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| 1 | AN ACT concerning State government. | ||||||
| 2 | Be it enacted by the People of the State of Illinois, | ||||||
| 3 | represented in the General Assembly: | ||||||
| 4 | Section 5. The Department of Commerce and Economic | ||||||
| 5 | Opportunity Law of the Civil Administrative Code of Illinois | ||||||
| 6 | is amended by adding Section 605-1119 as follows: | ||||||
| 7 | (20 ILCS 605/605-1119 new) | ||||||
| 8 | Sec. 605-1119. Loans to small businesses impacted by an | ||||||
| 9 | economic shock. | ||||||
| 10 | (a) The Department shall establish a loan program, subject | ||||||
| 11 | to appropriation, to provide low-interest loans to small | ||||||
| 12 | businesses that have been negatively impacted by an economic | ||||||
| 13 | shock. The Department may make loans under this Section from | ||||||
| 14 | the Economic Recovery Fund, a special fund created in the | ||||||
| 15 | State treasury. The Department may administer the program | ||||||
| 16 | directly or through agreements with banks, credit unions, | ||||||
| 17 | nonprofit loan administrators, or community development | ||||||
| 18 | financial institutions. The State shall provide a 100% | ||||||
| 19 | guarantee on loans issued under this Section. Participating | ||||||
| 20 | lenders shall act as originators and servicers of loans and | ||||||
| 21 | shall not be required to deploy their own capital. | ||||||
| 22 | (b) If the Governor declares that an economic shock exists | ||||||
| 23 | that has disrupted local or regional businesses and markets, | ||||||
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| 1 | the Department of Commerce and Economic Opportunity shall | ||||||
| 2 | provide loans to eligible small businesses as provided in this | ||||||
| 3 | Section. The Governor shall make any determination under this | ||||||
| 4 | Section based on objective indicators such as: | ||||||
| 5 | (1) reduced foot traffic; | ||||||
| 6 | (2) declining sales in certain corridors; | ||||||
| 7 | (3) workforce disruptions, such as increased | ||||||
| 8 | absenteeism or job abandonment; and | ||||||
| 9 | (4) business closures. | ||||||
| 10 | (c) Upon a declaration of an economic shock as provided in | ||||||
| 11 | subsection (b), a business shall be eligible for a loan under | ||||||
| 12 | this Section if: | ||||||
| 13 | (1) the business employed 50 or fewer persons at any | ||||||
| 14 | one time in the prior year; | ||||||
| 15 | (2) the business's gross receipts in the prior year | ||||||
| 16 | were $3,000,000 or less; | ||||||
| 17 | (3) the business has been materially impacted or is | ||||||
| 18 | located in an area that has been determined by the | ||||||
| 19 | Department to be materially impacted by the economic | ||||||
| 20 | shock. | ||||||
| 21 | (d) The loans shall be in an amount determined by the | ||||||
| 22 | Department but shall not exceed $50,000 per business. The | ||||||
| 23 | loans shall be repaid by the business at a fixed interest rate | ||||||
| 24 | of 2%, and the term of repayment shall not exceed 5 years. No | ||||||
| 25 | repayments shall be required for the first 6 months following | ||||||
| 26 | disbursement, and no early repayment penalty shall be charged. | ||||||
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| 1 | The loan proceeds shall be used for recovery-related operating | ||||||
| 2 | expenses including: | ||||||
| 3 | (1) rent and mortgage payments; | ||||||
| 4 | (2) employee wages and benefits; | ||||||
| 5 | (3) inventory restocking; | ||||||
| 6 | (4) equipment repair and replacement; | ||||||
| 7 | (5) debt repayments incurred to maintain operations; | ||||||
| 8 | (6) marketing or customer re-engagement expenses; and | ||||||
| 9 | (7) any other cost that the Department may approve by | ||||||
| 10 | rule. | ||||||
| 11 | The Department is authorized to provide participating | ||||||
| 12 | lenders with an administrative or origination fee, in an | ||||||
| 13 | amount determined by the Department, to cover the costs of | ||||||
| 14 | loan origination and servicing. Such a fee may be deducted | ||||||
| 15 | from loan disbursements. | ||||||
| 16 | (e) The Department may adopt rules to administer and | ||||||
| 17 | enforce this Section and may enter into agreements with banks, | ||||||
| 18 | credit unions, nonprofit loan administrations, or community | ||||||
| 19 | development financial institutions. The Department shall | ||||||
| 20 | establish clear and standardized procedures governing loan | ||||||
| 21 | servicing, delinquency, and default for loans issued under | ||||||
| 22 | this Section. Such procedures shall authorize participating | ||||||
| 23 | lenders to service and manage delinquent loans for a period of | ||||||
| 24 | time, as determined by the Department by rule, prior to loan | ||||||
| 25 | closure or write-off. | ||||||
| 26 | (f) All interest and principal collected shall be | ||||||
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| 1 | deposited into the Economic Recovery Fund to maintain and | ||||||
| 2 | replenish lending capacity. Loans issued under this Section | ||||||
| 3 | shall be backed by the State, and any losses resulting from | ||||||
| 4 | borrower default shall be borne by the Fund. | ||||||
| 5 | (g) Upon a declaration by the Governor that the economic | ||||||
| 6 | shock has ended, no new loans may be made. | ||||||
| 7 | Section 10. The State Finance Act is amended by adding | ||||||
| 8 | Section 5.1038 as follows: | ||||||
| 9 | (30 ILCS 105/5.1038 new) | ||||||
| 10 | Sec. 5.1038. The Economic Recovery Fund. | ||||||
| 11 | Section 99. Effective date. This Act takes effect upon | ||||||
| 12 | becoming law. | ||||||