The agency is expected to issue guidance on how lenders move forward within a week of Congress passing the bill and the president signing it, according to Chilcott and Stephen Keen, who handles congressional relations for the Independent Community Bankers of America.

Among major question marks: how the secondary market would work if banks want to sell off the loans to others; whether the federal government would have to purchase some of the notes itself; and which financial technology lenders can participate.

Bill Koontz, an SBA spokesman, said the agency is scrambling to keep up with demand for its existing disaster loan program to help businesses, even as its site has been down repeatedly because of the high demand. He declined to comment on pending legislation until it gets passed.

“They have at least promised a very expedited process,” said Sandy Baruah, a former SBA administrator who helped steer the agency’s response to the 2008 financial crisis. “If they’re able to deliver on that promise, I think it could have a real positive impact on mitigating the economic damage and the individual damage to small businesses, and those who work for them.”

There are two major programs in the bill targeted at mom-and-pop shops: one is $10 billion for grants of as much as $10,000 per business to cover expenses. The government would advance the money within three days to businesses applying for an SBA disaster loan.

The $350 billion SBA loan program provides a lot more -- up to $10 million per firm -- and companies can get the debt written off under certain conditions, such as retaining employees and keeping salaries above a certain level, and rehiring those already let go.

Jobs At Risk
On the ground, small businesses may be reluctant to take on debt at a time when the pandemic is still surging and tens of millions of Americans are under lockdown orders. Borrowing a chunk of money without knowing when -- if ever -- their business will again turn a profit is too big a risk for many owners and they may instead opt to close, said Amanda Ballantyne, national director for small business lobby group The Main Street Alliance.

Her group estimates that 84.2 million jobs are at risk of being lost amid business closures and bankruptcy.

Peter Gaetano owns a barbershop in Carmel, a town of about 30,000 in New York state. Despite operating through previous recessions, the doors shut indefinitely Saturday night when the state ordered non-essential stores closed. He says he had to let his three staff go.

“I have no answers for what I’m going to do,” said Gaetano, 41, who has two young kids. The family relies on the roughly $60,000 a year he makes for the mortgage payments and other bills.

“I have a little bit of money saved,” he said. “But if this lasts three months, then I’ll be in trouble.”


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