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Entrepreneurial Development

A small business that has experienced, as a result of COVID–19—supply chain disruptions, including changes in—quantity and lead time, including the number of shipments of components and delays in shipments quality, including shortages in supply for quality control reasons; and technology, including a compromised payment network; staffing challenges; a decrease in gross receipts or customers; or a closure;

  • the term ‘‘resource partner’’ means—a small business development center; and a women’s business center
  • the term ‘‘small business development center’’ has the meaning given the term in section 3 the Small Business Act (15 U.S.C. 632)
  • the term ‘‘women’s business center’’ means a women’s business center described in section 29 of the Small Business Act (15 U.S.C. 656)

EDUCATION, TRAINING, AND ADVISING GRANTS

The Administration may provide financial assistance in the form of grants to resource partners to provide education, training, and advising to covered small businesses.

Grants shall be used for: 

  • education, training, and advising of covered small businesses and their employees on accessing and applying for resources provided by the Administration and other Federal resources relating to access to capital and business resiliency
  • the hazards and prevention of the transmission and communication of COVID–19 and other communicable diseases
  • the potential effects of COVID–19 on the supply chains, distribution, and sale of products of covered small business concerns and the mitigation of those effects
  • the management and practice of telework to reduce possible transmission of COVID–19
  • the management and practice of remote customer service by electronic or other means
  • the risks of and mitigation of cyber threats in remote customer service or telework practices
  • the mitigation of the effects of reduced
  • travel or outside activities on covered small businesses during COVID–19 or similar occurrences
  • any other relevant business practices necessary to mitigate the economic effects of COVID–19 or similar occurrences

GRANT DETERMINATION

SMALL BUSINESS DEVELOPMENT CENTERS

The Administration shall award 80 percent of funds authorized to carry out this subsection to small business development centers, which shall be awarded pursuant to a formula jointly developed, negotiated, and agreed upon, with full participation of both parties, between the association formed under section 21(a)(3)(A) of the Small Business Act (15 U.S.C. 648(a)(3)(A)) and the Administration.

WOMEN’S BUSINESS CENTERS

The Administration shall award 20 percent of funds authorized to carry out this subsection to women’s business centers, which shall be awarded pursuant to a process established by the Administration in consultation with recipients of assistance.

NO MATCHING FUNDS REQUIRED

Matching funds shall not be required for any grant under this subsection.

GOALS AND METRICS

Goals and metrics for the funds made available under this subsection shall be jointly developed, negotiated, and agreed upon, with full participation of both parties, between the resource partners and the Administrator, which shall take into consideration the extent of the circumstances relating to the spread of COVID–19, or similar occurrences, that affect covered small business concerns located in the areas covered by the resource partner, particularly in rural areas or economically distressed areas; and shall not restrict the activities of resource partners in responding to unique situations; and encourage resource partners to develop and provide services to covered small business concerns.

PUBLIC AVAILABILITY

The Administrator shall make publicly available the methodology by which the Administrator and resource partners jointly develop the metrics and goals.

RESOURCE PARTNER ASSOCIATION GRANTS

The Administrator may provide grants to an association or associations representing resource partners under which the association or associations shall establish a single centralized hub for COVID–19 information, which shall include:

  • online platform that consolidates resources and information available across multiple Federal agencies for small businesses related to COVID–19
  • a training program to educate resource partner counselors, members of the Service Corps of Retired Executives established under section 8(b)(1)(B) of the Small Business Act 21 (15 U.S.C. 637(b)(1)(B)), and counselors at veterans business outreach centers described in section 32 of the Small Business Act (15 U.S.C. 657b) on the resources and information described in subparagraph (A).

GOALS AND METRICS

For the funds made available under this subsection shall be jointly developed, negotiated, and agreed upon, with full participation of both parties, between the association or associations receiving a grant under this subsection and the Administrator.

REPORT

Not later than 6 months after the date of enactment of this Act, and annually thereafter, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report that describes with respect to the initial year covered by the report the programs and services developed and provided by the Administration and resource partners the initial efforts to provide those services under subsection (b) the online platform and training developed and provided by the Administration and the association or associations under subsection and with respect to the subsequent years covered by the report with respect to the grant program efforts of the Administrator and resource partners to develop services to assist covered small businesses which address:

The challenges faced by owners of covered small business concerns in accessing services provided by the Administration and resource partners which reflects:

  • The number of unique covered small business concerns that were served by the Administration and resource partners.

Other relevant outcome performance data with respect to covered small businesses,

  • the number of employees affected
  • the effect on sales
  • the disruptions of supply chains
  • the efforts made by the Administration and resource partners to mitigate these effects

With respect to the grant program the efforts of the Administrator and the association or associations to develop and evolve:  

  • online resource for small businesses
  • a training program for resource partner counselors, including the number of counselors trained

WAIVER OF MATCHING FUNDS REQUIREMENT UNDER THE WOMEN’S BUSINESS CENTER PROGRAM

During the 3-month period beginning on the date of enactment of this Act, the requirement relating to obtaining cash contributions from non-Federal sources under section 29(c)(1) of the Small Business Act (15 U.S.C. 8 656(c)(1)) is waived for any recipient of assistance under such section 29.

LOAN FORGIVENESS

The term ‘‘covered loan’’ means a loan guaranteed under paragraph (36) of section 7(a) of the

Small Business Act (15 U.S.C. 636(a)), as added by section 1102;

The term ‘‘covered mortgage obligation’’ means any indebtedness or debt instrument incurred

in the ordinary course of business that

is a liability of the borrower

is a mortgage on real or personal property

was incurred before February 15, 2020

the term ‘‘covered period’’ means the 8-week period beginning on the date of the origination of a covered loan

the term ‘‘covered rent obligation’’ means rent obligated under a leasing agreement in force before February 15, 2020

the term ‘‘covered utility payment’’ means payment for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020

the term ‘‘eligible recipient’’ means the recipient of a covered loan

the term ‘‘expected forgiveness amount’’ means the amount of principal that a lender reasonably expects a borrower to expend during the covered period on the sum of any—

payroll costs;

payments of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation);

payments on any covered rent obligation; and

covered utility payments; and

the term ‘‘payroll costs’’ has the meaning given that term in paragraph (36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102 of this Act.

FORGIVENESS

An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount  equal to the sum of the following costs incurred and payments made during the covered period:

  • Payroll costs.
  • Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
  • Any payment on any covered rent obligation.
  • Any covered utility payment.

TREATMENT OF AMOUNTS FORGIVEN

Amounts which have been forgiven under this section shall be considered canceled indebtedness by a lender authorized under section 7(a) of the Small Business Act (15 U.S.C. 636(a)).

PURCHASE OF GUARANTEES

For purposes of the purchase of the guarantee for a covered loan by the Administrator, amounts which are forgiven under this section shall be treated in accordance with the procedures that are otherwise applicable to a loan guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)).

REMITTANCE

Not later than 90 days after the date on which the amount of forgiveness under this section is determined, the Administrator shall remit to the lender an amount equal to the amount of forgiveness, plus any interest accrued through the date of payment.

ADVANCE PURCHASE OF COVERED LOAN

REPORT

A lender authorized under section 7(a) of the Small Business Act (15 12 U.S.C. 636(a)), or, at the discretion of the Administrator, a third party participant in the secondary market, may, report to the Administrator an expected forgiveness amount on a covered loan or on a pool of covered loans of up

to 100 percent of the principal on the covered loan or pool of covered loans, respectively.

PURCHASE

The Administrator shall purchase the expected forgiveness amount described in subparagraph (A) as if the amount were the principal amount of a loan guaranteed under section 7(a) of the Small Business Act

24 636(a)).

TIMING

Not later than 15 days after the date on which the Administrator receives a report under subparagraph (A), the Administrator shall purchase the expected forgiveness amount under subparagraph (B) with respect to each covered loan to which the report relates.

AMOUNT MAY NOT EXCEED PRINCIPAL

The amount of loan forgiveness under this section shall not exceed the principal amount of the financing made available under the applicable covered loan.

REDUCTION BASED ON REDUCTION IN NUMBER OF EMPLOYEES

The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period;

at the election of the borrower the average number of fulltime equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019; or (bb) the average number of fulltime equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020; or

In the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient

during the period beginning on February 15, 2019 and ending on June 30, 2019.

CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.

The average number of full-time equivalent employees shall be determined by calculating the average number of full-time equivalent employees for each pay period falling within a month.

REDUCTION RELATING TO SALARY AND WAGES

The amount of loan forgiveness under this section shall be reduced by the amount of any reduction in total salary or wages of any employee described during the covered period that is in excess of 25 percent of the total salary or wages of the employee during the most recent full quarter during which the employee was employed before the covered period.

EMPLOYEES DESCRIBED

An employee described in this subparagraph is any employee who did not receive, during any single

pay period during 2019, wages or salary at an annualized rate of pay in an amount more than

$100,000.

TIPPED WORKERS

An eligible recipient with tipped employees described in section 3(m)(2)(A) of the Fair Labor Standards Act of 23 1938 (29 U.S.C. 203(m)(2) (A)) may receive forgiveness for additional wages paid to those employees.

EXEMPTION FOR RE-HIRES

In a circumstance described in subparagraph (B), the amount of loan forgiveness under this section shall be determined without regard to a reduction in the number of full-time equivalent employees of an

eligible recipient or a reduction in the salary of 1 or more employees of the eligible recipient, as

applicable, during the period beginning on February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act.

CIRCUMSTANCES

A circumstance described in this subparagraph is a circumstance in which during the period beginning on February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act, there is a reduction, as compared to February, 20 2020, in the number of full-time equivalent employees of an eligible recipient; and not later than June 30, 2020, the eligible employer has eliminated the reduction in the number of full-time equivalent employees in which during the period beginning on  February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act, there is a reduction, as compared to February 15, 2020, in the salary or wages of 1 or 10 more employees of the eligible recipient; and not later than June 30, 2020, the eligible employer has eliminated the reduction in the salary or wages of such employees; or in which the events described in clause (i) and (ii) occur.

EXEMPTIONS

The Administrator and the Secretary of the Treasury may prescribe regulations granting de minimis exemptions from the requirements under this subsection.

APPLICATION

An eligible recipient seeking loan forgiveness under this section shall submit to the lender that is servicing the covered loan an application, which shall include documentation verifying the number of fulltime equivalent employees on payroll and pay rates for the periods described in subsection (d), including—

Payroll tax filings reported to the Internal Revenue Service

State income, payroll, and unemployment insurance filings;

Documentation, including cancelled checks,

Payment receipts, transcripts of accounts, or other documents verifying payments on covered mortgage

obligations, payments on covered lease obligations, and covered utility payments;

A certification from a representative of the eligible recipient authorized to make such certifications that:

The documentation presented is true and correct; and the amount for which forgiveness is requested was used to retain employees, make interest payments on a covered mortgage obligation, make payments on a covered rent obligation, or make covered utility payments; and any other documentation the Administrator determines necessary.

PROHIBITION ON FORGIVENESS WITHOUT DOCUMENTATION

No eligible recipient shall receive forgiveness under this section without submitting to the lender

that is servicing the covered loan the documentation required under subsection (e).

DECISION

Not later than 60 days after the date on which a lender receives an application for loan forgiveness under this section from an eligible recipient, the lender shall issue a decision on the an application.

HOLD HARMLESS

If a lender has received the documentation required under this section from an eligible recipient attesting that the eligible recipient has accurately verified the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments during covered period an enforcement action may not be taken against the lender under section 47(e) of the Small Business Act (15 U.S.C. 657t(e)) relating to loan forgiveness for the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments, as the case may be; and the lender shall not be subject to any penalties by the Administrator relating to loan forgiveness for the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments, as the

case may be.

TAXABILITY

For purposes of the Internal Revenue Code of 1986, any amount which (but for this subsection) would be includible in gross income of the eligible recipient by reason of forgiveness described in subsection

(b) shall be excluded from gross income.

RULE OF CONSTRUCTION

The cancellation of  indebtedness on a covered loan under this section shall not otherwise modify the terms and conditions of the covered loan.

REGULATIONS

Not later than 30 days after the date of enactment of this Act, the Administrator shall issue guidance and regulations implementing this section.

MINORITY BUSINESS DEVELOPMENT AGENCY

DEFINITIONS

The term ‘‘Agency’’ means the Minority Business Development Agency of the Department of Commerce. The term ‘‘minority business center’’ means a Business Center of the Agency. The term ‘‘minority business enterprise’’ means a for-profit business enterprise which is not less than 51 percent owned by 1 or more socially disadvantaged individuals, as determined by the Agency and the management and daily business operations of which are controlled by 1 or more socially disadvantaged individuals, as determined by the Agency; and the term ‘‘minority chamber of commerce’’ means a chamber of commerce developed specifically to support minority business enterprises.

EDUCATION, TRAINING, AND ADVISING

GRANTS

The Agency may provide financial assistance in the form of grants to minority business centers and minority chambers of commerce to provide education, training, and advising to minority business enterprises.

USE OF FUNDS

Grants under this section shall be used for the education, training, and advising of minority business enterprises and their employees on accessing and applying for resources provided by the Agency and other Federal resources relating to: 

  • access to capital and business resiliency
  • the hazards and prevention of the transmission and communication of COVID–19 and other communicable diseases

The potential effects of COVID–19 on

  • the supply chains, distribution, and sale of products of minority business enterprises and the mitigation of those effects
  • the management and practice of telework to reduce possible transmission of COVID–19
  • the management and practice of remote customer service by electronic or other means
  • the risks of and mitigation of cyber threats in remote customer service or telework practices
  • the mitigation of the effects of reduced travel or outside activities on minority business enterprises during COVID–19 or similar occurrences
  • any other relevant business practices necessary to mitigate the economic effects of COVID–19 or similar occurrences

NO MATCHING FUNDS REQUIRED

GOALS AND METRICS

Goals and metrics for the funds made available under this section shall be jointly developed, negotiated, and agreed upon, with full participation of both parties, between the minority business centers, minority chambers of commerce, and the Agency, which shall take into consideration:

  • the extent of the circumstances relating to the spread of COVID–19, or similar occurrences, that affect minority business enterprises located in the areas covered by minority business centers and minority chambers of commerce, particularly in rural areas or economically distressed areas.
  • which generally follow the use of funds outlined in paragraph (2), but shall not restrict the activities of minority business centers and minority chambers of commerce in responding to unique situations
  • encourage minority business centers and minority chambers of commerce to develop and provide services to minority business enterprises

PUBLIC AVAILABILITY

The Agency shall make publicly available the methodology by which the Agency, minority business centers, and minority chambers of commerce jointly develop the metrics and goals described in subparagraph (A).

WAIVERS

Notwithstanding any other provision of law or regulation, the Agency may, during the 3-month period that begins on the date of enactment of this Act, waive any matching requirement imposed on a minority business center or a specialty center of the Agency under a cooperative agreement between such a center and the Agency if the applicable center is unable to raise funds, or has suffered a loss of revenue, because of the effects of COVID–19.

REMAINING COMPLIANT

Notwithstanding any provision of a cooperative agreement between the Agency and a minority business center, if, during the period beginning on the date of enactment of this Act and ending on September 30, 2021, such a center decides not to collect fees because of the economic consequences of COVID–19, the center shall be considered to be in compliance with that agreement if the center notifies the Agency with respect to that decision, which the center may provide through electronic mail; and the Agency, not later than 15 days after the date on which the center provides notice to the Agency under subparagraph (A)—confirms receipt of the notification under subparagraph (A); and accepts the decision of the center.

REPORT

Not later than 6 months after the date of enactment of this Act, and annually thereafter, the Agency shall submit to the Committee on Small Business and Entrepreneurship and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Small Business and the Committee on Energy and Commerce of the House of Representatives a report that describes with respect to the period covered by the initial report:

the programs and services developed and provided by the Agency, minority business centers, and minority chambers of commerce and the initial efforts to provide those services with respect to subsequent years covered by the report.

With respect to the grant program the efforts of the Agency, minority business centers, and minority chambers of commerce to develop services to assist minority business enterprises; the challenges faced by owners of minority business enterprises in accessing services provided by the Agency, minority business centers, and minority chambers of commerce; the number of unique minority business enterprises that were served by the Agency, minority business centers, or minority chambers of commerce; and other relevant outcome performance data with respect to minority business enterprises, including the number of employees affected, the effect on sales, the disruptions of supply chains, and the efforts made by the Agency, minority business centers, and minority chambers of  commerce to mitigate these effects .