No official summary available for this bill.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2662 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2662
To amend the Small Business Investment Act of 1958 to improve the loan
guaranty program, enhance the ability of small manufacturers to access
affordable capital, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 1, 2025
Ms. Klobuchar (for herself and Mr. Young) introduced the following
bill; which was read twice and referred to the Committee on Small
Business and Entrepreneurship
_______________________________________________________________________
A BILL
To amend the Small Business Investment Act of 1958 to improve the loan
guaranty program, enhance the ability of small manufacturers to access
affordable capital, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``504 Modernization and Small
Manufacturer Enhancement Act of 2025''.
SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOPMENT COMPANY PROGRAM.
Section 501(d)(3) of the Small Business Investment Act of 1958 (15
U.S.C. 695(d)(3)) is amended--
(1) by redesignating subparagraphs (A) through (L) as
subparagraphs (B) through (M), respectively;
(2) by inserting before subparagraph (B), as so
redesignated, the following:
``(A) workforce development through work-based or
work-integrated training, which shall be satisfied by
demonstrating that a small business concern that is a
subject of the project has--
``(i) a documented in-house training
program, the duration of which is not shorter
than 12 weeks; or
``(ii) entered into a contract with an
entity--
``(I) to provide trained applicants
for any open position of employment at
the small business concern; and
``(II) that ensures that any
applicant provided to the small
business concern under subclause (I)
has undergone not fewer than 12 weeks
of training that is relevant to the
open position described in that
subclause,'';
(3) by amending subparagraph (D), as so redesignated, to
read as follows:
``(D) expansion of minority-owned, employee-owned,
or women-owned business development,'';
(4) in subparagraph (L), as so redesignated, by striking
``producers, or'' and inserting ``producers,'';
(5) in subparagraph (M), as so redesignated, by striking
the period at the end and inserting a comma;
(6) by inserting after subparagraph (M), as so
redesignated, the following:
``(N) enhanced ability for small business concerns
to reduce costs by using energy efficient products and
generating renewable energy,
``(O) aid revitalizing of any area for which a
disaster has been declared or determined under
subparagraph (A), (B), (C), or (E) of section 7(b)(2)
of the Small Business Act (15 U.S.C. 636(b)(2)), or
``(P) expansion of small business concerns with 10
or fewer employees.''; and
(7) in the flush text following subparagraph (P), as added
by paragraph (6), by striking ``subparagraphs (J) and (K)'' and
inserting ``subparagraphs (K) and (L)''.
SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFACTURING LOANS.
Section 502 of the Small Business Investment Act of 1958 (15 U.S.C.
696) is amended--
(1) in the matter preceding paragraph (1), by striking
``The Administration'' and inserting the following:
``(a) In General.--The Administration''; and
(2) in subsection (a), as so designated--
(A) in paragraph (2)(A)--
(i) in the matter preceding clause (i), by
striking ``section'' and inserting
``subsection''; and
(ii) in clause (iii), by striking
``$5,500,000'' and inserting ``$10,000,000'';
and
(B) in paragraph (3)(A), by striking ``this
section'' and inserting ``this subsection''.
SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCEDURE.
Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695
et seq.) is amended--
(1) in section 502 (15 U.S.C. 696), as amended by this Act,
by adding at the end the following:
``(b) Closing.--An accredited lender certified company may take any
of the following actions to facilitate the closing of a loan made under
subsection (a):
``(1) Reallocate the cost of the project with respect to
which the loan is made in an amount that is not more than 10
percent of the overall cost of the project.
``(2) Correct any name that is applicable to the loan,
including the name of any borrower, guarantor, eligible passive
company described in paragraph (3)(A), and operating company
described in paragraph (3)(B).
``(3) Add any of the following to receive proceeds of the
loan:
``(A) An eligible passive company that complies
with section 120.111 of title 13, Code of Federal
Regulations, or any successor regulation.
``(B) If an eligible passive company is added under
subparagraph (A), an operating company with respect to
that eligible passive company.
``(4) Correct the address of any property with respect to
which the loan is made.
``(5) Correct the name of any interim lender or third-party
lender.
``(6) Change any third-party lender or interim lender if
that lender is a financial institution that is regulated by the
Federal Government or a State government.
``(7) Make a guarantor a co-borrower or a co-borrower a
guarantor.
``(8) Add a guarantor that does not change ownership with
respect to the loan.
``(9) Reduce the amount of standby debt before the closing
as a result of regularly scheduled payments.
``(10) Reduce the cost of the project with respect to which
the loan is made.
``(c) Accredited Lender Certified Company Defined.--In this
section, the term `accredited lender certified company' means a
certified development company that meets the requirements under section
507(b), including a certified development company that the
Administration has designated as an accredited lender under such
section 507(b).''; and
(2) by adding at the end the following:
``SEC. 511. CLOSING AND OVERSIGHT.
``(a) SBA District Counsels.--Beginning on the date that is 180
days after the date of enactment of this section, with respect to the
program established under this title, district counsels of the
Administration shall be subject to the same requirements, and shall
have the same authority and responsibilities, as in effect with respect
to that program on the day before the date of enactment of this
section, except that--
``(1) the Office of Credit Risk Management of the
Administration shall have the responsibility for all duties
relating to conducting file reviews of loans made under this
title; and
``(2) district counsels of the Administration shall not
have any responsibility relating to the review of closing
packages with respect to a loan made under this title.
``(b) Designated Attorneys.--For the purposes of this title, the
following provisions and requirements shall apply with respect to a
designated attorney of a certified development company:
``(1) A designated attorney that meets the requirements
determined under paragraph (2) shall be responsible for
certifying documents relating to the closing of a loan
described in this title.
``(2) The Administrator may determine any continuing
education requirements that the designated attorney shall be
required to satisfy in order to be permitted to close a loan
made under this title.
``(3) If, as of the date of enactment of this section, a
certified development company does not have a designated
attorney, during the 180-day period beginning on that date of
enactment, the certified development company may identify such
an attorney, subject to the approval of the Administrator.''.
SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR SMALL MANUFACTURERS.
(a) Contribution Requirement.--Section 502(a)(3)(C) of the Small
Business Investment Act of 1958 (15 U.S.C. 696(a)(3)(C)), as so
designated by this Act, is amended--
(1) by redesignating clauses (i), (ii), (iii), and (iv) as
subclauses (I), (II), (III), and (IV), respectively, and
adjusting the margins of such subclauses accordingly;
(2) by inserting before subclause (I), as so redesignated,
the following:
``(i) for a small business concern that is
not a small manufacturer (as defined in section
501(e)(7))--'';
(3) in subclause (III), as so redesignated, by striking
``clauses (i) and (ii)'' and inserting ``subclauses (I) and
(II)'';
(4) in subclause (IV) as so redesignated, by striking the
period at the end and inserting ``; or''; and
(5) by adding at the end the following:
``(ii) for a small manufacturer (as defined
in section 501(e)(7))--
``(I) at least 5 percent of the
total cost of the project financed, if
the small business concern has been in
operation for a period of 2 years or
less;
``(II) at least 5 percent of the
total cost of the project financed, if
the project involves a limited or
single purpose building or structure;
``(III) at least 10 percent of the
total cost of the project financed if
the project involves both of the
conditions set forth in subclauses (I)
and (II); or
``(IV) at least 5 percent of the
total cost of the project financed, in
all other circumstances, at the
discretion of the development
company.''.
(b) Collateral Requirements.--Section 502(a)(3)(E)(i) of the Small
Business Investment Act of 1958 (15 U.S.C. 696(a)(3)(E)(i)), as so
designated by this Act, is amended by adding at the end the following:
``Additional collateral shall not be required in the case of a small
manufacturer (as defined in section 501(e)(7)).''.
(c) Debt Refinancing.--Section 502(a)(7)(B) of the Small Business
Investment Act of 1958 (15 U.S.C. 696(a)(7)(B)), as so designated by
this Act, is amended--
(1) in the matter preceding clause (i), by inserting ``(or
in the case of a small manufacturer (as defined in section
501(e)(7)), that does not exceed 100 percent of the project
cost of the expansion)'' after ``cost of the expansion'';
(2) in clause (v), by adding ``and'' at the end;
(3) by striking clause (vi); and
(4) by redesignating clause (vii) as clause (vi).
(d) Amount of Guaranteed Debenture.--Section 503(a) of the Small
Business Investment Act of 1958 (15 U.S.C. 697(a)) is amended by adding
at the end the following:
``(5) Any debenture issued by a State or local development company
to a small manufacturer (as defined in section 501(e)(7)) with respect
to which a guarantee is made under this subsection shall be in an
amount equal to not more than 50 percent of the cost of the project
with respect to which such debenture is issued, without regard to
whether good cause has been shown.''.
SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS.
Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695
et seq.), as amended by this Act, is amended by adding at the end the
following:
``SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS.
``(a) In General.--The Administrator shall ensure that each
district office of the Administration partners with not less than 1
resource partner to provide training to small business concerns
assigned a North American Industry Classification System code for
manufacturing on obtaining assistance under the program carried out
under this title, including with respect to the application process
under that program and partnering with development companies under this
title.
``(b) Resource Partner Defined.--In this section, the term
`resource partner' means--
``(1) a small business development center, as defined in
section 3 of the Small Business Act (15 U.S.C. 632);
``(2) a women's business center described in section 29 of
such Act (15 U.S.C. 656);
``(3) a chapter of the Service Corps of Retired Executives
established under section 8(b)(1)(B) of such Act (15 U.S.C.
637(b)(1)(B)); and
``(4) a Veteran Business Outreach Center described in
section 32 of such Act (15 U.S.C. 657b).''.
SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXISTING BUILDINGS.
(a) In General.--Section 502(a) of the Small Business Investment
Act of 1958 (15 U.S.C. 696(a)), as so designated by this Act, is
amended by striking paragraphs (4) and (5) and inserting the following:
``(4) New facilities.--
``(A) In general.--With respect to a project to
construct a new facility, an assisted small business
concern may permanently lease not more than 20 percent
of the project to commercial or residential tenants if
such concern--
``(i) permanently occupies and uses not
less than 60 percent of the project;
``(ii) plans to occupy and use an
additional portion of the project that is not
permanently leased not later than 3 years after
receipt of assistance under this section; and
``(iii) plans to permanently occupy and use
80 percent of the project not later than 10
years after receipt of such assistance.
``(B) Small manufacturers.--With respect to an
assisted small business concern that is a small
manufacturer (as defined in section 501(e)(7)),
subparagraph (A)(i) shall apply with `50 percent'
substituted for `60 percent'.
``(5) Existing buildings.--With respect to a project to
acquire, renovate, or reconstruct an existing building, the
following shall apply:
``(A) Occupancy requirements.--The assisted small
business concern may permanently lease not more than 50
percent of the project if the concern permanently
occupies and uses not less than 50 percent of the
project.
``(B) Exception.--The assisted small business
concern may permanently lease more than 50 percent of
the project to commercial or residential tenants if--
``(i) such concern--
``(I) has occupied and used the
existing building for a consecutive 12-
month period before submitting an
application for assistance under this
section;
``(II) agrees to permanently use
less than 50 percent of the existing
building and permanently lease more
than 50 percent for a consecutive 12-
month period after receiving such
assistance; and
``(III) affirms that the existing
building is appropriate for current and
reasonably anticipated needs; and
``(ii) the development company assisting
such project--
``(I) provides written notice to
the Administrator on the date on which
the development company closes the loan
for such project; and
``(II) once each year during the
first 5 years of the loan, and once
every 2 years for the remainder of the
loan--
``(aa) conducts an
examination of the assisted
small business concern to
ensure the concern is not a
real estate development
business; and
``(bb) files with the
Administrator an anti-investor
certification signed by the
development company and the
assisted small business
concern.
``(C) Lease term.--Any residential lease made under
this paragraph shall be for a term of not more than 1
year, and any commercial lease made under this
paragraph shall be for a term of not more than 5
years.''.
(b) Report.--Not later than 5 years after the date of enactment of
this Act, the Administrator of the Small Business Administration shall
submit to Congress a report analyzing the impact of the amendments made
by this section on access to capital for small business concerns (as
defined in section 3 of the Small Business Act (15 U.S.C. 632)), and
recommending whether similar notice, examination, and certifications
requirements should be made to the program established under section
7(a) of the Small Business Act (15 U.S.C. 636(a)).
<all>
Introduced in Senate
Read twice and referred to the Committee on Small Business and Entrepreneurship.
Committee on Small Business and Entrepreneurship. Hearings held.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line