In the Consolidated Appropriations Act of 2021, Congress provided record level funding for the SBA Microloan Program. This victory will put the Microloan Program in a positive place for the start of the Fiscal Year 2022 federal budget and appropriations process.
For FY 21 appropriations, the omnibus provided $35 million for technical assistance, a $500,000 increase above FY 20, and $5 million in budget authority, for a total of $55 million in loans.
This historic package for COVID-19 relief included:
- $57 million supplemental for FY 21 and improvements that championed by Senator Duckworth and Senate Small Business Committee Ranking Member Cardin to secure for the Microloan Program;
- Extension of the debt relief program led by Senator Coons that includes $3.5 billion for payment of principal and interest (P&I) on small business loans guaranteed by the SBA under the 7(a), 504 and microloan programs and includes another 8 months of payments for microloan borrowers; and
- Key provisions of the Jobs and Neighborhood Investment Act that includes $12 billion in new CDFI/MDI funding, $9 billion of which will go towards the capital investment program and $3 billion will be made available in grants to eligible institutions and includes Persistent Poverty County language advocated for by the CDFI Coalition to ensure funding is directed to communities that need it the most.
There are a number of the HEROES Act improvements, including increased intermediary loan limits to $10 million through September 2021, and then going to $7 million after that; temporary waivers on TA 50/50 caps; updates to bonus grants; extensions on borrower repayment for 8 years, which then goes to 7 years after September 2021; and additional funds for TA and loans. The law also includes minimum grant thresholds of 25 percent and maximum of 30 percent, based on appropriations. It also offers increased authorization levels of $80 million for TA and $110 million for loans for FY 21-25.
The elimination of 1/55th rule, a longtime priority of the Friends of the SBA Microloan Program remains to be addressed.