NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10208
SPONSOR: Buchwald TITLE OF BILL:
An act in relation to establishing the coronavirus pandemic small busi-
ness and not-for-profit organization loan program
TITLE OF BILL:
An act in relation to establishing the coronavirus pandemic small busi-
ness and not-for-profit organization loan program
PURPOSE OR GENERAL IDEA OF BILL:
This bill allows small businesses and not-for-profit's to apply for
no-interest loans up to $75,000 if their business or not-for-profit has
suffered a loss because of the coronavirus pandemic.
SUMMARY OF PROVISIONS:
Section 1 outlines the following terms, "affected businesses", "bank",
"credit union", "department", "eligible financial institution", "grace
period", "small business", "small not-for-profit organization", and
"coronavirus pandemic."
Section two allows small businesses and not-for-profits to submit a loan
guarantee claim to an eligible financial institution for the comp-
troller's approval during the coronavirus. pandemic.
Section three describes the loan program eligibility for small busi-
nesses or not-for-profit organizations within New York. The provisions
for eligibility state that the loan will not exceed $75,000 and will not
charge interest until at least 270 days after the coronavirus pandemic
is over. Additionally, the loan agreement will allow small businesses
and not-for-profits a grace period of 180 days before repayment of the
approved loan. The loan agreement must be paid in full within three to
six equal payments without a prepayment penalty or early payment penal-
ty. The eligible financial institution must offer credit counseling or
refer credit counselors to said small businesses or organizations.
Section four allows small businesses and not-for-profits to apply for
additional extensions for each thirty day period the business is
affected by the coronavirus pandemic. Small businesses and not-for-pro-
fits can only apply for up to three loan extensions under this program.
Section five describes the collection procedure for loans. Small busi-
nesses and not-for-profits are expected to maintain records of when the
loans were issued and of payments made to honor the loan guarantees
issued under this act. No additional loan applications can be submitted
after the coronavirus pandemic ends.
Section six sets the effective date.
JUSTIFICATION:
In light of the coronavirus pandemic, it is necessary to provide addi-
tional financial resources to small businesses and not-for-profit organ-
izations to help them stay afloat during these unforeseen circumstances.
This bill provides relief due to the coronavirus emergency and allows
businesses and not-for-profit organizations to operate during the
pandemic,
PRIOR LEGISLATIVE HISTORY:
New bill.
EFFECT ON FINES, TERMS OF IMPRISONMENT OR OTHER PENAL SANCTIONS:
None.
IMPACT ON REGULATION OF BUSINESSES AND INDIVIDUALS:
None.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Less of a fiscal impact than letting businesses and not-for-profit
organizations fail.
EFFECTIVE DATE:
This act shall take effect immediately.
