Summary#
This bill adds a new direct loan program at the Small Business Administration (SBA) for "microbusinesses." A microbusiness is defined as a for-profit business with no more than 10 full-time equivalent employees and annual revenue no greater than the lesser of $5,000,000 or the NAICS size standard for the business. The SBA may make and disburse direct loans up to $100,000 to qualifying microbusinesses. The SBA can work with third parties and pay or receive fees to cover costs for referring, originating, underwriting, disbursing, servicing, or liquidating loans. The bill directs the SBA to issue interim final rules within 90 days after enactment to set loan terms, underwriting criteria, repayment, interest rate, maturity, and other details. The bill specifies the interest rate for these loans as 6 percent per annum as a substitution in the cited provision.
What it means for you#
- If your business has 10 or fewer full-time equivalent employees and meets the revenue limit, you may be eligible for a direct SBA loan under this program.
- Loans would be available up to $100,000 per microbusiness.
- Borrowers may be charged fees for application, origination, servicing, or similar costs. The SBA may partner with third parties to help deliver loans.
- Final loan terms (repayment schedule, exact underwriting rules, and other conditions) will be set by the SBA in rules to be issued after the law takes effect.
Expenses#
- Borrowers: Loans carry an interest rate specified in the bill as 6 percent per year and may include borrower fees for origination, servicing, unused fees, or draw fees for revolving lines of credit.
- SBA and federal budget: No publicly available information on the federal cost, budgetary changes, or required appropriations is included in the bill text.
- Program administration: The bill allows fees to cover administrative costs and authorizes the SBA to pay third parties, but it does not provide a cost estimate in the text.
Proponents' View#
No publicly available information in the bill text about proponents' statements, reasons, or supporting arguments.
Opponents' View#
No publicly available information in the bill text about opponents' statements, objections, or concerns.