Infrastructure invoice deducts $ 31 billion from Covid catastrophe mortgage program
d3sign | Moment | Getty Images
A Senate infrastructure move unveiled this week would draw $ 31 billion from a corporate Covid disaster loan program.
The Economic Injury Disaster Loan Program was one of the mechanisms Congress put in place to help troubled businesses stay afloat during the pandemic.
It was initially plagued by issues like delays and cuts in maximum loan amounts when in high demand, which frustrated business owners looking for cash during lockdown.
The Infrastructure Investment and Jobs Act – a $ 1 trillion bipartisan bill unveiled on Sunday – would permanently suspend $ 13.5 billion from the disaster loan program.
More from Personal Finance:
Infrastructure Act takes action against crypto tax reporting
Here are the plans for going back to the office
The break for student loan borrowers ends next month
Unlike the Paycheck Protection Program, which is primarily aimed at propping up employee wages, the EIDL program’s low-interest loans are designed for operational costs such as health care, rent, utilities, and fixed debt payments.
The Small Business Administration has paid out $ 236 billion in catastrophe loans to 3.8 million businesses through July 29, according to federal data.
Senate infrastructure legislation would also reclaim $ 17.6 billion from an affiliate program that awards grants of up to $ 15,000 to hard-hit businesses in low-income communities.
The Targeted EIDL Advance program had 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 had depleted $ 20 billion in funding by July 2020.
The withdrawal of funds would not affect the balances already committed by the SBA, which manage the programs, if the infrastructure measure is successful.
The Infrastructure Act provides funds for roads, bridges, public transport, broadband, rail, water and airports. Sen. Majority Chairman Chuck Schumer, DN.Y., hopes to pass it before a scheduled month-long hiatus beginning Aug. 9.
The bill also aims to boost revenue by ending a pandemic-era corporate tax break – the employee loyalty loan – three months early.