bill also seeks to increase revenues by ending a tax break for businesses during a pandemic – the employee retention credit – three months earlier.