Border closure recovery loan

(a)

Definitions

In this section:(1)

Administrator

The term Administrator means the Administrator of the Small Business Administration.(2)

Border business

The term border business means an entity eligible for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) that—(A)has its principal office located in the contiguous United States;(B)has—(i)estimated or actual annual average gross receipts less than or equal to $1,000,000; and(ii)fewer than 50 employees; (C)(i)except as provided in clauses (ii), (iii), and (iv), had gross receipts during the first, second, third, or fourth quarter in 2020 that demonstrate a reduction from the gross receipts of the entity during the same quarter in 2019; (ii)if the entity was not in business during the first or second quarter of 2019, but was in business during the third and fourth quarter of 2019, had gross receipts during the first, second, third, or fourth quarter of 2020 that demonstrate a reduction from the gross receipts of the entity during the third or fourth quarter of 2019; (iii)if the entity was not in business during the first, second, or third quarter of 2019, but was in business during the fourth quarter of 2019, had gross receipts during the first, second, third, or fourth quarter of 2020 that demonstrate a reduction from the gross receipts of the entity during the fourth quarter of 2019; or(iv)if the entity was not in business during 2019, but was in operation on February 15, 2020, had gross receipts during the second, third, or fourth quarter of 2020 that demonstrate a reduction from the gross receipts of the entity during the first quarter of 2020; and(D)is located within 25 miles of the United States border.(b)

Border closure recovery loan program

(1)

In general

The Administrator shall establish a program under which the Administrator shall make loans to border businesses directly impacted by the COVID–19 pandemic.(2)

Application

A border business desiring a loan under this subsection shall submit to the Administrator an application at such time, in such place, and containing such information as the Administrator determines necessary.(3)

Terms

(A)

Amount; Interest rate

A loan made under this subsection shall—(i)be in an amount of not more than $500,000; and (ii)have an interest rate of not more than 2 percent.(B)

Prohibited requirements

With respect to a loan made under this subsection, the Administrator shall not establish—(i)any rules related to a personal guarantee for loans of less than $200,000; or(ii)any requirement that an applicant exhaust other loan options before applying for a loan under this subsection.(4)

Use of funds

A border business that receives a loan under this subsection—(A)shall use the loan proceeds for 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—(i)providing paid sick leave to employees unable to work due to the direct effect of COVID–19;(ii)maintaining payroll to retain employees during business disruptions or substantial slowdowns;(iii)meeting increased costs to obtain materials unavailable from the original source of the border business due to interrupted supply chains;(iv)making rent or regular mortgage payments;(v)repaying obligations that cannot be met due to revenue losses; (vi)to pay for logistical expenses associated with border closures due to the COVID–19 pandemic; and(vii)to pay for improvements related to complying with public health guidelines, including personal protective equipment, signage, temporary barriers, and space heaters; and(B)may not use the loan proceeds—(i)to purchase real estate;(ii)for payments of interest or principal on any loan originated after February 15, 2020;(iii)to invest or re-lend funds;(iv)for the prepayment of any mortgage or other debt obligation;(v)for any contribution or expenditure to, or on behalf of, any political party, party committee, or candidate for elective office; or(vi)for any other use as the Administrator may prohibit. (c)

Approval and ability To repay

With respect to a loan made under subsection (b), the Administrator may—(1)approve an applicant—(A)based solely on the credit score of the applicant; or(B)by using alternative appropriate methods to determine an applicant's ability to repay; and(2)use information from the Department of the Treasury to confirm that—(A)an applicant is eligible to receive the loan; or(B)the information contained in an application for the loan is accurate.(d)

Repayment

The Administrator shall establish the repayment terms with respect to each loan made under subsection (b), except that—(1)repayment shall not begin before the date that is 1 year after the date on which the loan is made;(2)the Administrator shall establish a process by which a border business that continues to experience a reduction in gross receipts following receipt of the loan can apply to delay the repayment of the loan for a period of not more than 4 years; and(3)the loan shall not accrue interest during the period in which repayment of the loan is deferred.(e)

Loan advance

(1)

In general

A border business that applies for a loan under subsection (b) may request that the Administrator provide an advance in the amount requested by the applicant to the applicant not later than 15 business days after the date on which the Administrator receives the request. (2)

Amount

The amount of an advance provided under this subsection shall be not less than $10,000.(3)

Verification

Before disbursing amounts under this subsection, the Administrator shall, not later than 15 business days after the date on which the Administrator receives the request for an advance by an applicant under this subsection—(A)perform the verification required under subsection (c);(B)if the Administrator verifies that the applicant is eligible for an advance under subsection (c), provide to the applicant with a payment in the amount described in paragraph (2); and(C)with respect to an applicant that the Administrator determines is not eligible for an advance under this subsection, provide the applicant with a notification explaining the reasons for reaching that determination. (4)

Use of funds

An advance provided under this subsection may be used for any purpose described in subsection (b)(4).(5)

Repayment

An applicant shall not be required to repay any amounts of an advance provided under this subsection, even if the applicant is subsequently denied a loan under subsection (b).(f)

Other benefits

Receipt of an advance under subsection (e) or a loan under subsection (b) shall not be construed as to prohibit receipt of any other Federal grant, loan, or aid.(g)

Taxability

For purposes of the Internal Revenue Code of 1986—(1)any advance described in paragraph (e) shall not be included in the gross income of the border business that receives the advance; (2)no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1); and(3)in the case of a partnership or S corporation that receives an advance described in subsection (e)—(A)any amount excluded from income under this subsection shall be treated as tax exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code of 1986, and(B)the Secretary of the Treasury (or the Secretary’s delegate) shall prescribe rules for determining a partner’s distributive share of any amount described in subparagraph (A) for purposes of section 705 of the Internal Revenue Code of 1986.(h)

Outreach

(1)

In general

In carrying out the loan program under this section, the Administrator shall—(A)establish an advertising and outreach program in partnership with State and local governments, community advocacy groups, chambers of commerce, and other State and local entities to help border businesses understand the availability of the loan program and to promote participation in the program by border businesses located in economically depressed areas; and(B)provide technical assistance to applicants, including instructions on how to participate in the loan program, assistance in preparing applications, and assistance in applying for loan deferral.(2)

Language access

The Administrator shall ensure that outreach and technical assistance activities described in this subsection are made available by the Administration to border business concerns in the commonly spoken languages, other than English, in the States of the United States that border the international boundary with Canada or Mexico, which shall include Spanish and French.(i)

Authorization of appropriations

There is authorized to be appropriated $500,000,000, to remain available until December 31, 2021, to carry out the requirements of this Act.