Small Business Employee Ownership Act

Small Business Employee Ownership Act - Amends the Small Business Act to make employee-owned firms eligible for financial assistance under the business loan program.

States that in the case of small business concerns using an employee stock ownership plan, as defined in the Internal Revenue Code of 1954, all financial assistance shall be made to the trust created for employee ownership of stock (ESOT). Predicates such assistance on: (1) a guarantee by the company seeking assistance that it will repay all obligations incurred by the ESOT; (2) the written assurance of the trustee of the ESOT that all guaranteed loans will be used solely for the purchase of company stock; (3) a distribution arrangement which vests ownership of all stock with the employees no later than the expiration date of any assistance made available to acquire such stock; (4) a certified plan, meeting specified conditions, for the allocation of company stock among the employees; and (5) the satisfaction of the Administrator of the Small Business Administration that all loans to an ESOT will be used solely to finance the acquisition.

Authorizes the extension of loan guarantees to employee organizations, including those using an ESOT, to finance the acquisition of the employee's workplace if it is a small business or a subsidiary which, if independently owned, would be a small business. States that such guarantees may be extended only if the small business or subsidiary would otherwise close, liquidate, relocate or sell out to a large business or if the owner agrees to the purchase by the employees.

Limits the principal amount of any loan guaranteed under this Act to $500,000.

Directs the Administrator of the Small Business Administration to report periodically to the Congress on the programs established by this Act.

Authorizes the Small Business Administration to extend loan guarantees directly to an owner of a business who is selling the business to employees under an installment contract provided specified conditions are met in the event of default.

Makes a company with 51 percent of its stock allocated through an ESOT to one or more socially and economically disadvantaged individuals eligible for the minority enterprise contract assistance program.