Amends the Small Business Act to permanently authorize small business loan provisions concerning: (1) combination financing; (2) loan guarantee fees; (3) express loan requirements; (4) deferred participation loan standards; and (5) increased Small Business Administration (SBA) guaranteed loan limits.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2915 Introduced in Senate (IS)]
108th CONGRESS
2d Session
S. 2915
To reauthorize programs under section 7(a) of the Small Business Act
(15 U.S.C. 636(a)) through September 30, 2005.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 7, 2004
Ms. Snowe (for herself and Mr. Bond) introduced the following bill;
which was read twice and referred to the Committee on Small Business
and Entrepreneurship
_______________________________________________________________________
A BILL
To reauthorize programs under section 7(a) of the Small Business Act
(15 U.S.C. 636(a)) through September 30, 2005.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. COMBINATION FINANCING.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is
amended by adding at the end the following:
``(31) Combination financing.--
``(A) Definitions.--As used in this paragraph--
``(i) the term `combination financing' means
financing comprised of a loan guaranteed under this
subsection and a commercial loan; and
``(ii) the term `commercial loan' means a loan
which is part of a combination financing and no portion
of which is guaranteed by the Federal Government.
``(B) Applicability.--This paragraph applies to a loan
guarantee obtained by a small business concern under this
subsection, if the small business concern also obtains a
commercial loan.
``(C) Commercial loan amount.--In the case of any
combination financing, the amount of the commercial loan which
is part of such financing shall not exceed the gross amount of
the loan guaranteed under this subsection which is part of such
financing.
``(D) Commercial loan provisions.--The commercial loan
obtained by the small business concern--
``(i) may be made by the participating lender that
is providing financing under this subsection or by a
different lender;
``(ii) may be secured by a senior lien; and
``(iii) may be made by a lender in the Preferred
Lenders Program, if applicable.
``(E) Commercial loan fee.--A one-time fee in an amount
equal to 0.7 percent of the amount of the commercial loan shall
be paid by the lender to the Administration if the commercial
loan has a senior credit position to that of the loan
guaranteed under this subsection. Any fee under the preceding
sentence shall be paid by the participating lender and shall
not be charged to the borrower.
``(F) Deferred participation loan security.--A loan
guaranteed under this paragraph may be secured by a
subordinated lien.
``(G) Completion of application processing.--The
Administrator shall complete processing of an application for
combination financing under this paragraph pursuant to the
program authorized by this subsection as it was operating on
October 1, 2003.
``(H) Business loan eligibility.--Any standards prescribed
by the Administrator relating to the eligibility of small
business concerns to obtain combination financing under this
subsection, which are in effect on September 1, 2004, shall
apply with respect to combination financings made under this
paragraph. Any modifications to such standards by the
Administrator after such date shall not unreasonably restrict
the availability of combination financing under this paragraph
relative to the availability of such financing before such
modifications.''.
SEC. 2. LOAN GUARANTEE FEES.
(a) In General.--Section 7(a)(23)(A) of the Small Business Act (15
U.S.C. 636(a)(23)(A)) is amended to read as follows:
``(A) Percentage.--With respect to each loan guaranteed
under this subsection, the Administrator shall, in accordance
with such terms and procedures as the Administrator shall
establish by regulation, assess and collect an annual fee in an
amount equal to 0.36 percent of the outstanding balance of the
deferred participation share of the loan.
(b) Guarantee Fees.--Section 7(a)(18) of the Small Business Act (15
U.S.C. 636(a)(18)) is amended to read as follows:
``(18) Guarantee fees.--With respect to each loan
guaranteed under this subsection (other than a loan that is
repayable in 1 year or less), the Administration shall collect
a guarantee fee, which shall be payable by the participating
lender, and may be charged to the borrower, as follows:
``(A) A guarantee fee equal to 1 percent of the
deferred participation share of a total loan amount
that is not more than $150,000.
``(B) A guarantee fee equal to 2.5 percent of the
deferred participation share of a total loan amount
that is more than $150,000, but not more than $700,000.
``(C) A guarantee fee equal to 3.5 percent of the
deferred participation share of a total loan amount
that is more than $700,000.
``(D) In addition to the fee under subparagraph
(C), a guarantee fee equal to 0.25 percent of the
amount, if any, by which the deferred participation
share of the loan exceeds $1,000,000.''.
SEC. 3. EXPRESS LOAN PROVISIONS.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as
amended by section 1, is further amended by adding at the end the
following:
``(32) Express loan provisions.--
``(A) Definitions.--As used in this paragraph:
``(i) The term `express lender' means any
lender authorized by the Administrator to
participate in the Express Loan Program.
``(ii) The term `express loan' means any
loan made pursuant to this paragraph in which a
lender utilizes to the maximum extent
practicable its own loan analyses, procedures,
and documentation.
``(iii) The term `Express Loan Program'
means the program for express loans established
by the Administrator under paragraph (25)(B),
as in existence on April 5, 2004, with a
guaranty rate of not more than 50 percent.
``(B) Restriction to express lender.--The authority
to make an express loan shall be limited to those
lenders deemed qualified to make such loans by the
Administrator. Designation as an express lender for
purposes of making an express loan shall not prohibit
such lender from taking any other action authorized by
the Administrator for that lender pursuant to this
subsection.
``(C) Grandfathering of existing lenders.--Any
express lender shall retain such designation unless the
Administrator determines that the express lender has
violated the law or regulations promulgated by the
Administrator or modifies the requirements to be an
express lender and the lender no longer satisfies those
requirements.
``(D) Maximum loan amount.--The maximum loan amount
under the Express Loan Program is $2,000,000.
``(E) Option to participate.--Except as otherwise
provided in this paragraph, the Administrator shall
take no regulatory, policy, or administrative action,
without regard to whether such action requires
notification pursuant to paragraph (24), that has the
effect of--
``(i) requiring a lender to make an express
loan pursuant to subparagraph (D);
``(ii) limiting or modifying any term or
condition of deferred participation loans made
under this subsection (other than express
loans) unless the Administrator imposes the
same limit or modification on express loans;
``(iii) transferring or re-allocating
staff, staff responsibilities, resources, or
funding, if the result of such transfer or re-
allocation would be to increase the average
loan processing, approval, or disbursement time
above the averages for those functions as of
October 1, 2003, for loan guarantees approved
under this subsection by employees of the
Administration or through the Preferred Lenders
Program; or
``(iv) otherwise providing any incentive or
disincentive which encourages lenders or
borrowers to make or obtain loans under the
Express Loan Program instead of under the
general loan authority of this subsection.
``(F) Collection and reporting of data.--For all
loans in excess of $250,000 made pursuant to the
authority set forth in subparagraph (D), the
Administrator shall, to the extent practicable, collect
data on the purpose for each such loan. The
Administrator shall report monthly to the Committee on
Small Business and Entrepreneurship of the Senate and
the Committee on Small Business of the House of
Representatives on the number of such loans and their
purposes.''.
SEC. 4. STANDARDS FOR LOANS MADE WITH DEFERRED PARTICIPATION.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as
amended by sections 1 and 3, is further amended by adding at the end
the following:
``(33) Standards for loans made with deferred
participation.--Deferred participation loans made on or after
October 1, 2004, under this subsection shall have the same
terms and conditions (including maximum gross loan amounts and
collateral requirements) as were applicable to loans made under
this subsection on October 1, 2003, except as otherwise
provided in paragraph (18)(D), paragraph (31), or paragraph
(32) and subject to the $1,500,000 limitation on the total
amount outstanding and committed in paragraph (3)(A), as in
effect on October 1, 2004. This paragraph shall not preclude
the Administrator from taking such action as necessary to
maintain the loan program carried out under this subsection,
subject to appropriations.''.
SEC. 5. INCREASE IN GUARANTEE AMOUNT AND INSTITUTION OF ASSOCIATED FEE.
Section 7(a)(3) of the Small Business Act (15 U.S.C. 636(a)(3)) is
amended--
(1) in subparagraph (A), by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(2) in subparagraph (B), by striking ``$1,250,000, of which
not more than $750,000'' and inserting ``$1,750,000, of which
not more than $1,250,000''.
SEC. 6. EFFECTIVE DATES.
The amendments made by this Act shall be effective beginning on the
date of enactment of this Act and ending on September 30, 2005.
<all>
Introduced in Senate
Read twice and referred to the Committee on Small Business and Entrepreneurship.
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