15 U.S.C. § 636
Section 636 · Additional powers
Current version, with additions and removals from the August 5, 2022 version.
The Administration is empowered to the extent and in such amounts as provided in advance in appropriation Acts to make loans for plant acquisition, construction, conversion, or expansion, including the acquisition of land, material, supplies, equipment, and working capital, and to make loans to any qualified small business concern, including those owned by qualified Indian tribes, for purposes of this chapter. Such financings may be made either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis. These powers shall be subject, however, to the following restrictions, limitations, and provisions:
The Administrator has the authority to direct, and conduct oversight for, the methods by which lenders determine whether a borrower is able to obtain credit elsewhere. No financial assistance shall be extended pursuant to this subsection if the applicant can obtain credit elsewhere. No immediate participation may be purchased unless it is shown that a deferred participation is not available; and no direct financing may be made unless it is shown that a participation is not available.
On and after October 1, 2015, the Administrator may not guarantee a loan under this subsection if the lender determines that the borrower is unable to obtain credit elsewhere solely because the liquidity of the lender depends upon the guaranteed portion of the loan being sold on the secondary market.
Prior to the approval of any loan made pursuant to this subsection, or section 503 of the Small Business Investment Act of 1958 [15 U.S.C. 697], the Administrator may verify the applicant’s criminal background, or lack thereof, through the best available means, including, if possible, use of the National Crime Information Center computer system at the Federal Bureau of Investigation.
On and after October 1, 2015, the Administrator may not guarantee a loan under this subsection if the sole purpose for requesting the guarantee is to allow the lender to exceed the legal lending limit of the lender.
Except as provided in subparagraphs (B), (D), (E), and (F), in an agreement to participate in a loan on a deferred basis under this subsection (including a loan made under the Preferred Lenders Program), such participation by the Administration shall be equal to—
75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance exceeds $150,000; or
85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance is less than or equal to $150,000.
The guarantee percentage specified by subparagraph (A) for any loan under this subsection may be reduced upon the request of the participating lender.
The Administration shall not use the guarantee percentage requested by a participating lender under clause (i) as a criterion for establishing priorities in approving loan guarantee requests under this subsection.
The maximum interest rate for a loan guaranteed under the Preferred Lenders Program shall not exceed the maximum interest rate, as determined by the Administration, applicable to other loans guaranteed under this subsection.
Any lender that is participating in the Delegated Authority Lender Program of the Export-Import Bank of the United States (or any successor to the Program) shall be eligible to participate in the Preferred Lenders Program.
For purposes of this subparagraph, the term “Preferred Lenders Program” means any program established by the Administrator, as authorized under the proviso in section 634(b)(7) of this title, under which a written agreement between the lender and the Administration delegates to the lender—
complete authority to make and close loans with a guarantee from the Administration without obtaining the prior specific approval of the Administration; and
complete authority to service and liquidate such loans without obtaining the prior specific approval of the Administration for routine servicing and liquidation activities, but shall not take any actions creating an actual or apparent conflict of interest.
In an agreement to participate in a loan on a deferred basis under the Export Working Capital Program established pursuant to paragraph (14)(A), such participation by the Administration shall be 90 percent.
In an agreement to participate in a loan on a deferred basis under paragraph (16), the participation by the Administration may not exceed 90 percent.
In an agreement to participate in a loan on a deferred basis under paragraph (36), the participation by the Administration shall be 100 percent.
No loan shall be made under this subsection—
if the total amount outstanding and committed (by participation or otherwise) to the borrower from the business loan and investment fund established by this chapter would exceed $3,750,000 (or if the gross loan amount would exceed $5,000,000), except as provided in subparagraph (B);
if the total amount outstanding and committed (on a deferred basis) solely for the purposes provided in paragraph (16) to the borrower from the business loan and investment fund established by this chapter would exceed $4,500,000 (or if the gross loan amount would exceed $5,000,000), of which not more than $4,000,000 may be used for working capital, supplies, or financings under paragraph (14) for export purposes; and
if effected either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate basis if the amount would exceed $350,000.
Notwithstanding the provisions of the constitution of any State or the laws of any State limiting the rate or amount of interest which may be charged, taken, received, or reserved, the maximum legal rate of interest on any financing made on a deferred basis pursuant to this subsection shall not exceed a rate prescribed by the Administration, and the rate of interest for the Administration’s share of any direct or immediate participation loan shall not exceed the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans and adjusted to the nearest one-eighth of 1 per centum, and an additional amount as determined by the Administration, but not to exceed 1 per centum per annum: Provided, That for those loans to assist any public or private organization for the handicapped or to assist any handicapped individual as provided in paragraph (10) of this subsection, the interest rate shall be 3 per centum per annum.
Any bank or other lending institution making a claim for payment on the guaranteed portion of a loan made under this subsection shall be paid the accrued interest due on the loan from the earliest date of default to the date of payment of the claim at a rate not to exceed the rate of interest on the loan on the date of default, minus one percent.
If a loan described in clause (i) is sold on the secondary market, the amount of interest paid to a bank or other lending institution described in that clause from the earliest date of default to the date of payment of the claim shall be no more than the agreed upon rate, minus one percent.
Clauses (i) and (ii) shall not apply to loans made on or after October 1, 2000.
A borrower who prepays any loan guaranteed under this subsection shall remit to the Administration a subsidy recoupment fee calculated in accordance with clause (ii) if—
the loan is for a term of not less than 15 years;
the prepayment is voluntary;
the amount of prepayment in any calendar year is more than 25 percent of the outstanding balance of the loan; and
the prepayment is made within the first 3 years after disbursement of the loan proceeds.
The subsidy recoupment fee charged under clause (i) shall be—
5 percent of the amount of prepayment, if the borrower prepays during the first year after disbursement;
3 percent of the amount of prepayment, if the borrower prepays during the second year after disbursement; and
1 percent of the amount of prepayment, if the borrower prepays during the third year after disbursement.
No such loans including renewals and extensions thereof may be made for a period or periods exceeding twenty-five years, except that such portion of a loan made for the purpose of acquiring real property or constructing, converting, or expanding facilities may have a maturity of twenty-five years plus such additional period as is estimated may be required to complete such construction, conversion, or expansion.
All loans made under this subsection shall be of such sound value or so secured as reasonably to assure repayment: Provided, however, That—
for loans to assist any public or private organization or to assist any handicapped individual as provided in paragraph (10) of this subsection any reasonable doubt shall be resolved in favor of the applicant;
recognizing that greater risk may be associated with loans for energy measures as provided in paragraph (12) of this subsection, factors in determining “sound value” shall include, but not be limited to, quality of the product or service; technical qualifications of the applicant or his employees; sales projections; and the financial status of the business concern: Provided further, That such status need not be as sound as that required for general loans under this subsection; and 1
Repealed. Pub. L. 97–35, title XIX, § 1910, Aug. 13, 1981, 95 Stat. 778.
On that portion of the loan used to refinance existing indebtedness held by a bank or other lending institution, the Administration shall limit the amount of deferred participation to 80 per centum of the amount of the loan at the time of disbursement: Provided further, That any authority conferred by this subparagraph on the Administration shall be exercised solely by the Administration and shall not be delegated to other than Administration personnel.
The Administrator may defer payments on the principal and interest of such loans for a grace period and use such other methods as it deems necessary and appropriate to assure the successful establishment and operation of such concern.
With respect to a deferral provided under this paragraph, the Administrator may allow lenders under this subsection—
to provide full payment deferment relief (including payment of principal and interest) for a period of not more than 1 year; and
to provide an additional deferment period if the borrower provides documentation justifying such additional deferment.
Except as provided in clause (ii), if an investor declines to approve a deferral or additional deferment requested by a lender under subparagraph (B), the Administrator shall exercise the authority to purchase the loan so that the borrower may receive full payment deferment relief (including payment of principal and interest) or an additional deferment as described in subparagraph (B).
If, in a fiscal year, the Administrator determines that the cost of implementing clause (i) is greater than zero, the Administrator shall not implement that clause.
The Administration may make loans under this subsection to small business concerns owned and controlled by disabled veterans (as defined in section 4211(3) of title 38).
The Administration may provide loans under this subsection to finance residential or commercial construction or rehabilitation for sale: Provided, however, That such loans shall not be used primarily for the acquisition of land.
The Administration may provide guaranteed loans under this subsection to assist any public or private organization for the handicapped or to assist any handicapped individual, including service-disabled veterans, in establishing, acquiring, or operating a small business concern.
The Administration may provide loans under this subsection to any small business concern, or to any qualified person seeking to establish such a concern when it determines that such loan will further the policies established in section 631(c) 2 of this title, with particular emphasis on the preservation or establishment of small business concerns located in urban or rural areas with high proportions of unemployed or low-income individuals or owned by low-income individuals.
The Administration may provide loans under this subsection to assist any small business concern, including start up, to enable such concern to design architecturally or engineer, manufacture, distribute, market, install, or service energy measures: Provided, however, That such loan proceeds shall not be used primarily for research and development.
3 The Administration may provide deferred participation loans under this subsection to finance the planning, design, or installation of pollution control facilities for the purposes set forth in section 404 of the Small Business Investment Act of 1958 [15 U.S.C. 694–1]. Notwithstanding the limitation expressed in paragraph (3) of this subsection, a loan made under this paragraph may not result in a total amount outstanding and committed to a borrower from the business loan and investment fund of more than $1,000,000.
The Administration may provide financings under this subsection to State and local development companies for the purposes of, and subject to the restrictions in, title V of the Small Business Investment Act of 1958 [15 U.S.C. 695 et seq.].
The Administrator may provide extensions of credit, standby letters of credit, revolving lines of credit for export purposes, and other financing to enable small business concerns, including small business export trading companies and small business export management companies, to develop foreign markets. A bank or participating lending institution may establish the rate of interest on such financings as may be legal and reasonable.
The Administrator may not guarantee a loan under this paragraph of more than $5,000,000.
For a loan under this paragraph, the Administrator shall collect the fee assessed under paragraph (23) not more frequently than once each year.
The Administrator may not assess a fee on capital that is not accessed by the small business concern.
When considering loan or guarantee applications, the Administration shall give weight to export-related benefits, including opening new markets for United States goods and services abroad and encouraging the involvement of small businesses, including agricultural concerns, in the export market.
The Administrator shall aggressively market its export financing program to small businesses.
The Administration may guarantee loans under this subsection—
to qualified employee trusts with respect to a small business concern for the purpose of purchasing, and for any transaction costs associated with purchasing, stock of the concern under a plan approved by the Administrator which, when carried out, results in the qualified employee trust owning at least 51 per centum of the stock of the concern; and
to a small business concern under a plan approved by the Administrator, if the proceeds from the loan are only used to make a loan to a qualified employee trust, and for any transaction costs associated with making that loan, that results in the qualified employee trust owning at least 51 percent of the small business concern.
The plan requiring the Administrator’s approval under subparagraph (A) shall be submitted to the Administration by the trustee of such trust or by the small business concern with its application for the guarantee. Such plan shall include an agreement with the Administrator which is binding on such trust and on the small business concern and which provides that—
not later than the date the loan guaranteed under subparagraph (A) is repaid (or as soon thereafter as is consistent with the requirements of section 401(a) of title 26), at least 51 per centum of the total stock of such concern shall be allocated to the accounts of at least 51 per centum of the employees of such concern who are entitled to share in such allocation,
there will be periodic reviews of the role in the management of such concern of employees to whose accounts stock is allocated,
there will be adequate management to assure management expertise and continuity, and
with respect to a loan made to a trust, or to a cooperative in accordance with paragraph (35)—
a seller of the small business concern may remain involved as an officer, director, or key employee of the small business concern when a qualified employee trust or cooperative has acquired 100 percent of ownership of the small business concern; and
any seller of the small business concern who remains as an owner of the small business concern, regardless of the percentage of ownership interest, shall be required to provide a personal guarantee by the Administration.
In determining whether to guarantee any loan under this paragraph, the individual business experience or personal assets of employee-owners shall not be used as criteria, except inasmuch as certain employee-owners may assume managerial responsibilities, in which case business experience may be considered.
For purposes of this paragraph, a corporation which is controlled by any other person shall be treated as a small business concern if such corporation would, after the plan described in subparagraph (B) is carried out, be treated as a small business concern.
The Administration shall compile a separate list of applications for assistance under this paragraph, indicating which applications were accepted and which were denied, and shall report periodically to the Congress on the status of employee-owned firms assisted by the Administration, which shall include—
the total number of loans made to employee-owned business concerns that were guaranteed by the Administrator under this subsection or section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696), including the number of loans made—
to small business concerns owned and controlled by socially and economically disadvantaged individuals; and
to cooperatives;
the total number of financings made to employee-owned business concerns by companies licensed under section 301(c) of the Small Business Investment Act of 1958 (15 U.S.C. 696(c)) [15 U.S.C. 681(c)], including the number of financings made—
to small business concerns owned and controlled by socially and economically disadvantaged individuals; and
to cooperatives; and
any outreach and educational activities conducted by the Administration with respect to employee-owned business concerns.
A small business concern that makes a loan to a qualified employee trust under subparagraph (A)(ii) is not required to contain the same terms and conditions as the loan made to the small business concern that is guaranteed by the Administration under such subparagraph.
With respect to a loan made to a qualified employee trust under this paragraph, or to a cooperative in accordance with paragraph (35), the Administrator may, as deemed appropriate, elect to not require any mandatory equity to be provided by the qualified employee trust or cooperative to make the loan.
If the Administrator determines that a loan guaranteed under this subsection will allow an eligible small business concern that is engaged in or adversely affected by international trade to improve its competitive position, the Administrator may make such loan to assist such concern—
in the financing of the acquisition, construction, renovation, modernization, improvement, or expansion of productive facilities or equipment to be used in the United States in the production of goods and services involved in international trade;
in the refinancing of existing indebtedness that is not structured with reasonable terms and conditions, including any debt that qualifies for refinancing under any other provision of this subsection; or
by providing working capital.
Except as provided in clause (ii), each loan made under this paragraph shall be secured by a first lien position or first mortgage on the property or equipment financed by the loan or on other assets of the small business concern.
A loan under this paragraph may be secured by a second lien position on the property or equipment financed by the loan or on other assets of the small business concern, if the Administrator determines the lien provides adequate assurance of the payment of the loan.
For purposes of this paragraph, a small business concern is engaged in international trade if, as determined by the Administrator, the small business concern is in a position to expand existing export markets or develop new export markets.
For purposes of this paragraph, a small business concern is adversely affected by international trade if, as determined by the Administrator, the small business concern—
is confronting increased competition with foreign firms in the relevant market; and
is injured by such competition.
For purposes of subparagraph (D)(ii) the Administrator shall accept any finding of injury by the International Trade Commission or any finding of injury by the Secretary of Commerce pursuant to chapter 3 of title II of the Trade Act of 1974 [19 U.S.C. 2341 et seq.].
The Administrator shall publish an annual list of the banks and participating lending institutions that, during the 1-year period ending on the date of publication of the list, have made loans guaranteed by the Administration under—
this paragraph;
paragraph (14); or
paragraph (34).
The Administrator shall—
post the list published under clause (i) on the website of the Administration; and
make the list published under clause (i) available, upon request, at each district office of the Administration.
The Administration shall authorize lending institutions and other entities in addition to banks to make loans authorized under this subsection.
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 guarantee fee not to exceed 2 percent of the deferred participation share of a total loan amount that is not more than $150,000.
A guarantee fee not to exceed 3 percent of the deferred participation share of a total loan amount that is more than $150,000, but not more than $700,000.
A guarantee fee not to exceed 3.5 percent of the deferred participation share of a total loan amount that is more than $700,000.
In addition to the fee under clause (iii), a guarantee fee equal to 0.25 percent of any portion of the deferred participation share that is more than $1,000,000.
Lenders participating in the programs established under this subsection may retain not more than 25 percent of a fee collected under subparagraph (A)(i).
In addition to the Preferred Lenders Program authorized by the proviso in section 634(b)(7) of this title, the Administration is authorized to establish a Certified Lenders Program for lenders who establish their knowledge of Administration laws and regulations concerning the guaranteed loan program and their proficiency in program requirements. The designation of a lender as a certified lender shall be suspended or revoked at any time that the Administration determines that the lender is not adhering to its rules and regulations or that the loss experience of the lender is excessive as compared to other lenders, but such suspension or revocation shall not affect any outstanding guarantee.
In order to encourage all lending institutions and other entities making loans authorized under this subsection to provide loans of $50,000 or less in guarantees to eligible small business loan applicants, the Administration shall develop and allow participating lenders to solely utilize a uniform and simplified loan form for such loans.
The Administrator may permit lenders participating in the Certified Lenders Program to liquidate loans made with a guarantee from the Administration pursuant to a liquidation plan approved by the Administrator.
If the Administrator does not approve or deny a request for approval of a liquidation plan within 10 business days of the date on which the request is made (or with respect to any routine liquidation activity under such a plan, within 5 business days) such request shall be deemed to be approved.
The Administration is empowered to make loans either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis to small business concerns eligible for assistance under subsection (j)(10) and section 637(a) of this title. Such assistance may be provided only if the Administration determines that—
the type and amount of such assistance requested by such concern is not otherwise available on reasonable terms from other sources;
with such assistance such concern has a reasonable prospect for operating soundly and profitably within a reasonable period of time;
the proceeds of such assistance will be used within a reasonable time for plant construction, conversion, or expansion, including the acquisition of equipment, facilities, machinery, supplies, or material or to supply such concern with working capital to be used in the manufacture of articles, equipment, supplies, or material for defense or civilian production or as may be necessary to insure a well-balanced national economy; and
such assistance is of such sound value as reasonably to assure that the terms under which it is provided will not be breached by the small business concern.
No loan shall be made under this paragraph if the total amount outstanding and committed (by participation or otherwise) to the borrower would exceed $750,000.
Subject to the provisions of clause (i), in agreements to participate in loans on a deferred (guaranteed) basis, participation by the Administration shall be not less than 85 per centum of the balance of the financing outstanding at the time of disbursement.
The rate of interest on financings made on a deferred (guaranteed) basis shall be legal and reasonable.
Financings made pursuant to this paragraph shall be subject to the following limitations:
No immediate participation may be purchased unless it is shown that a deferred participation is not available.
No direct financing may be made unless it is shown that a participation is unavailable.
A direct loan or the Administration’s share of an immediate participation loan made pursuant to this paragraph shall be any secured debt instrument—
that is subordinated by its terms to all other borrowings of the issuer;
the rate of interest on which shall not exceed the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loan and adjusted to the nearest one-eighth of 1 per centum;
the term of which is not more than twenty-five years; and
the principal on which is amortized at such rate as may be deemed appropriate by the Administration, and the interest on which is payable not less often than annually.
The Administration may make loans on a guaranteed basis under the authority of this subsection—
to a small business concern that has been (or can reasonably be expected to be) detrimentally affected by—
the closure (or substantial reduction) of a Department of Defense installation; or
the termination (or substantial reduction) of a Department of Defense program on which such small business was a prime contractor or subcontractor (or supplier) at any tier; or
to a qualified individual or a veteran seeking to establish (or acquire) and operate a small business concern.
Recognizing that greater risk may be associated with a loan to a small business concern described in subparagraph (A)(i), any reasonable doubts concerning the firm’s proposed business plan for transition to nondefense-related markets shall be resolved in favor of the loan applicant when making any determination regarding the sound value of the proposed loan in accordance with paragraph (6).
Loans pursuant to this paragraph shall be authorized in such amounts as provided in advance in appropriation Acts for the purposes of loans under this paragraph.
For purposes of this paragraph a qualified individual is—
a member of the Armed Forces of the United States, honorably discharged from active duty involuntarily or pursuant to a program providing bonuses or other inducements to encourage voluntary separation or early retirement;
a civilian employee of the Department of Defense involuntarily separated from Federal service or retired pursuant to a program offering inducements to encourage early retirement; or
an employee of a prime contractor, subcontractor, or supplier at any tier of a Department of Defense program whose employment is involuntarily terminated (or voluntarily terminated pursuant to a program offering inducements to encourage voluntary separation or early retirement) due to the termination (or substantial reduction) of a Department of Defense program.
In providing assistance under this paragraph, the Administration shall develop procedures to ensure, to the maximum extent practicable, that such assistance is used for projects that—
have the greatest potential for—
creating new jobs for individuals whose employment is involuntarily terminated due to reductions in Federal defense expenditures; or
preventing the loss of jobs by employees of small business concerns described in subparagraph (A)(i); and
have substantial potential for stimulating new economic activity in communities most affected by reductions in Federal defense expenditures.
The Administration is authorized to permit participating lenders to impose and collect a reasonable penalty fee on late payments of loans guaranteed under this subsection in an amount not to exceed 5 percent of the monthly loan payment per month plus interest.
With respect to each loan approved under this subsection, the Administration shall assess, collect, and retain a fee, not to exceed 0.55 percent per year of the outstanding balance of the deferred participation share of the loan, in an amount established once annually by the Administration in the Administration’s annual budget request to Congress, as necessary to reduce to zero the cost to the Administration of making guarantees under this subsection. As used in this paragraph, the term “cost” has the meaning given that term in section 661a of title 2.
The yearly fee assessed under subparagraph (A) shall be payable by the participating lender and shall not be charged to the borrower.
If the Administration determines that fees paid by lenders and by small business borrowers for guarantees under this subsection may be reduced, consistent with reducing to zero the cost to the Administration of making such guarantees—
the Administration shall first consider reducing fees paid by small business borrowers under clauses (i) through (iii) of paragraph (18)(A), to the maximum extent possible; and
fees paid by small business borrowers shall not be increased above the levels in effect on December 8, 2004.
The Administration shall notify the Committees on Small Business of the Senate and the House of Representatives not later than 15 days before making any significant policy or administrative change affecting the operation of the loan program under this subsection.
Not more than 10 percent of the total number of loans guaranteed in any fiscal year under this subsection may be awarded as part of a pilot program which is commenced by the Administrator on or after October 1, 1996.
In this paragraph, the term ‘pilot program’ means any lending program initiative, project, innovation, or other activity not specifically authorized by law.
The Administrator may carry out the low documentation loan program for loans of $100,000 or less only through lenders with significant experience in making small business loans. Not later than 90 days after September 30, 1996, the Administrator shall promulgate regulations defining the experience necessary for participation as a lender in the low documentation loan program.
All fees, interest, and profits received and retained by the Administration under this subsection shall be included in the calculations made by the Director of the Office of Management and Budget to offset the cost (as that term is defined in section 661a of title 2) to the Administration of purchasing and guaranteeing loans under this chapter.
Repealed. Pub. L. 106–8, § 3(c), Apr. 2, 1999, 113 Stat. 16.
In addition to such other lease arrangements as may be authorized by the Administration, a borrower may permanently lease to one or more tenants not more than 20 percent of any property constructed with the proceeds of a loan guaranteed under this subsection, if the borrower permanently occupies and uses not less than 60 percent of the total business space in the property.
With respect to a loan under this subsection that is secured by commercial real property, an appraisal of such property by a State licensed or certified appraiser—
shall be required by the Administration in connection with any such loan, if such loan is in an amount greater than the Federal banking regulator appraisal threshold; or
may be required by the Administration or the lender in connection with any such loan, if such loan is in an amount equal to or less than the Federal banking regulator appraisal threshold, if such appraisal is necessary for appropriate evaluation of creditworthiness.
For purposes of this paragraph, the term “Federal banking regulator appraisal threshold” means the lesser of the threshold amounts set by the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation for when a federally related transaction that is a commercial real estate transaction requires an appraisal prepared by a State licensed or certified appraiser.
Ownership requirements to determine the eligibility of a small business concern that applies for assistance under any credit program under this chapter shall be determined without regard to any ownership interest of a spouse arising solely from the application of the community property laws of a State for purposes of determining marital interests.
As used in this paragraph:
The term “disaster area” means the area for which the President has declared a major disaster, during the 5-year period beginning on the date of the declaration.
The term “express lender” means any lender authorized by the Administration to participate in the Express Loan Program.
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.
The term “Express Loan Program” means the program for express loans established by the Administration under paragraph (25)(B), as in existence on April 5, 2004, with a guarantee rate of not more than 50 percent.
The authority to make an express loan shall be limited to those lenders deemed qualified to make such loans by the Administration. 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 Administration for that lender pursuant to this subsection.
Any express lender shall retain such designation unless the Administration determines that the express lender has violated the law or regulations promulgated by the Administration or modifies the requirements to be an express lender and the lender no longer satisfies those requirements.
The maximum loan amount under the Express Loan Program is $500,000.
Except as otherwise provided in this paragraph, the Administration 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 requiring a lender to make an express loan pursuant to subparagraph (D).
In this subparagraph—
the term “biomass”—
means any organic material that is available on a renewable or recurring basis, including—
agricultural crops;
trees grown for energy production;
wood waste and wood residues;
plants (including aquatic plants and grasses);
residues;
fibers;
animal wastes and other waste materials; and
fats, oils, and greases (including recycled fats, oils, and greases); and
does not include—
paper that is commonly recycled; or
unsegregated solid waste;
the term “energy efficiency project” means the installation or upgrading of equipment that results in a significant reduction in energy usage; and
the term “renewable energy system” means a system of energy derived from—
a wind, solar, biomass (including biodiesel), or geothermal source; or
hydrogen derived from biomass or water using an energy source described in item (aa).
The Administrator may make a loan under the Express Loan Program for the purpose of—
purchasing a renewable energy system; or
carrying out an energy efficiency project for a small business concern.
The Administrator may not collect a guarantee fee described in paragraph (18) in connection with a loan made under this paragraph to a veteran or spouse of a veteran on or after October 1, 2015.
In this subparagraph, the term “veteran or spouse of a veteran” means—
a veteran, as defined in section 632(q)(4) of this title;
an individual who is eligible to participate in the Transition Assistance Program established under section 1144 of title 10;
a member of a reserve component of the Armed Forces named in section 10101 of title 10;
the spouse of an individual described in subclause (I), (II), or (III); or
the surviving spouse (as defined in section 101 of title 38) of an individual described in subclause (I), (II), or (III) who died while serving on active duty or as a result of a disability that is service-connected (as defined in such section).
The Administrator may guarantee an express loan to a small business concern located in a disaster area in accordance with this subparagraph.
For a loan guaranteed under clause (i)—
the maximum loan amount is $150,000; and
the guarantee rate shall be not more than 85 percent.
A loan guaranteed under clause (i) shall not be counted in determining the amount of loans made to a borrower for purposes of subparagraph (D).
A small business concern receiving a loan guaranteed under clause (i) shall certify that the small business concern was in operation on the date on which the applicable major disaster occurred as a condition of receiving the loan.
A loan guaranteed under clause (i) may only be made to a small business concern that demonstrates, to the satisfaction of the Administrator, sufficient capacity to repay the loan.
Not later than 90 days after the date on which a request for purchase is filed with the Administrator, the Administrator shall determine whether to pay the guaranteed portion of the loan.
Notwithstanding any other provision of law, unless there is a subsequent finding of fraud by a court of competent jurisdiction relating to a loan guaranteed under clause (i), on and after the date that is 6 months after the date on which the Administrator determines to pay the guaranteed portion of the loan, the Administrator may not attempt to recapture the paid guarantee.
Unless the Administrator has waived the guarantee fee that would otherwise be collected by the Administrator under paragraph (18) for a loan guaranteed under clause (i), and except as provided in subclause (II), the guarantee fee for the loan shall be equal to the guarantee fee that the Administrator would collect if the guarantee rate for the loan was 50 percent.
Subclause (I) shall not apply if the cost of carrying out the program under this subsection in a fiscal year is more than zero and such cost is directly attributable to the cost of guaranteeing loans under clause (i).
Not later than 270 days after November 25, 2015, the Administrator shall promulgate rules to carry out this subparagraph.
In this paragraph—
the term “cost” has the meaning given that term in section 661a of title 2;
the term “covered energy efficiency loan” means a loan—
made under this subsection; and
the proceeds of which are used to purchase energy efficient designs, equipment, or fixtures, or to reduce the energy consumption of the borrower by 10 percent or more; and
the term “pilot program” means the pilot program established under subparagraph (B) 4
The Administrator shall establish and carry out a pilot program under which the Administrator shall reduce the fees for covered energy efficiency loans.
The pilot program shall terminate at the end of the second full fiscal year after the date that the Administrator establishes the pilot program.
A covered energy efficiency loan shall include the maximum participation levels by the Administrator permitted for loans made under this subsection.
The fee on a covered energy efficiency loan shall be equal to 50 percent of the fee otherwise applicable to that loan under paragraph (18).
The Administrator may waive clause (i) for a fiscal year if—
for the fiscal year before that fiscal year, the annual rate of default of covered energy efficiency loans exceeds that of loans made under this subsection that are not covered energy efficiency loans;
the cost to the Administration of making loans under this subsection is greater than zero and such cost is directly attributable to the cost of making covered energy efficiency loans; and
no additional sources of revenue authority are available to reduce the cost of making loans under this subsection to zero.
If the Administrator waives the reduction of fees under clause (ii), the Administrator—
shall not assess or collect fees in an amount greater than necessary to ensure that the cost of the program under this subsection is not greater than zero; and
shall reinstate the fee reductions under clause (i) when the conditions in clause (ii) no longer apply.
The Administrator shall not increase the fees under paragraph (18) on loans made under this subsection that are not covered energy efficiency loans as a direct result of the pilot program.
Not later than 1 year after the date that the pilot program terminates, the Comptroller General of the United States shall submit to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report on the pilot program.
The report submitted under clause (i) shall include—
the number of covered energy efficiency loans for which fees were reduced under the pilot program;
a description of the energy efficiency savings with the pilot program;
a description of the impact of the pilot program on the program under this subsection;
an evaluation of the efficacy and potential fraud and abuse of the pilot program; and
recommendations for improving the pilot program.
In this paragraph—
the term “cost” has the meaning given that term in section 661a of title 2;
the term “pilot program” means the pilot program established under subparagraph (B); and
the term “veteran participation loan” means a loan made under this subsection to a small business concern owned and controlled by veterans of the Armed Forces or members of the reserve components of the Armed Forces.
The Administrator shall establish and carry out a pilot program under which the Administrator shall reduce the fees for veteran participation loans.
The pilot program shall terminate at the end of the second full fiscal year after the date that the Administrator establishes the pilot program.
A veteran participation loan shall include the maximum participation levels by the Administrator permitted for loans made under this subsection.
The fee on a veteran participation loan shall be equal to 50 percent of the fee otherwise applicable to that loan under paragraph (18).
The Administrator may waive clause (i) for a fiscal year if—
for the fiscal year before that fiscal year, the annual estimated rate of default of veteran participation loans exceeds that of loans made under this subsection that are not veteran participation loans;
the cost to the Administration of making loans under this subsection is greater than zero and such cost is directly attributable to the cost of making veteran participation loans; and
no additional sources of revenue authority are available to reduce the cost of making loans under this subsection to zero.
If the Administrator waives the reduction of fees under clause (ii), the Administrator—
shall not assess or collect fees in an amount greater than necessary to ensure that the cost of the program under this subsection is not greater than zero; and
shall reinstate the fee reductions under clause (i) when the conditions in clause (ii) no longer apply.
The Administrator shall not increase the fees under paragraph (18) on loans made under this subsection that are not veteran participation loans as a direct result of the pilot program.
Not later than 1 year after the date that the pilot program terminates, the Comptroller General of the United States shall submit to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report on the pilot program.
The report submitted under clause (i) shall include—
the number of veteran participation loans for which fees were reduced under the pilot program;
a description of the impact of the pilot program on the program under this subsection;
an evaluation of the efficacy and potential fraud and abuse of the pilot program; and
recommendations for improving the pilot program.
In this paragraph—
the term “export development activity” includes—
obtaining a standby letter of credit when required as a bid bond, performance bond, or advance payment guarantee;
participation in a trade show that takes place outside the United States;
translation of product brochures or catalogues for use in markets outside the United States;
obtaining a general line of credit for export purposes;
performing a service contract from buyers located outside the United States;
obtaining transaction-specific financing associated with completing export orders;
purchasing real estate or equipment to be used in the production of goods or services for export;
providing term loans or other financing to enable a small business concern, including an export trading company and an export management company, to develop a market outside the United States; and
acquiring, constructing, renovating, modernizing, improving, or expanding a production facility or equipment to be used in the United States in the production of goods or services for export; and
the term “express loan” means a loan in which a lender uses to the maximum extent practicable the loan analyses, procedures, and documentation of the lender to provide expedited processing of the loan application.
The Administrator may guarantee the timely payment of an express loan to a small business concern made for an export development activity.
The maximum amount of an express loan guaranteed under this paragraph shall be $500,000.
For an express loan guaranteed under this paragraph, the Administrator shall guarantee—
90 percent of a loan that is not more than $350,000; and
75 percent of a loan that is more than $350,000 and not more than $500,000.
In this paragraph, the term “cooperative” means an entity that is determined to be a cooperative by the Administrator, in accordance with applicable Federal and State laws and regulation.
The Administration shall guarantee loans made to a cooperative for the purpose described in paragraph (15).
In this paragraph—
the terms “appropriate Federal banking agency” and “insured depository institution” have the meanings given those terms in section 1813 of title 12;
the term “covered loan” means a loan made under this paragraph during the covered period;
the term “covered period” means the period beginning on February 15, 2020 and ending on June 30, 2021;
the term “eligible recipient” means an individual or entity that is eligible to receive a covered loan;
the term “eligible self-employed individual” has the meaning given the term in section 7002(b) of the Families First Coronavirus Response Act (Public Law 116–127);
the term “insured credit union” has the meaning given the term in section 1752 of title 12;
the term “nonprofit organization” means an organization that is described in section 501(c)(3) of title 26 and that is exempt from taxation under section 501(a) of title 26;
the term “payroll costs”—
means—
the sum of payments of any compensation with respect to employees that is a—
salary, wage, commission, or similar compensation;
payment of cash tip or equivalent;
payment for vacation, parental, family, medical, or sick leave;
allowance for dismissal or separation;
payment required for the provisions of group health care or group life, disability, vision, or dental insurance benefits, including insurance premiums;
payment of any retirement benefit; or
payment of State or local tax assessed on the compensation of employees; and
the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred; and
shall not include—
the compensation of an individual employee in excess of $100,000 on an annualized basis, as prorated for the period during which the compensation is paid or the obligation to pay the compensation is incurred;
taxes imposed or withheld under chapters 21, 22, or 24 of title 26 during the applicable period;
any compensation of an employee whose principal place of residence is outside of the United States;
qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116–127); or
qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act (Public Law 116–127);
the term “veterans organization” means an organization that is described in section 501(c)(19) of title 26 that is exempt from taxation under section 501(a) of title 26;
the term “community development financial institution” has the meaning given the term in section 4702 of title 12); 5
the term “community financial institutions” means—
a community development financial institution;
a minority depository institution, as defined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note);
a development company that is certified under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.); and
an intermediary, as defined in subsection (m)(11);
the term “credit union” means a State credit union or a Federal credit union, as those terms are defined, respectively, in section 1752 of title 12;
the term “seasonal employer” means an eligible recipient that—
does not operate for more than 7 months in any calendar year; or
during the preceding calendar year, had gross receipts for any 6 months of that year that were not more than 33.33 percent of the gross receipts of the employer for the other 6 months of that year;
the term “housing cooperative” means a cooperative housing corporation (as defined in section 216(b) of title 26) that employs not more than 300 employees;
the term “destination marketing organization” means a nonprofit entity that is—
an organization described in section 501(c) of title 26 and exempt from tax under section 501(a) of such title; or
a State, or a political subdivision of a State (including any instrumentality of such entities)—
engaged in marketing and promoting communities and facilities to businesses and leisure travelers through a range of activities, including—
assisting with the location of meeting and convention sites;
providing travel information on area attractions, lodging accommodations, and restaurants;
providing maps; and
organizing group tours of local historical, recreational, and cultural attractions; or
that is engaged in, and derives the majority of the operating budget of the entity from revenue attributable to, providing live events;
the terms “exchange”, “issuer”, and “security” have the meanings given those terms in section 78c(a) of this title; and
the term “additional covered nonprofit entity”—
means an organization described in any paragraph of section 501(c) of title 26, other than paragraph (3), (4), (6), or (19), and exempt from tax under section 501(a) of such title; and
does not include any entity that, if the entity were a business concern, would be described in section 120.110 of title 13, Code of Federal Regulations (or in any successor regulation or other related guidance or rule that may be issued by the Administrator) other than a business concern described in paragraph (a) or (k) of such section.
Except as otherwise provided in this paragraph, the Administrator may guarantee covered loans under the same terms, conditions, and processes as a loan made under this subsection.
Not later than 15 days after the date on which a loan is made under this paragraph, the Administration shall register the loan using the TIN (as defined in section 7701 of title 26) assigned to the borrower.
During the covered period, in addition to small business concerns, any business concern, nonprofit organization, housing cooperative, veterans organization, or Tribal business concern described in section 657a(b)(2)(C) of this title shall be eligible to receive a covered loan if the business concern, nonprofit organization, housing cooperative, veterans organization, or Tribal business concern employs not more than the greater of—
500 employees; or
if applicable, the size standard in number of employees established by the Administration for the industry in which the business concern, nonprofit organization, housing cooperative, veterans organization, or Tribal business concern operates.
During the covered period, individuals who operate under a sole proprietorship or as an independent contractor and eligible self-employed individuals shall be eligible to receive a covered loan.
An eligible self-employed individual, independent contractor, or sole proprietorship seeking a covered loan shall submit such documentation as determined necessary by the Administrator and the Secretary, to establish the applicant as eligible.
During the covered period, any business concern that employs not more than 500 employees per physical location of the business concern and that is assigned a North American Industry Classification System code beginning with 72 at the time of disbursal shall be eligible to receive a covered loan.
In this subclause, the term “included business concern” means a business concern, including any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (47 U.S.C. 301 et seq.) without regard for whether such a station is a concern as defined in section 121.105 of title 13, Code of Federal Regulations, or any successor thereto—
that employs not more than 500 employees, or the size standard established by the Administrator for the North American Industry Classification System code applicable to the business concern, per physical location of such business concern; or
any nonprofit organization or any organization otherwise subject to section 511(a)(2)(B) of title 26 that is a public broadcasting entity (as defined in section 397(11) of the Communications Act of 1934 (47 U.S.C. 397(11))).
During the covered period, an included business concern shall be eligible to receive a covered loan if—
the included business concern is majority owned or controlled by a business concern that is assigned a North American Industry Classification System code beginning with 511110 or 5151 or, with respect to a public broadcasting entity (as defined in section 397(11) of the Communications Act of 1934 (47 U.S.C. 397(11))), has a trade or business that falls under such a code; and
the included business concern makes a good faith certification that proceeds of the loan will be used to support expenses at the component of the included business concern that produces or distributes locally focused or emergency information.
Subject to the provisions in this subparagraph, during the covered period—
a nonprofit organization shall be eligible to receive a covered loan if the nonprofit organization employs not more than 500 employees per physical location of the organization; and
an additional covered nonprofit entity and an organization that, but for subclauses (I)(dd) and (II)(dd) of clause (vii), would be eligible for a covered loan under clause (vii) shall be eligible to receive a covered loan if the entity or organization employs not more than 300 employees per physical location of the entity or organization.
A business concern or other organization that was not eligible to receive a covered loan the day before March 11, 2021, is assigned a North American Industry Classification System code of 519130, certifies in good faith as an Internet-only news publisher or Internet-only periodical publisher, and is engaged in the collection and distribution of local or regional and national news and information shall be eligible to receive a covered loan for the continued provision of news, information, content, or emergency information if—
the business concern or organization employs not more than 500 employees, or the size standard established by the Administrator for that North American Industry Classification code, per physical location of the business concern or organization; and
the business concern or organization makes a good faith certification that proceeds of the loan will be used to support expenses at the component of the business concern or organization that supports local or regional news.
During the covered period, the provisions applicable to affiliations under section 121.103 of title 13, Code of Federal Regulations, or any successor regulation, are waived with respect to eligibility for a covered loan for—
any business concern with not more than 500 employees that, as of the date on which the covered loan is disbursed, is assigned a North American Industry Classification System code beginning with 72;
any business concern operating as a franchise that is assigned a franchise identifier code by the Administration;
any business concern that receives financial assistance from a company licensed under section 681 of this title;
any business concern (including any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (47 U.S.C. 301 et seq.) without regard for whether such a station is a concern as defined in section 121.105 of title 13, Code of Federal Regulations, or any successor thereto) that employs not more than 500 employees, or the size standard established by the Administrator for the North American Industry Classification System code applicable to the business concern, per physical location of such business concern and is majority owned or controlled by a business concern that is assigned a North American Industry Classification System code beginning with 511110 or 5151; or
any nonprofit organization that is assigned a North American Industry Classification System code beginning with 5151; and
any business concern or other organization that was not eligible to receive a covered loan the day before March 11, 2021, is assigned a North American Industry Classification System code of 519130, certifies in good faith as an Internet-only news publisher or Internet-only periodical publisher, and is engaged in the collection and distribution of local or regional and national news and information, if the business concern or organization—
employs not more than 500 employees, or the size standard established by the Administrator for that North American Industry Classification code, per physical location of the business concern or organization; and
is majority owned or controlled by a business concern or organization that is assigned a North American Industry Classification System code of 519130.
For purposes of determining whether a business concern, nonprofit organization, veterans organization, or Tribal business concern described in section 657a(b)(2)(C) of this title employs not more than 500 employees under clause (i)(I), or for purposes of determining the number of employees of a housing cooperative or a business concern or organization made eligible for a loan under this paragraph under subclause (II), (III), or (IV) of clause (iii), subclause (IV) or (V) of clause (iv), clause (vii), or clause (ix), the term “employee” includes individuals employed on a full-time, part-time, or other basis.
The provisions applicable to affiliations under section 121.103 of title 13, Code of Federal Regulations, or any successor thereto, shall apply with respect to a nonprofit organization, a business concern or organization made eligible for a loan under this paragraph under clause (vii), a housing cooperative, and a veterans organization in the same manner as with respect to a small business concern.
Any organization that is described in section 501(c)(6) of title 26 and that is exempt from taxation under section 501(a) of such title (excluding professional sports leagues and organizations with the purpose of promoting or participating in a political campaign or other activity) shall be eligible to receive a covered loan if—
the organization does not receive more than 15 percent of its receipts from lobbying activities;
the lobbying activities of the organization do not comprise more than 15 percent of the total activities of the organization;
the cost of the lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year of the organization that ended prior to February 15, 2020; and
the organization employs not more than 300 employees.
Any destination marketing organization shall be eligible to receive a covered loan if—
the destination marketing organization does not receive more than 15 percent of its receipts from lobbying activities;
the lobbying activities of the destination marketing organization do not comprise more than 15 percent of the total activities of the organization;
the cost of the lobbying activities of the destination marketing organization did not exceed $1,000,000 during the most recent tax year of the destination marketing organization that ended prior to February 15, 2020; and 6
the destination marketing organization employs not more than 300 employees; and
the destination marketing organization—
is described in section 501(c) of title 26 and is exempt from taxation under section 501(a) of such title; or
is a quasi-governmental entity or is a political subdivision of a State or local government, including any instrumentality of those entities.
Subject to subclause (II), and notwithstanding any other provision of this paragraph, on and after December 27, 2020, an entity that is an issuer, the securities of which are listed on an exchange registered as a national securities exchange under section 78f of this title, shall be ineligible to receive a covered loan under this paragraph.
With respect to a business concern or organization made eligible by subclause (II) or (IV) of clause (iii) or subclause (IV) or (V) of clause (iv) of this subparagraph, the Administrator shall not consider whether any affiliated entity, which for purposes of this subclause shall include any entity that owns or controls such business concern or organization, is an issuer.
An additional covered nonprofit entity shall be eligible to receive a covered loan if—
the additional covered nonprofit entity does not receive more than 15 percent of its receipts from lobbying activities;
the lobbying activities of the additional covered nonprofit entity do not comprise more than 15 percent of the total activities of the organization;
the cost of the lobbying activities of the additional covered nonprofit entity did not exceed $1,000,000 during the most recent tax year of the additional covered nonprofit entity that ended prior to February 15, 2020; and
the additional covered nonprofit entity employs not more than 300 employees.
Except as provided in subparagraph (V), during the covered period, with respect to a covered loan, the maximum loan amount shall be the lesser of—
the sum of—
the product obtained by multiplying—
the average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the date on which the loan is made, except that an applicant that is a seasonal employer shall use the average total monthly payments for payroll for any 12-week period selected by the seasonal employer between February 15, 2019, and February 15, 2020; by
2.5; and
the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on the date on which covered loans are made available to be refinanced under the covered loan; or
if requested by an otherwise eligible recipient that was not in business during the period beginning on February 15, 2019 and ending on June 30, 2019, the sum of—
the product obtained by multiplying—
the average total monthly payments by the applicant for payroll costs incurred during the period beginning on January 1, 2020 and ending on February 29, 2020; by
2.5; and
the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on the date on which covered loans are made available to be refinanced under the covered loan; or
$10,000,000.
During the covered period, an eligible recipient may, in addition to the allowable uses of a loan made under this subsection, use the proceeds of the covered loan for—
payroll costs;
costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
employee salaries, commissions, or similar compensations;
payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
rent (including rent under a lease agreement);
utilities;
interest on any other debt obligations that were incurred before the covered period;
covered operations expenditures, as defined in section 636m(a) of this title;
covered property damage costs, as defined in section 636m(a) of this title;
covered supplier costs, as defined in section 636m(a) of this title; and
covered worker protection expenditures, as defined in section 636m(a) of this title.
For purposes of making covered loans for the purposes described in clause (i), a lender approved to make loans under this subsection shall be deemed to have been delegated authority by the Administrator to make and approve covered loans, subject to the provisions of this paragraph.
In evaluating the eligibility of a borrower for a covered loan with the terms described in this paragraph, a lender shall consider whether the borrower—
was in operation on February 15, 2020; and
had employees for whom the borrower paid salaries and payroll taxes; or
paid independent contractors, as reported on a Form 1099–MISC.
The authority to make loans under this paragraph shall be extended to additional lenders determined by the Administrator and the Secretary of the Treasury to have the necessary qualifications to process, close, disburse and service loans made with the guarantee of the Administration.
A loan made under subsection (b)(2) during the period beginning on January 31, 2020 and ending on the date on which covered loans are made available may be refinanced as part of a covered loan.
Notwithstanding the waiver of the personal guarantee requirement or collateral under subparagraph (J), the Administrator shall have no recourse against any individual shareholder, member, or partner of an eligible recipient of a covered loan for nonpayment of any covered loan, except to the extent that such shareholder, member, or partner uses the covered loan proceeds for a purpose not authorized under clause (i) or (iv).
None of the proceeds of a covered loan may be used for—
lobbying activities, as defined in section 1602 of title 2;
lobbying expenditures related to a State or local election; or
expenditures designed to influence the enactment of legislation, appropriations, regulation, administrative action, or Executive order proposed or pending before Congress or any State government, State legislature, or local legislature or legislative body.
An eligible recipient applying for a covered loan shall make a good faith certification—
that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient;
acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments;
that the eligible recipient does not have an application pending for a loan under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan; and
during the period beginning on February 15, 2020 and ending on December 31, 2020, that the eligible recipient has not received amounts under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan.
With respect to a covered loan—
in lieu of the fee otherwise applicable under paragraph (23)(A), the Administrator shall collect no fee; and
in lieu of the fee otherwise applicable under paragraph (18)(A), the Administrator shall collect no fee.
During the covered period, the requirement that a small business concern is unable to obtain credit elsewhere, as defined in section 632(h) of this title, shall not apply to a covered loan.
With respect to a covered loan—
no personal guarantee shall be required for the covered loan; and
no collateral shall be required for the covered loan.
With respect to a covered loan that has a remaining balance after reduction based on the loan forgiveness amount under section 636m of this title—
the remaining balance shall continue to be guaranteed by the Administration under this subsection; and
the covered loan shall have a minimum maturity of 5 years and a maximum maturity of 10 years from the date on which the borrower applies for loan forgiveness under that section.
A covered loan shall bear an interest rate not to exceed 4 percent, calculated on a non-compounding, non-adjustable basis.
In this subparagraph, the term “impacted borrower” means an eligible recipient that—
is in operation on February 15, 2020; and
has an application for a covered loan that is approved or pending approval on or after March 27, 2020.
For purposes of this subparagraph, an impacted borrower is presumed to have been adversely impacted by COVID–19.
The Administrator shall—
consider each eligible recipient that applies for a covered loan to be an impacted borrower; and
require lenders under this subsection to provide complete payment deferment relief for impacted borrowers with covered loans, including payment of principal, interest, and fees, until the date on which the amount of forgiveness determined under section 636m of this title is remitted to the lender.
With respect to a covered loan that is sold on the secondary market, if an investor declines to approve a deferral requested by a lender under clause (ii), the Administrator shall exercise the authority to purchase the loan so that the impacted borrower may receive a deferral, including payment of principal, interest, and fees, until the date on which the amount of forgiveness determined under section 636m of this title is remitted to the lender.
Not later than 30 days after March 27, 2020, the Administrator shall provide guidance to lenders under this paragraph on the deferment process described in this subparagraph.
If an eligible recipient fails to apply for forgiveness of a covered loan within 10 months after the last day of the covered period defined in section 636m(a) of this title, such eligible recipient shall make payments of principal, interest, and fees on such covered loan beginning on the day that is not earlier than the date that is 10 months after the last day of such covered period.
A covered loan shall be eligible to be sold in the secondary market consistent with this subsection. The Administrator may not collect any fee for any guarantee sold into the secondary market under this subparagraph.
With respect to the appropriate Federal banking agencies or the National Credit Union Administration Board applying capital requirements under their respective risk-based capital requirements, a covered loan shall receive a risk weight of zero percent.
Notwithstanding any other provision of law, an insured depository institution or an insured credit union that modifies a covered loan in relation to COVID–19-related difficulties in a troubled debt restructuring on or after March 13, 2020, shall not be required to comply with the Financial Accounting Standards Board Accounting Standards Codification Subtopic 310–40 (“Receivables – Troubled Debt Restructurings by Creditors”) for purposes of compliance with the requirements of the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.), until such time and under such circumstances as the appropriate Federal banking agency or the National Credit Union Administration Board, as applicable, determines appropriate.
The Administrator shall reimburse a lender authorized to make a covered loan as follows:
With respect to a covered loan made during the period beginning on March 27, 2020, and ending on the day before December 27, 2020, the Administrator shall reimburse such a lender at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
5 percent for loans of not more than $350,000;
3 percent for loans of more than $350,000 and less than $2,000,000; and
1 percent for loans of not less than $2,000,000.
With respect to a covered loan made on or after December 27, 2020, the Administrator shall reimburse such a lender—
for a covered loan of not more than $50,000, in an amount equal to the lesser of—
50 percent of the balance of the financing outstanding at the time of disbursement of the covered loan; or
$2,500; and
at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
5 percent for a covered loan of more than $50,000 and not more than $350,000;
3 percent for a covered loan of more than $350,000 and less than $2,000,000; and
1 percent for a covered loan of not less than $2,000,000.
An agent that assists an eligible recipient to prepare an application for a covered loan may not collect a fee in excess of the limits established by the Administrator. If an eligible recipient has knowingly retained an agent, such fees shall be paid by the eligible recipient and may not be paid out of the proceeds of a covered loan. A lender shall only be responsible for paying fees to an agent for services for which the lender directly contracts with the agent.
A reimbursement described in clause (i) shall be made not later than 5 days after the reported disbursement of the covered loan and may not be required to be repaid by a lender unless the lender is found guilty of an act of fraud in connection with the covered loan.
It is the sense of the Senate that the Administrator should issue guidance to lenders and agents to ensure that the processing and disbursement of covered loans prioritizes small business concerns and entities in underserved and rural markets, including veterans and members of the military community, small business concerns owned and controlled by socially and economically disadvantaged individuals (as defined in section 637(d)(3)(C) of this title), women, and businesses in operation for less than 2 years.
Nothing in this paragraph shall prohibit a recipient of an economic injury disaster loan made under subsection (b)(2) that is for a purpose other than paying payroll costs and other obligations described in subparagraph (F) from receiving assistance under this paragraph.
Notwithstanding any other provision of law, there shall be no prepayment penalty for any payment made on a covered loan.
In making loan guarantees under this paragraph after April 24, 2020, the Administrator shall guarantee not less than $30,000,000,000 in loans made by—
insured depository institutions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000; and
credit unions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000.
In making loan guarantees under this paragraph after April 24, 2020, the Administrator shall guarantee not less than $30,000,000,000 in loans made by—
community financial institutions;
insured depository institutions with consolidated assets of less than $10,000,000,000; and
credit unions with consolidated assets of less than $10,000,000,000.
A business or organization that was not in operation on February 15, 2020 shall not be eligible for a loan under this paragraph.
An eligible person or entity (as defined under of 4section 9009a of this title) that receives a grant under such section 9009a shall not be eligible for a loan under this paragraph.
In this subparagraph, the term “covered recipient” means an eligible recipient that—
operates as a sole proprietorship or as an independent contractor, or is an eligible self-employed individual;
reports farm income or expenses on a Schedule F (or any equivalent successor schedule); and
was in business as of February 15, 2020.
With respect to 8 covered recipient without employees, the maximum covered loan amount shall be the lesser of—
the sum of—
the product obtained by multiplying—
the gross income of the covered recipient in 2019, as reported on a Schedule F (or any equivalent successor schedule), that is not more than $100,000, divided by 12; and
2.5; and
the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on April 3, 2020 that the borrower intends to refinance under the covered loan, not including any amount of any advance under the loan that is not required to be repaid; or
$2,000,000.
With respect to a covered recipient with employees, the maximum covered loan amount shall be calculated using the formula described in subparagraph (E), except that the gross income of the covered recipient described in clause (ii)(I)(aa)(AA) of this subparagraph, as divided by 12, shall be added to the sum calculated under subparagraph (E)(i)(I).
A lender that made a covered loan to a covered recipient before December 27, 2020 may, at the request of the covered recipient—
recalculate the maximum loan amount applicable to that covered loan based on the formula described in clause (ii) or (iii), as applicable, if doing so would result in a larger covered loan amount; and
provide the covered recipient with additional covered loan amounts based on that recalculation.
Notwithstanding any other provision of law, any criminal charge or civil enforcement action alleging that a borrower engaged in fraud with respect to a covered loan guaranteed under this paragraph shall be filed not later than 10 years after the offense was committed.
In this paragraph—
the terms “additional covered nonprofit entity”, “eligible self-employed individual”, “housing cooperative”, “nonprofit organization”, “payroll costs”, “seasonal employer”, and “veterans organization” have the meanings given those terms in paragraph (36), except that “eligible entity” shall be substituted for “eligible recipient” each place it appears in the definitions of those terms;
the term “covered loan” means a loan made under this paragraph;
the terms “covered mortgage obligation”, “covered operating expenditure”, “covered property damage cost”, “covered rent obligation”, “covered supplier cost”, “covered utility payment”, and “covered worker protection expenditure” have the meanings given those terms in section 636m(a) of this title;
the term “eligible entity”—
means any business concern, nonprofit organization, housing cooperative, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative that—
employs not more than 300 employees; and
except as provided in subitems (BB), (CC), and (DD), had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter in 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the same quarter in 2019;
if the entity was not in business during the first or second quarter of 2019, but was in business during the third and fourth quarter of 2019, had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the third or fourth quarter of 2019;
if the entity was not in business during the first, second, or third quarter of 2019, but was in business during the fourth quarter of 2019, had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the fourth quarter of 2019; or
if the entity was not in business during 2019, but was in operation on February 15, 2020, had gross receipts during the second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the first quarter of 2020;
includes a business concern or organization made eligible for a loan under paragraph (36) under subclause (II), (III), or (IV) of clause (iii), subclause (IV) or (V) of clause (iv), clause (vii), or clause (ix) of subparagraph (D) of paragraph (36) and that meets the requirements described in items (aa) and (bb) of subclause (I); and
does not include—
any entity that is a type of business concern (or would be, if such entity were a business concern) described in section 120.110 of title 13, Code of Federal Regulations (or in any successor regulation or other related guidance or rule that may be issued by the Administrator) other than a business concern described in subsection (a) or (k) of such section; or
any business concern or entity primarily engaged in political or lobbying activities, which shall include any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents;
any business concern or entity—
for which an entity created in or organized under the laws of the People’s Republic of China or the Special Administrative Region of Hong Kong, or that has significant operations in the People’s Republic of China or the Special Administrative Region of Hong Kong, owns or holds, directly or indirectly, not less than 20 percent of the economic interest of the business concern or entity, including as equity shares or a capital or profit interest in a limited liability company or partnership; or
that retains, as a member of the board of directors of the business concern, a person who is a resident of the People’s Republic of China;
any person required to submit a registration statement under section 612 of title 22; or
an eligible person or entity (as defined under section 9009a of this title) that receives a grant under such section 9009a; and
the term “Tribal business concern” means a Tribal business concern described in section 657a(b)(2)(C) of this title.
Except as otherwise provided in this paragraph, the Administrator may guarantee covered loans to eligible entities under the same terms, conditions, and processes as a loan made under paragraph (36).
Except as otherwise provided in this subparagraph, the maximum amount of a covered loan made to an eligible entity is the lesser of—
the product obtained by multiplying—
at the election of the eligible entity, the average total monthly payment for payroll costs incurred or paid by the eligible entity during—
the 1-year period before the date on which the loan is made; or
calendar year 2019; by
2.5; or
$2,000,000.
The maximum amount of a covered loan made to an eligible entity that is a seasonal employer is the lesser of—
the product obtained by multiplying—
at the election of the eligible entity, the average total monthly payments for payroll costs incurred or paid by the eligible entity for any 12-week period between February 15, 2019 and February 15, 2020; by
2.5; or
$2,000,000.
The maximum amount of a covered loan made to an eligible entity that did not exist during the 1-year period preceding February 15, 2020 is the lesser of—
the product obtained by multiplying—
the quotient obtained by dividing—
the sum of the total monthly payments by the eligible entity for payroll costs paid or incurred by the eligible entity as of the date on which the eligible entity applies for the covered loan; by
the number of months in which those payroll costs were paid or incurred; by
2.5; or
$2,000,000.
The maximum amount of a covered loan made to an eligible entity that is assigned a North American Industry Classification System code beginning with 72 at the time of disbursal is the lesser of—
the product obtained by multiplying—
at the election of the eligible entity, the average total monthly payment for payroll costs incurred or paid by the eligible entity during—
the 1-year period before the date on which the loan is made; or
calendar year 2019; by
3.5; or
$2,000,000.
For a business concern with more than 1 physical location, the business concern shall be an eligible entity if the business concern would be eligible for a loan under paragraph (36) pursuant to clause (iii) of subparagraph (D) of such paragraph, as applied in accordance with clause (ii) of this subparagraph, and meets the revenue reduction requirements described in item (bb) of subparagraph (A)(iv)(I).
For purposes of applying clause (i), the Administrator shall substitute “not more than 300 employees” for “not more than 500 employees” in paragraph (36)(D)(iii).
The waiver described in paragraph (36)(D)(iv) shall apply for purposes of determining eligibility under this paragraph.
For purposes of applying clause (i), the Administrator shall substitute “not more than 300 employees” for “not more than 500 employees” in subclause (I) and (IV) of paragraph (36)(D)(iv).
An eligible entity may only receive 1 covered loan.
An eligible entity applying for a covered loan shall not be required to make the certification described in clause (iii) or (iv) of paragraph (36)(G).
With respect to a covered loan—
in lieu of the fee otherwise applicable under paragraph (23)(A), the Administrator shall collect no fee; and
in lieu of the fee otherwise applicable under paragraph (18)(A), the Administrator shall collect no fee.
For a covered loan of not more than $150,000, the eligible entity—
may submit a certification attesting that the eligible entity meets the applicable revenue loss requirement under subparagraph (A)(iv)(I)(bb); and
if the eligible entity submits a certification under subclause (I), shall, on or before the date on which the eligible entity submits an application for forgiveness under subparagraph (J), produce adequate documentation that the eligible entity met such revenue loss standard.
For purposes of calculating gross receipts under subparagraph (A)(iv)(I)(bb) for an eligible entity that is a nonprofit organization, a veterans organization, or an organization described in subparagraph (A)(iv)(II), gross receipts means gross receipts within the meaning of section 6033 of title 26.
In this subparagraph, the term “covered period” has the meaning given that term in section 636m(a) of this title.
Except as otherwise provided in this subparagraph, an eligible entity shall be eligible for forgiveness of indebtedness on a covered loan in the same manner as an eligible recipient with respect to a loan made under paragraph (36) of this section, as described in section 636m of this title.
An eligible entity shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred or expenditures made during the covered period:
Payroll costs, excluding any payroll costs that are—
qualified wages, as defined in subsection (c)(3) of section 2301 of the CARES Act (26 U.S.C. 3111 note), taken into account in determining the credit allowed under such section;
qualified wages taken into account in determining the credit allowed under subsection (a) or (d) of section 303 of the Taxpayer Certainty and Disaster Relief Act of 2020; or
premiums taken into account in determining the credit allowed under section 6432 of title 26.
Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
Any covered operations expenditure.
Any covered property damage cost.
Any payment on any covered rent obligation.
Any covered utility payment.
Any covered supplier cost.
Any covered worker protection expenditure.
Subject to any reductions under section 636m(d) of this title, the forgiveness amount under this subparagraph shall be equal to the lesser of—
the amount described in clause (ii); and
the amount equal to the quotient obtained by dividing—
the amount of the covered loan used for payroll costs during the covered period; and
0.60.
For purposes of applying subsection (l)(1) of section 636m of this title to a covered loan of not more than $150,000 under this paragraph, an eligible entity may be required to provide, at the time of the application for forgiveness, documentation required to substantiate revenue loss in accordance with subparagraph (I).
Except as otherwise provided in this paragraph, a lender approved to make loans under paragraph (36) may make covered loans under the same terms and conditions as in paragraph (36).
The Administrator shall reimburse a lender authorized to make a covered loan—
for a covered loan of not more than $50,000, in an amount equal to the lesser of—
50 percent of the balance of the financing outstanding at the time of disbursement of the covered loan; or
$2,500;
at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
5 percent for a covered loan of more than $50,000 and not more than $350,000; and
3 percent for a covered loan of more than $350,000.
Not later than 10 days after December 27, 2020, the Administrator shall issue guidance addressing barriers to accessing capital for minority, underserved, veteran, and women-owned business concerns for the purpose of ensuring equitable access to covered loans.
The Administrator shall, to the maximum extent practicable, allow a lender approved to make covered loans to use existing program guidance and standard operating procedures for loans made under this subsection.
A covered loan under this paragraph may only be made to an eligible entity that—
has received a loan under paragraph (36); and
on or before the expected date on which the covered loan under this paragraph is disbursed to the eligible entity, has used, or will use, the full amount of the loan received under paragraph (36).
Notwithstanding any other provision of law, any criminal charge or civil enforcement action alleging that a borrower engaged in fraud with respect to a covered loan guaranteed under this paragraph shall be filed not later than 10 years after the offense was committed.
The Administration is empowered to the extent and in such amounts as provided in advance in appropriation Acts to make loans for plant acquisition, construction, conversion, or expansion, including the acquisition of land, material, supplies, equipment, and working capital, and to make loans to any qualified small business concern, including those owned by qualified Indian tribes, for purposes of this chapter. Such financings may be made either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis. These powers shall be subject, however, to the following restrictions, limitations, and provisions:
The Administrator has the authority to direct, and conduct oversight for, the methods by which lenders determine whether a borrower is able to obtain credit elsewhere. No financial assistance shall be extended pursuant to this subsection if the applicant can obtain credit elsewhere. No immediate participation may be purchased unless it is shown that a deferred participation is not available; and no direct financing may be made unless it is shown that a participation is not available.
On and after October 1, 2015, the Administrator may not guarantee a loan under this subsection if the lender determines that the borrower is unable to obtain credit elsewhere solely because the liquidity of the lender depends upon the guaranteed portion of the loan being sold on the secondary market.
Prior to the approval of any loan made pursuant to this subsection, or section 503 of the Small Business Investment Act of 1958 [15 U.S.C. 697], the Administrator may verify the applicant’s criminal background, or lack thereof, through the best available means, including, if possible, use of the National Crime Information Center computer system at the Federal Bureau of Investigation.
On and after October 1, 2015, the Administrator may not guarantee a loan under this subsection if the sole purpose for requesting the guarantee is to allow the lender to exceed the legal lending limit of the lender.
Except as provided in subparagraphs (B), (D), (E), and (F), in an agreement to participate in a loan on a deferred basis under this subsection (including a loan made under the Preferred Lenders Program), such participation by the Administration shall be equal to—
75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance exceeds $150,000; or
85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance is less than or equal to $150,000.
The guarantee percentage specified by subparagraph (A) for any loan under this subsection may be reduced upon the request of the participating lender.
The Administration shall not use the guarantee percentage requested by a participating lender under clause (i) as a criterion for establishing priorities in approving loan guarantee requests under this subsection.
The maximum interest rate for a loan guaranteed under the Preferred Lenders Program shall not exceed the maximum interest rate, as determined by the Administration, applicable to other loans guaranteed under this subsection.
Any lender that is participating in the Delegated Authority Lender Program of the Export-Import Bank of the United States (or any successor to the Program) shall be eligible to participate in the Preferred Lenders Program.
For purposes of this subparagraph, the term “Preferred Lenders Program” means any program established by the Administrator, as authorized under the proviso in section 634(b)(7) of this title, under which a written agreement between the lender and the Administration delegates to the lender—
complete authority to make and close loans with a guarantee from the Administration without obtaining the prior specific approval of the Administration; and
complete authority to service and liquidate such loans without obtaining the prior specific approval of the Administration for routine servicing and liquidation activities, but shall not take any actions creating an actual or apparent conflict of interest.
In an agreement to participate in a loan on a deferred basis under the Export Working Capital Program established pursuant to paragraph (14)(A), such participation by the Administration shall be 90 percent.
In an agreement to participate in a loan on a deferred basis under paragraph (16), the participation by the Administration may not exceed 90 percent.
In an agreement to participate in a loan on a deferred basis under paragraph (36), the participation by the Administration shall be 100 percent.
No loan shall be made under this subsection—
if the total amount outstanding and committed (by participation or otherwise) to the borrower from the business loan and investment fund established by this chapter would exceed $3,750,000 (or if the gross loan amount would exceed $5,000,000), except as provided in subparagraph (B);
if the total amount outstanding and committed (on a deferred basis) solely for the purposes provided in paragraph (16) to the borrower from the business loan and investment fund established by this chapter would exceed $4,500,000 (or if the gross loan amount would exceed $5,000,000), of which not more than $4,000,000 may be used for working capital, supplies, or financings under paragraph (14) for export purposes; and
if effected either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate basis if the amount would exceed $350,000.
Notwithstanding the provisions of the constitution of any State or the laws of any State limiting the rate or amount of interest which may be charged, taken, received, or reserved, the maximum legal rate of interest on any financing made on a deferred basis pursuant to this subsection shall not exceed a rate prescribed by the Administration, and the rate of interest for the Administration’s share of any direct or immediate participation loan shall not exceed the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans and adjusted to the nearest one-eighth of 1 per centum, and an additional amount as determined by the Administration, but not to exceed 1 per centum per annum: Provided, That for those loans to assist any public or private organization for the handicapped or to assist any handicapped individual as provided in paragraph (10) of this subsection, the interest rate shall be 3 per centum per annum.
Any bank or other lending institution making a claim for payment on the guaranteed portion of a loan made under this subsection shall be paid the accrued interest due on the loan from the earliest date of default to the date of payment of the claim at a rate not to exceed the rate of interest on the loan on the date of default, minus one percent.
If a loan described in clause (i) is sold on the secondary market, the amount of interest paid to a bank or other lending institution described in that clause from the earliest date of default to the date of payment of the claim shall be no more than the agreed upon rate, minus one percent.
Clauses (i) and (ii) shall not apply to loans made on or after October 1, 2000.
A borrower who prepays any loan guaranteed under this subsection shall remit to the Administration a subsidy recoupment fee calculated in accordance with clause (ii) if—
the loan is for a term of not less than 15 years;
the prepayment is voluntary;
the amount of prepayment in any calendar year is more than 25 percent of the outstanding balance of the loan; and
the prepayment is made within the first 3 years after disbursement of the loan proceeds.
The subsidy recoupment fee charged under clause (i) shall be—
5 percent of the amount of prepayment, if the borrower prepays during the first year after disbursement;
3 percent of the amount of prepayment, if the borrower prepays during the second year after disbursement; and
1 percent of the amount of prepayment, if the borrower prepays during the third year after disbursement.
No such loans including renewals and extensions thereof may be made for a period or periods exceeding twenty-five years, except that such portion of a loan made for the purpose of acquiring real property or constructing, converting, or expanding facilities may have a maturity of twenty-five years plus such additional period as is estimated may be required to complete such construction, conversion, or expansion.
All loans made under this subsection shall be of such sound value or so secured as reasonably to assure repayment: Provided, however, That—
for loans to assist any public or private organization or to assist any handicapped individual as provided in paragraph (10) of this subsection any reasonable doubt shall be resolved in favor of the applicant;
recognizing that greater risk may be associated with loans for energy measures as provided in paragraph (12) of this subsection, factors in determining “sound value” shall include, but not be limited to, quality of the product or service; technical qualifications of the applicant or his employees; sales projections; and the financial status of the business concern: Provided further, That such status need not be as sound as that required for general loans under this subsection; and 1
Repealed. Pub. L. 97–35, title XIX, § 1910, Aug. 13, 1981, 95 Stat. 778.
On that portion of the loan used to refinance existing indebtedness held by a bank or other lending institution, the Administration shall limit the amount of deferred participation to 80 per centum of the amount of the loan at the time of disbursement: Provided further, That any authority conferred by this subparagraph on the Administration shall be exercised solely by the Administration and shall not be delegated to other than Administration personnel.
The Administrator may defer payments on the principal and interest of such loans for a grace period and use such other methods as it deems necessary and appropriate to assure the successful establishment and operation of such concern.
With respect to a deferral provided under this paragraph, the Administrator may allow lenders under this subsection—
to provide full payment deferment relief (including payment of principal and interest) for a period of not more than 1 year; and
to provide an additional deferment period if the borrower provides documentation justifying such additional deferment.
Except as provided in clause (ii), if an investor declines to approve a deferral or additional deferment requested by a lender under subparagraph (B), the Administrator shall exercise the authority to purchase the loan so that the borrower may receive full payment deferment relief (including payment of principal and interest) or an additional deferment as described in subparagraph (B).
If, in a fiscal year, the Administrator determines that the cost of implementing clause (i) is greater than zero, the Administrator shall not implement that clause.
The Administration may make loans under this subsection to small business concerns owned and controlled by disabled veterans (as defined in section 4211(3) of title 38).
The Administration may provide loans under this subsection to finance residential or commercial construction or rehabilitation for sale: Provided, however, That such loans shall not be used primarily for the acquisition of land.
The Administration may provide guaranteed loans under this subsection to assist any public or private organization for the handicapped or to assist any handicapped individual, including service-disabled veterans, in establishing, acquiring, or operating a small business concern.
The Administration may provide loans under this subsection to any small business concern, or to any qualified person seeking to establish such a concern when it determines that such loan will further the policies established in section 631(c) 2 of this title, with particular emphasis on the preservation or establishment of small business concerns located in urban or rural areas with high proportions of unemployed or low-income individuals or owned by low-income individuals.
The Administration may provide loans under this subsection to assist any small business concern, including start up, to enable such concern to design architecturally or engineer, manufacture, distribute, market, install, or service energy measures: Provided, however, That such loan proceeds shall not be used primarily for research and development.
3 The Administration may provide deferred participation loans under this subsection to finance the planning, design, or installation of pollution control facilities for the purposes set forth in section 404 of the Small Business Investment Act of 1958 [15 U.S.C. 694–1]. Notwithstanding the limitation expressed in paragraph (3) of this subsection, a loan made under this paragraph may not result in a total amount outstanding and committed to a borrower from the business loan and investment fund of more than $1,000,000.
The Administration may provide financings under this subsection to State and local development companies for the purposes of, and subject to the restrictions in, title V of the Small Business Investment Act of 1958 [15 U.S.C. 695 et seq.].
The Administrator may provide extensions of credit, standby letters of credit, revolving lines of credit for export purposes, and other financing to enable small business concerns, including small business export trading companies and small business export management companies, to develop foreign markets. A bank or participating lending institution may establish the rate of interest on such financings as may be legal and reasonable.
The Administrator may not guarantee a loan under this paragraph of more than $5,000,000.
For a loan under this paragraph, the Administrator shall collect the fee assessed under paragraph (23) not more frequently than once each year.
The Administrator may not assess a fee on capital that is not accessed by the small business concern.
When considering loan or guarantee applications, the Administration shall give weight to export-related benefits, including opening new markets for United States goods and services abroad and encouraging the involvement of small businesses, including agricultural concerns, in the export market.
The Administrator shall aggressively market its export financing program to small businesses.
The Administration may guarantee loans under this subsection—
to qualified employee trusts with respect to a small business concern for the purpose of purchasing, and for any transaction costs associated with purchasing, stock of the concern under a plan approved by the Administrator which, when carried out, results in the qualified employee trust owning at least 51 per centum of the stock of the concern; and
to a small business concern under a plan approved by the Administrator, if the proceeds from the loan are only used to make a loan to a qualified employee trust, and for any transaction costs associated with making that loan, that results in the qualified employee trust owning at least 51 percent of the small business concern.
The plan requiring the Administrator’s approval under subparagraph (A) shall be submitted to the Administration by the trustee of such trust or by the small business concern with its application for the guarantee. Such plan shall include an agreement with the Administrator which is binding on such trust and on the small business concern and which provides that—
not later than the date the loan guaranteed under subparagraph (A) is repaid (or as soon thereafter as is consistent with the requirements of section 401(a) of title 26), at least 51 per centum of the total stock of such concern shall be allocated to the accounts of at least 51 per centum of the employees of such concern who are entitled to share in such allocation,
there will be periodic reviews of the role in the management of such concern of employees to whose accounts stock is allocated,
there will be adequate management to assure management expertise and continuity, and
with respect to a loan made to a trust, or to a cooperative in accordance with paragraph (35)—
a seller of the small business concern may remain involved as an officer, director, or key employee of the small business concern when a qualified employee trust or cooperative has acquired 100 percent of ownership of the small business concern; and
any seller of the small business concern who remains as an owner of the small business concern, regardless of the percentage of ownership interest, shall be required to provide a personal guarantee by the Administration.
In determining whether to guarantee any loan under this paragraph, the individual business experience or personal assets of employee-owners shall not be used as criteria, except inasmuch as certain employee-owners may assume managerial responsibilities, in which case business experience may be considered.
For purposes of this paragraph, a corporation which is controlled by any other person shall be treated as a small business concern if such corporation would, after the plan described in subparagraph (B) is carried out, be treated as a small business concern.
The Administration shall compile a separate list of applications for assistance under this paragraph, indicating which applications were accepted and which were denied, and shall report periodically to the Congress on the status of employee-owned firms assisted by the Administration, which shall include—
the total number of loans made to employee-owned business concerns that were guaranteed by the Administrator under this subsection or section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696), including the number of loans made—
to small business concerns owned and controlled by socially and economically disadvantaged individuals; and
to cooperatives;
the total number of financings made to employee-owned business concerns by companies licensed under section 301(c) of the Small Business Investment Act of 1958 (15 U.S.C. 696(c)) [15 U.S.C. 681(c)], including the number of financings made—
to small business concerns owned and controlled by socially and economically disadvantaged individuals; and
to cooperatives; and
any outreach and educational activities conducted by the Administration with respect to employee-owned business concerns.
A small business concern that makes a loan to a qualified employee trust under subparagraph (A)(ii) is not required to contain the same terms and conditions as the loan made to the small business concern that is guaranteed by the Administration under such subparagraph.
With respect to a loan made to a qualified employee trust under this paragraph, or to a cooperative in accordance with paragraph (35), the Administrator may, as deemed appropriate, elect to not require any mandatory equity to be provided by the qualified employee trust or cooperative to make the loan.
If the Administrator determines that a loan guaranteed under this subsection will allow an eligible small business concern that is engaged in or adversely affected by international trade to improve its competitive position, the Administrator may make such loan to assist such concern—
in the financing of the acquisition, construction, renovation, modernization, improvement, or expansion of productive facilities or equipment to be used in the United States in the production of goods and services involved in international trade;
in the refinancing of existing indebtedness that is not structured with reasonable terms and conditions, including any debt that qualifies for refinancing under any other provision of this subsection; or
by providing working capital.
Except as provided in clause (ii), each loan made under this paragraph shall be secured by a first lien position or first mortgage on the property or equipment financed by the loan or on other assets of the small business concern.
A loan under this paragraph may be secured by a second lien position on the property or equipment financed by the loan or on other assets of the small business concern, if the Administrator determines the lien provides adequate assurance of the payment of the loan.
For purposes of this paragraph, a small business concern is engaged in international trade if, as determined by the Administrator, the small business concern is in a position to expand existing export markets or develop new export markets.
For purposes of this paragraph, a small business concern is adversely affected by international trade if, as determined by the Administrator, the small business concern—
is confronting increased competition with foreign firms in the relevant market; and
is injured by such competition.
For purposes of subparagraph (D)(ii) the Administrator shall accept any finding of injury by the International Trade Commission or any finding of injury by the Secretary of Commerce pursuant to chapter 3 of title II of the Trade Act of 1974 [19 U.S.C. 2341 et seq.].
The Administrator shall publish an annual list of the banks and participating lending institutions that, during the 1-year period ending on the date of publication of the list, have made loans guaranteed by the Administration under—
this paragraph;
paragraph (14); or
paragraph (34).
The Administrator shall—
post the list published under clause (i) on the website of the Administration; and
make the list published under clause (i) available, upon request, at each district office of the Administration.
The Administration shall authorize lending institutions and other entities in addition to banks to make loans authorized under this subsection.
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 guarantee fee not to exceed 2 percent of the deferred participation share of a total loan amount that is not more than $150,000.
A guarantee fee not to exceed 3 percent of the deferred participation share of a total loan amount that is more than $150,000, but not more than $700,000.
A guarantee fee not to exceed 3.5 percent of the deferred participation share of a total loan amount that is more than $700,000.
In addition to the fee under clause (iii), a guarantee fee equal to 0.25 percent of any portion of the deferred participation share that is more than $1,000,000.
Lenders participating in the programs established under this subsection may retain not more than 25 percent of a fee collected under subparagraph (A)(i).
In addition to the Preferred Lenders Program authorized by the proviso in section 634(b)(7) of this title, the Administration is authorized to establish a Certified Lenders Program for lenders who establish their knowledge of Administration laws and regulations concerning the guaranteed loan program and their proficiency in program requirements. The designation of a lender as a certified lender shall be suspended or revoked at any time that the Administration determines that the lender is not adhering to its rules and regulations or that the loss experience of the lender is excessive as compared to other lenders, but such suspension or revocation shall not affect any outstanding guarantee.
In order to encourage all lending institutions and other entities making loans authorized under this subsection to provide loans of $50,000 or less in guarantees to eligible small business loan applicants, the Administration shall develop and allow participating lenders to solely utilize a uniform and simplified loan form for such loans.
The Administrator may permit lenders participating in the Certified Lenders Program to liquidate loans made with a guarantee from the Administration pursuant to a liquidation plan approved by the Administrator.
If the Administrator does not approve or deny a request for approval of a liquidation plan within 10 business days of the date on which the request is made (or with respect to any routine liquidation activity under such a plan, within 5 business days) such request shall be deemed to be approved.
The Administration is empowered to make loans either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis to small business concerns eligible for assistance under subsection (j)(10) and section 637(a) of this title. Such assistance may be provided only if the Administration determines that—
the type and amount of such assistance requested by such concern is not otherwise available on reasonable terms from other sources;
with such assistance such concern has a reasonable prospect for operating soundly and profitably within a reasonable period of time;
the proceeds of such assistance will be used within a reasonable time for plant construction, conversion, or expansion, including the acquisition of equipment, facilities, machinery, supplies, or material or to supply such concern with working capital to be used in the manufacture of articles, equipment, supplies, or material for defense or civilian production or as may be necessary to insure a well-balanced national economy; and
such assistance is of such sound value as reasonably to assure that the terms under which it is provided will not be breached by the small business concern.
No loan shall be made under this paragraph if the total amount outstanding and committed (by participation or otherwise) to the borrower would exceed $750,000.
Subject to the provisions of clause (i), in agreements to participate in loans on a deferred (guaranteed) basis, participation by the Administration shall be not less than 85 per centum of the balance of the financing outstanding at the time of disbursement.
The rate of interest on financings made on a deferred (guaranteed) basis shall be legal and reasonable.
Financings made pursuant to this paragraph shall be subject to the following limitations:
No immediate participation may be purchased unless it is shown that a deferred participation is not available.
No direct financing may be made unless it is shown that a participation is unavailable.
A direct loan or the Administration’s share of an immediate participation loan made pursuant to this paragraph shall be any secured debt instrument—
that is subordinated by its terms to all other borrowings of the issuer;
the rate of interest on which shall not exceed the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loan and adjusted to the nearest one-eighth of 1 per centum;
the term of which is not more than twenty-five years; and
the principal on which is amortized at such rate as may be deemed appropriate by the Administration, and the interest on which is payable not less often than annually.
The Administration may make loans on a guaranteed basis under the authority of this subsection—
to a small business concern that has been (or can reasonably be expected to be) detrimentally affected by—
the closure (or substantial reduction) of a Department of Defense installation; or
the termination (or substantial reduction) of a Department of Defense program on which such small business was a prime contractor or subcontractor (or supplier) at any tier; or
to a qualified individual or a veteran seeking to establish (or acquire) and operate a small business concern.
Recognizing that greater risk may be associated with a loan to a small business concern described in subparagraph (A)(i), any reasonable doubts concerning the firm’s proposed business plan for transition to nondefense-related markets shall be resolved in favor of the loan applicant when making any determination regarding the sound value of the proposed loan in accordance with paragraph (6).
Loans pursuant to this paragraph shall be authorized in such amounts as provided in advance in appropriation Acts for the purposes of loans under this paragraph.
For purposes of this paragraph a qualified individual is—
a member of the Armed Forces of the United States, honorably discharged from active duty involuntarily or pursuant to a program providing bonuses or other inducements to encourage voluntary separation or early retirement;
a civilian employee of the Department of Defense involuntarily separated from Federal service or retired pursuant to a program offering inducements to encourage early retirement; or
an employee of a prime contractor, subcontractor, or supplier at any tier of a Department of Defense program whose employment is involuntarily terminated (or voluntarily terminated pursuant to a program offering inducements to encourage voluntary separation or early retirement) due to the termination (or substantial reduction) of a Department of Defense program.
In providing assistance under this paragraph, the Administration shall develop procedures to ensure, to the maximum extent practicable, that such assistance is used for projects that—
have the greatest potential for—
creating new jobs for individuals whose employment is involuntarily terminated due to reductions in Federal defense expenditures; or
preventing the loss of jobs by employees of small business concerns described in subparagraph (A)(i); and
have substantial potential for stimulating new economic activity in communities most affected by reductions in Federal defense expenditures.
The Administration is authorized to permit participating lenders to impose and collect a reasonable penalty fee on late payments of loans guaranteed under this subsection in an amount not to exceed 5 percent of the monthly loan payment per month plus interest.
With respect to each loan approved under this subsection, the Administration shall assess, collect, and retain a fee, not to exceed 0.55 percent per year of the outstanding balance of the deferred participation share of the loan, in an amount established once annually by the Administration in the Administration’s annual budget request to Congress, as necessary to reduce to zero the cost to the Administration of making guarantees under this subsection. As used in this paragraph, the term “cost” has the meaning given that term in section 661a of title 2.
The yearly fee assessed under subparagraph (A) shall be payable by the participating lender and shall not be charged to the borrower.
If the Administration determines that fees paid by lenders and by small business borrowers for guarantees under this subsection may be reduced, consistent with reducing to zero the cost to the Administration of making such guarantees—
the Administration shall first consider reducing fees paid by small business borrowers under clauses (i) through (iii) of paragraph (18)(A), to the maximum extent possible; and
fees paid by small business borrowers shall not be increased above the levels in effect on December 8, 2004.
The Administration shall notify the Committees on Small Business of the Senate and the House of Representatives not later than 15 days before making any significant policy or administrative change affecting the operation of the loan program under this subsection.
Not more than 10 percent of the total number of loans guaranteed in any fiscal year under this subsection may be awarded as part of a pilot program which is commenced by the Administrator on or after October 1, 1996.
In this paragraph, the term ‘pilot program’ means any lending program initiative, project, innovation, or other activity not specifically authorized by law.
The Administrator may carry out the low documentation loan program for loans of $100,000 or less only through lenders with significant experience in making small business loans. Not later than 90 days after September 30, 1996, the Administrator shall promulgate regulations defining the experience necessary for participation as a lender in the low documentation loan program.
All fees, interest, and profits received and retained by the Administration under this subsection shall be included in the calculations made by the Director of the Office of Management and Budget to offset the cost (as that term is defined in section 661a of title 2) to the Administration of purchasing and guaranteeing loans under this chapter.
Repealed. Pub. L. 106–8, § 3(c), Apr. 2, 1999, 113 Stat. 16.
In addition to such other lease arrangements as may be authorized by the Administration, a borrower may permanently lease to one or more tenants not more than 20 percent of any property constructed with the proceeds of a loan guaranteed under this subsection, if the borrower permanently occupies and uses not less than 60 percent of the total business space in the property.
With respect to a loan under this subsection that is secured by commercial real property, an appraisal of such property by a State licensed or certified appraiser—
shall be required by the Administration in connection with any such loan, if such loan is in an amount greater than the Federal banking regulator appraisal threshold; or
may be required by the Administration or the lender in connection with any such loan, if such loan is in an amount equal to or less than the Federal banking regulator appraisal threshold, if such appraisal is necessary for appropriate evaluation of creditworthiness.
For purposes of this paragraph, the term “Federal banking regulator appraisal threshold” means the lesser of the threshold amounts set by the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation for when a federally related transaction that is a commercial real estate transaction requires an appraisal prepared by a State licensed or certified appraiser.
Ownership requirements to determine the eligibility of a small business concern that applies for assistance under any credit program under this chapter shall be determined without regard to any ownership interest of a spouse arising solely from the application of the community property laws of a State for purposes of determining marital interests.
As used in this paragraph:
The term “disaster area” means the area for which the President has declared a major disaster, during the 5-year period beginning on the date of the declaration.
The term “express lender” means any lender authorized by the Administration to participate in the Express Loan Program.
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.
The term “Express Loan Program” means the program for express loans established by the Administration under paragraph (25)(B), as in existence on April 5, 2004, with a guarantee rate of not more than 50 percent.
The authority to make an express loan shall be limited to those lenders deemed qualified to make such loans by the Administration. 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 Administration for that lender pursuant to this subsection.
Any express lender shall retain such designation unless the Administration determines that the express lender has violated the law or regulations promulgated by the Administration or modifies the requirements to be an express lender and the lender no longer satisfies those requirements.
The maximum loan amount under the Express Loan Program is $500,000.
Except as otherwise provided in this paragraph, the Administration 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 requiring a lender to make an express loan pursuant to subparagraph (D).
In this subparagraph—
the term “biomass”—
means any organic material that is available on a renewable or recurring basis, including—
agricultural crops;
trees grown for energy production;
wood waste and wood residues;
plants (including aquatic plants and grasses);
residues;
fibers;
animal wastes and other waste materials; and
fats, oils, and greases (including recycled fats, oils, and greases); and
does not include—
paper that is commonly recycled; or
unsegregated solid waste;
the term “energy efficiency project” means the installation or upgrading of equipment that results in a significant reduction in energy usage; and
the term “renewable energy system” means a system of energy derived from—
a wind, solar, biomass (including biodiesel), or geothermal source; or
hydrogen derived from biomass or water using an energy source described in item (aa).
The Administrator may make a loan under the Express Loan Program for the purpose of—
purchasing a renewable energy system; or
carrying out an energy efficiency project for a small business concern.
The Administrator may not collect a guarantee fee described in paragraph (18) in connection with a loan made under this paragraph to a veteran or spouse of a veteran on or after October 1, 2015.
In this subparagraph, the term “veteran or spouse of a veteran” means—
a veteran, as defined in section 632(q)(4) of this title;
an individual who is eligible to participate in the Transition Assistance Program established under section 1144 of title 10;
a member of a reserve component of the Armed Forces named in section 10101 of title 10;
the spouse of an individual described in subclause (I), (II), or (III); or
the surviving spouse (as defined in section 101 of title 38) of an individual described in subclause (I), (II), or (III) who died while serving on active duty or as a result of a disability that is service-connected (as defined in such section).
The Administrator may guarantee an express loan to a small business concern located in a disaster area in accordance with this subparagraph.
For a loan guaranteed under clause (i)—
the maximum loan amount is $150,000; and
the guarantee rate shall be not more than 85 percent.
A loan guaranteed under clause (i) shall not be counted in determining the amount of loans made to a borrower for purposes of subparagraph (D).
A small business concern receiving a loan guaranteed under clause (i) shall certify that the small business concern was in operation on the date on which the applicable major disaster occurred as a condition of receiving the loan.
A loan guaranteed under clause (i) may only be made to a small business concern that demonstrates, to the satisfaction of the Administrator, sufficient capacity to repay the loan.
Not later than 90 days after the date on which a request for purchase is filed with the Administrator, the Administrator shall determine whether to pay the guaranteed portion of the loan.
Notwithstanding any other provision of law, unless there is a subsequent finding of fraud by a court of competent jurisdiction relating to a loan guaranteed under clause (i), on and after the date that is 6 months after the date on which the Administrator determines to pay the guaranteed portion of the loan, the Administrator may not attempt to recapture the paid guarantee.
Unless the Administrator has waived the guarantee fee that would otherwise be collected by the Administrator under paragraph (18) for a loan guaranteed under clause (i), and except as provided in subclause (II), the guarantee fee for the loan shall be equal to the guarantee fee that the Administrator would collect if the guarantee rate for the loan was 50 percent.
Subclause (I) shall not apply if the cost of carrying out the program under this subsection in a fiscal year is more than zero and such cost is directly attributable to the cost of guaranteeing loans under clause (i).
Not later than 270 days after November 25, 2015, the Administrator shall promulgate rules to carry out this subparagraph.
In this paragraph—
the term “cost” has the meaning given that term in section 661a of title 2;
the term “covered energy efficiency loan” means a loan—
made under this subsection; and
the proceeds of which are used to purchase energy efficient designs, equipment, or fixtures, or to reduce the energy consumption of the borrower by 10 percent or more; and
the term “pilot program” means the pilot program established under subparagraph (B) 4
The Administrator shall establish and carry out a pilot program under which the Administrator shall reduce the fees for covered energy efficiency loans.
The pilot program shall terminate at the end of the second full fiscal year after the date that the Administrator establishes the pilot program.
A covered energy efficiency loan shall include the maximum participation levels by the Administrator permitted for loans made under this subsection.
The fee on a covered energy efficiency loan shall be equal to 50 percent of the fee otherwise applicable to that loan under paragraph (18).
The Administrator may waive clause (i) for a fiscal year if—
for the fiscal year before that fiscal year, the annual rate of default of covered energy efficiency loans exceeds that of loans made under this subsection that are not covered energy efficiency loans;
the cost to the Administration of making loans under this subsection is greater than zero and such cost is directly attributable to the cost of making covered energy efficiency loans; and
no additional sources of revenue authority are available to reduce the cost of making loans under this subsection to zero.
If the Administrator waives the reduction of fees under clause (ii), the Administrator—
shall not assess or collect fees in an amount greater than necessary to ensure that the cost of the program under this subsection is not greater than zero; and
shall reinstate the fee reductions under clause (i) when the conditions in clause (ii) no longer apply.
The Administrator shall not increase the fees under paragraph (18) on loans made under this subsection that are not covered energy efficiency loans as a direct result of the pilot program.
Not later than 1 year after the date that the pilot program terminates, the Comptroller General of the United States shall submit to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report on the pilot program.
The report submitted under clause (i) shall include—
the number of covered energy efficiency loans for which fees were reduced under the pilot program;
a description of the energy efficiency savings with the pilot program;
a description of the impact of the pilot program on the program under this subsection;
an evaluation of the efficacy and potential fraud and abuse of the pilot program; and
recommendations for improving the pilot program.
In this paragraph—
the term “cost” has the meaning given that term in section 661a of title 2;
the term “pilot program” means the pilot program established under subparagraph (B); and
the term “veteran participation loan” means a loan made under this subsection to a small business concern owned and controlled by veterans of the Armed Forces or members of the reserve components of the Armed Forces.
The Administrator shall establish and carry out a pilot program under which the Administrator shall reduce the fees for veteran participation loans.
The pilot program shall terminate at the end of the second full fiscal year after the date that the Administrator establishes the pilot program.
A veteran participation loan shall include the maximum participation levels by the Administrator permitted for loans made under this subsection.
The fee on a veteran participation loan shall be equal to 50 percent of the fee otherwise applicable to that loan under paragraph (18).
The Administrator may waive clause (i) for a fiscal year if—
for the fiscal year before that fiscal year, the annual estimated rate of default of veteran participation loans exceeds that of loans made under this subsection that are not veteran participation loans;
the cost to the Administration of making loans under this subsection is greater than zero and such cost is directly attributable to the cost of making veteran participation loans; and
no additional sources of revenue authority are available to reduce the cost of making loans under this subsection to zero.
If the Administrator waives the reduction of fees under clause (ii), the Administrator—
shall not assess or collect fees in an amount greater than necessary to ensure that the cost of the program under this subsection is not greater than zero; and
shall reinstate the fee reductions under clause (i) when the conditions in clause (ii) no longer apply.
The Administrator shall not increase the fees under paragraph (18) on loans made under this subsection that are not veteran participation loans as a direct result of the pilot program.
Not later than 1 year after the date that the pilot program terminates, the Comptroller General of the United States shall submit to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report on the pilot program.
The report submitted under clause (i) shall include—
the number of veteran participation loans for which fees were reduced under the pilot program;
a description of the impact of the pilot program on the program under this subsection;
an evaluation of the efficacy and potential fraud and abuse of the pilot program; and
recommendations for improving the pilot program.
In this paragraph—
the term “export development activity” includes—
obtaining a standby letter of credit when required as a bid bond, performance bond, or advance payment guarantee;
participation in a trade show that takes place outside the United States;
translation of product brochures or catalogues for use in markets outside the United States;
obtaining a general line of credit for export purposes;
performing a service contract from buyers located outside the United States;
obtaining transaction-specific financing associated with completing export orders;
purchasing real estate or equipment to be used in the production of goods or services for export;
providing term loans or other financing to enable a small business concern, including an export trading company and an export management company, to develop a market outside the United States; and
acquiring, constructing, renovating, modernizing, improving, or expanding a production facility or equipment to be used in the United States in the production of goods or services for export; and
the term “express loan” means a loan in which a lender uses to the maximum extent practicable the loan analyses, procedures, and documentation of the lender to provide expedited processing of the loan application.
The Administrator may guarantee the timely payment of an express loan to a small business concern made for an export development activity.
The maximum amount of an express loan guaranteed under this paragraph shall be $500,000.
For an express loan guaranteed under this paragraph, the Administrator shall guarantee—
90 percent of a loan that is not more than $350,000; and
75 percent of a loan that is more than $350,000 and not more than $500,000.
In this paragraph, the term “cooperative” means an entity that is determined to be a cooperative by the Administrator, in accordance with applicable Federal and State laws and regulation.
The Administration shall guarantee loans made to a cooperative for the purpose described in paragraph (15).
In this paragraph—
the terms “appropriate Federal banking agency” and “insured depository institution” have the meanings given those terms in section 1813 of title 12;
the term “covered loan” means a loan made under this paragraph during the covered period;
the term “covered period” means the period beginning on February 15, 2020 and ending on June 30, 2021;
the term “eligible recipient” means an individual or entity that is eligible to receive a covered loan;
the term “eligible self-employed individual” has the meaning given the term in section 7002(b) of the Families First Coronavirus Response Act (Public Law 116–127);
the term “insured credit union” has the meaning given the term in section 1752 of title 12;
the term “nonprofit organization” means an organization that is described in section 501(c)(3) of title 26 and that is exempt from taxation under section 501(a) of title 26;
the term “payroll costs”—
means—
the sum of payments of any compensation with respect to employees that is a—
salary, wage, commission, or similar compensation;
payment of cash tip or equivalent;
payment for vacation, parental, family, medical, or sick leave;
allowance for dismissal or separation;
payment required for the provisions of group health care or group life, disability, vision, or dental insurance benefits, including insurance premiums;
payment of any retirement benefit; or
payment of State or local tax assessed on the compensation of employees; and
the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred; and
shall not include—
the compensation of an individual employee in excess of $100,000 on an annualized basis, as prorated for the period during which the compensation is paid or the obligation to pay the compensation is incurred;
taxes imposed or withheld under chapters 21, 22, or 24 of title 26 during the applicable period;
any compensation of an employee whose principal place of residence is outside of the United States;
qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116–127); or
qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act (Public Law 116–127);
the term “veterans organization” means an organization that is described in section 501(c)(19) of title 26 that is exempt from taxation under section 501(a) of title 26;
the term “community development financial institution” has the meaning given the term in section 4702 of title 12); 5
the term “community financial institutions” means—
a community development financial institution;
a minority depository institution, as defined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note);
a development company that is certified under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.); and
an intermediary, as defined in subsection (m)(11);
the term “credit union” means a State credit union or a Federal credit union, as those terms are defined, respectively, in section 1752 of title 12;
the term “seasonal employer” means an eligible recipient that—
does not operate for more than 7 months in any calendar year; or
during the preceding calendar year, had gross receipts for any 6 months of that year that were not more than 33.33 percent of the gross receipts of the employer for the other 6 months of that year;
the term “housing cooperative” means a cooperative housing corporation (as defined in section 216(b) of title 26) that employs not more than 300 employees;
the term “destination marketing organization” means a nonprofit entity that is—
an organization described in section 501(c) of title 26 and exempt from tax under section 501(a) of such title; or
a State, or a political subdivision of a State (including any instrumentality of such entities)—
engaged in marketing and promoting communities and facilities to businesses and leisure travelers through a range of activities, including—
assisting with the location of meeting and convention sites;
providing travel information on area attractions, lodging accommodations, and restaurants;
providing maps; and
organizing group tours of local historical, recreational, and cultural attractions; or
that is engaged in, and derives the majority of the operating budget of the entity from revenue attributable to, providing live events;
the terms “exchange”, “issuer”, and “security” have the meanings given those terms in section 78c(a) of this title; and
the term “additional covered nonprofit entity”—
means an organization described in any paragraph of section 501(c) of title 26, other than paragraph (3), (4), (6), or (19), and exempt from tax under section 501(a) of such title; and
does not include any entity that, if the entity were a business concern, would be described in section 120.110 of title 13, Code of Federal Regulations (or in any successor regulation or other related guidance or rule that may be issued by the Administrator) other than a business concern described in paragraph (a) or (k) of such section.
Except as otherwise provided in this paragraph, the Administrator may guarantee covered loans under the same terms, conditions, and processes as a loan made under this subsection.
Not later than 15 days after the date on which a loan is made under this paragraph, the Administration shall register the loan using the TIN (as defined in section 7701 of title 26) assigned to the borrower.
During the covered period, in addition to small business concerns, any business concern, nonprofit organization, housing cooperative, veterans organization, or Tribal business concern described in section 657a(b)(2)(C) of this title shall be eligible to receive a covered loan if the business concern, nonprofit organization, housing cooperative, veterans organization, or Tribal business concern employs not more than the greater of—
500 employees; or
if applicable, the size standard in number of employees established by the Administration for the industry in which the business concern, nonprofit organization, housing cooperative, veterans organization, or Tribal business concern operates.
During the covered period, individuals who operate under a sole proprietorship or as an independent contractor and eligible self-employed individuals shall be eligible to receive a covered loan.
An eligible self-employed individual, independent contractor, or sole proprietorship seeking a covered loan shall submit such documentation as determined necessary by the Administrator and the Secretary, to establish the applicant as eligible.
During the covered period, any business concern that employs not more than 500 employees per physical location of the business concern and that is assigned a North American Industry Classification System code beginning with 72 at the time of disbursal shall be eligible to receive a covered loan.
In this subclause, the term “included business concern” means a business concern, including any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (47 U.S.C. 301 et seq.) without regard for whether such a station is a concern as defined in section 121.105 of title 13, Code of Federal Regulations, or any successor thereto—
that employs not more than 500 employees, or the size standard established by the Administrator for the North American Industry Classification System code applicable to the business concern, per physical location of such business concern; or
any nonprofit organization or any organization otherwise subject to section 511(a)(2)(B) of title 26 that is a public broadcasting entity (as defined in section 397(11) of the Communications Act of 1934 (47 U.S.C. 397(11))).
During the covered period, an included business concern shall be eligible to receive a covered loan if—
the included business concern is majority owned or controlled by a business concern that is assigned a North American Industry Classification System code beginning with 511110 or 5151 or, with respect to a public broadcasting entity (as defined in section 397(11) of the Communications Act of 1934 (47 U.S.C. 397(11))), has a trade or business that falls under such a code; and
the included business concern makes a good faith certification that proceeds of the loan will be used to support expenses at the component of the included business concern that produces or distributes locally focused or emergency information.
Subject to the provisions in this subparagraph, during the covered period—
a nonprofit organization shall be eligible to receive a covered loan if the nonprofit organization employs not more than 500 employees per physical location of the organization; and
an additional covered nonprofit entity and an organization that, but for subclauses (I)(dd) and (II)(dd) of clause (vii), would be eligible for a covered loan under clause (vii) shall be eligible to receive a covered loan if the entity or organization employs not more than 300 employees per physical location of the entity or organization.
A business concern or other organization that was not eligible to receive a covered loan the day before March 11, 2021, is assigned a North American Industry Classification System code of 519130, certifies in good faith as an Internet-only news publisher or Internet-only periodical publisher, and is engaged in the collection and distribution of local or regional and national news and information shall be eligible to receive a covered loan for the continued provision of news, information, content, or emergency information if—
the business concern or organization employs not more than 500 employees, or the size standard established by the Administrator for that North American Industry Classification code, per physical location of the business concern or organization; and
the business concern or organization makes a good faith certification that proceeds of the loan will be used to support expenses at the component of the business concern or organization that supports local or regional news.
During the covered period, the provisions applicable to affiliations under section 121.103 of title 13, Code of Federal Regulations, or any successor regulation, are waived with respect to eligibility for a covered loan for—
any business concern with not more than 500 employees that, as of the date on which the covered loan is disbursed, is assigned a North American Industry Classification System code beginning with 72;
any business concern operating as a franchise that is assigned a franchise identifier code by the Administration;
any business concern that receives financial assistance from a company licensed under section 681 of this title;
any business concern (including any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (47 U.S.C. 301 et seq.) without regard for whether such a station is a concern as defined in section 121.105 of title 13, Code of Federal Regulations, or any successor thereto) that employs not more than 500 employees, or the size standard established by the Administrator for the North American Industry Classification System code applicable to the business concern, per physical location of such business concern and is majority owned or controlled by a business concern that is assigned a North American Industry Classification System code beginning with 511110 or 5151; or
any nonprofit organization that is assigned a North American Industry Classification System code beginning with 5151; and
any business concern or other organization that was not eligible to receive a covered loan the day before March 11, 2021, is assigned a North American Industry Classification System code of 519130, certifies in good faith as an Internet-only news publisher or Internet-only periodical publisher, and is engaged in the collection and distribution of local or regional and national news and information, if the business concern or organization—
employs not more than 500 employees, or the size standard established by the Administrator for that North American Industry Classification code, per physical location of the business concern or organization; and
is majority owned or controlled by a business concern or organization that is assigned a North American Industry Classification System code of 519130.
For purposes of determining whether a business concern, nonprofit organization, veterans organization, or Tribal business concern described in section 657a(b)(2)(C) of this title employs not more than 500 employees under clause (i)(I), or for purposes of determining the number of employees of a housing cooperative or a business concern or organization made eligible for a loan under this paragraph under subclause (II), (III), or (IV) of clause (iii), subclause (IV) or (V) of clause (iv), clause (vii), or clause (ix), the term “employee” includes individuals employed on a full-time, part-time, or other basis.
The provisions applicable to affiliations under section 121.103 of title 13, Code of Federal Regulations, or any successor thereto, shall apply with respect to a nonprofit organization, a business concern or organization made eligible for a loan under this paragraph under clause (vii), a housing cooperative, and a veterans organization in the same manner as with respect to a small business concern.
Any organization that is described in section 501(c)(6) of title 26 and that is exempt from taxation under section 501(a) of such title (excluding professional sports leagues and organizations with the purpose of promoting or participating in a political campaign or other activity) shall be eligible to receive a covered loan if—
the organization does not receive more than 15 percent of its receipts from lobbying activities;
the lobbying activities of the organization do not comprise more than 15 percent of the total activities of the organization;
the cost of the lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year of the organization that ended prior to February 15, 2020; and
the organization employs not more than 300 employees.
Any destination marketing organization shall be eligible to receive a covered loan if—
the destination marketing organization does not receive more than 15 percent of its receipts from lobbying activities;
the lobbying activities of the destination marketing organization do not comprise more than 15 percent of the total activities of the organization;
the cost of the lobbying activities of the destination marketing organization did not exceed $1,000,000 during the most recent tax year of the destination marketing organization that ended prior to February 15, 2020; and 6
the destination marketing organization employs not more than 300 employees; and
the destination marketing organization—
is described in section 501(c) of title 26 and is exempt from taxation under section 501(a) of such title; or
is a quasi-governmental entity or is a political subdivision of a State or local government, including any instrumentality of those entities.
Subject to subclause (II), and notwithstanding any other provision of this paragraph, on and after December 27, 2020, an entity that is an issuer, the securities of which are listed on an exchange registered as a national securities exchange under section 78f of this title, shall be ineligible to receive a covered loan under this paragraph.
With respect to a business concern or organization made eligible by subclause (II) or (IV) of clause (iii) or subclause (IV) or (V) of clause (iv) of this subparagraph, the Administrator shall not consider whether any affiliated entity, which for purposes of this subclause shall include any entity that owns or controls such business concern or organization, is an issuer.
An additional covered nonprofit entity shall be eligible to receive a covered loan if—
the additional covered nonprofit entity does not receive more than 15 percent of its receipts from lobbying activities;
the lobbying activities of the additional covered nonprofit entity do not comprise more than 15 percent of the total activities of the organization;
the cost of the lobbying activities of the additional covered nonprofit entity did not exceed $1,000,000 during the most recent tax year of the additional covered nonprofit entity that ended prior to February 15, 2020; and
the additional covered nonprofit entity employs not more than 300 employees.
Except as provided in subparagraph (V), during the covered period, with respect to a covered loan, the maximum loan amount shall be the lesser of—
the sum of—
the product obtained by multiplying—
the average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the date on which the loan is made, except that an applicant that is a seasonal employer shall use the average total monthly payments for payroll for any 12-week period selected by the seasonal employer between February 15, 2019, and February 15, 2020; by
2.5; and
the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on the date on which covered loans are made available to be refinanced under the covered loan; or
if requested by an otherwise eligible recipient that was not in business during the period beginning on February 15, 2019 and ending on June 30, 2019, the sum of—
the product obtained by multiplying—
the average total monthly payments by the applicant for payroll costs incurred during the period beginning on January 1, 2020 and ending on February 29, 2020; by
2.5; and
the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on the date on which covered loans are made available to be refinanced under the covered loan; or
$10,000,000.
During the covered period, an eligible recipient may, in addition to the allowable uses of a loan made under this subsection, use the proceeds of the covered loan for—
payroll costs;
costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
employee salaries, commissions, or similar compensations;
payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
rent (including rent under a lease agreement);
utilities;
interest on any other debt obligations that were incurred before the covered period;
covered operations expenditures, as defined in section 636m(a) of this title;
covered property damage costs, as defined in section 636m(a) of this title;
covered supplier costs, as defined in section 636m(a) of this title; and
covered worker protection expenditures, as defined in section 636m(a) of this title.
For purposes of making covered loans for the purposes described in clause (i), a lender approved to make loans under this subsection shall be deemed to have been delegated authority by the Administrator to make and approve covered loans, subject to the provisions of this paragraph.
In evaluating the eligibility of a borrower for a covered loan with the terms described in this paragraph, a lender shall consider whether the borrower—
was in operation on February 15, 2020; and
had employees for whom the borrower paid salaries and payroll taxes; or
paid independent contractors, as reported on a Form 1099–MISC.
The authority to make loans under this paragraph shall be extended to additional lenders determined by the Administrator and the Secretary of the Treasury to have the necessary qualifications to process, close, disburse and service loans made with the guarantee of the Administration.
A loan made under subsection (b)(2) during the period beginning on January 31, 2020 and ending on the date on which covered loans are made available may be refinanced as part of a covered loan.
Notwithstanding the waiver of the personal guarantee requirement or collateral under subparagraph (J), the Administrator shall have no recourse against any individual shareholder, member, or partner of an eligible recipient of a covered loan for nonpayment of any covered loan, except to the extent that such shareholder, member, or partner uses the covered loan proceeds for a purpose not authorized under clause (i) or (iv).
None of the proceeds of a covered loan may be used for—
lobbying activities, as defined in section 1602 of title 2;
lobbying expenditures related to a State or local election; or
expenditures designed to influence the enactment of legislation, appropriations, regulation, administrative action, or Executive order proposed or pending before Congress or any State government, State legislature, or local legislature or legislative body.
An eligible recipient applying for a covered loan shall make a good faith certification—
that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient;
acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments;
that the eligible recipient does not have an application pending for a loan under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan; and
during the period beginning on February 15, 2020 and ending on December 31, 2020, that the eligible recipient has not received amounts under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan.
With respect to a covered loan—
in lieu of the fee otherwise applicable under paragraph (23)(A), the Administrator shall collect no fee; and
in lieu of the fee otherwise applicable under paragraph (18)(A), the Administrator shall collect no fee.
During the covered period, the requirement that a small business concern is unable to obtain credit elsewhere, as defined in section 632(h) of this title, shall not apply to a covered loan.
With respect to a covered loan—
no personal guarantee shall be required for the covered loan; and
no collateral shall be required for the covered loan.
With respect to a covered loan that has a remaining balance after reduction based on the loan forgiveness amount under section 636m of this title—
the remaining balance shall continue to be guaranteed by the Administration under this subsection; and
the covered loan shall have a minimum maturity of 5 years and a maximum maturity of 10 years from the date on which the borrower applies for loan forgiveness under that section.
A covered loan shall bear an interest rate not to exceed 4 percent, calculated on a non-compounding, non-adjustable basis.
In this subparagraph, the term “impacted borrower” means an eligible recipient that—
is in operation on February 15, 2020; and
has an application for a covered loan that is approved or pending approval on or after March 27, 2020.
For purposes of this subparagraph, an impacted borrower is presumed to have been adversely impacted by COVID–19.
The Administrator shall—
consider each eligible recipient that applies for a covered loan to be an impacted borrower; and
require lenders under this subsection to provide complete payment deferment relief for impacted borrowers with covered loans, including payment of principal, interest, and fees, until the date on which the amount of forgiveness determined under section 636m of this title is remitted to the lender.
With respect to a covered loan that is sold on the secondary market, if an investor declines to approve a deferral requested by a lender under clause (ii), the Administrator shall exercise the authority to purchase the loan so that the impacted borrower may receive a deferral, including payment of principal, interest, and fees, until the date on which the amount of forgiveness determined under section 636m of this title is remitted to the lender.
Not later than 30 days after March 27, 2020, the Administrator shall provide guidance to lenders under this paragraph on the deferment process described in this subparagraph.
If an eligible recipient fails to apply for forgiveness of a covered loan within 10 months after the last day of the covered period defined in section 636m(a) of this title, such eligible recipient shall make payments of principal, interest, and fees on such covered loan beginning on the day that is not earlier than the date that is 10 months after the last day of such covered period.
A covered loan shall be eligible to be sold in the secondary market consistent with this subsection. The Administrator may not collect any fee for any guarantee sold into the secondary market under this subparagraph.
With respect to the appropriate Federal banking agencies or the National Credit Union Administration Board applying capital requirements under their respective risk-based capital requirements, a covered loan shall receive a risk weight of zero percent.
Notwithstanding any other provision of law, an insured depository institution or an insured credit union that modifies a covered loan in relation to COVID–19-related difficulties in a troubled debt restructuring on or after March 13, 2020, shall not be required to comply with the Financial Accounting Standards Board Accounting Standards Codification Subtopic 310–40 (“Receivables – Troubled Debt Restructurings by Creditors”) for purposes of compliance with the requirements of the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.), until such time and under such circumstances as the appropriate Federal banking agency or the National Credit Union Administration Board, as applicable, determines appropriate.
The Administrator shall reimburse a lender authorized to make a covered loan as follows:
With respect to a covered loan made during the period beginning on March 27, 2020, and ending on the day before December 27, 2020, the Administrator shall reimburse such a lender at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
5 percent for loans of not more than $350,000;
3 percent for loans of more than $350,000 and less than $2,000,000; and
1 percent for loans of not less than $2,000,000.
With respect to a covered loan made on or after December 27, 2020, the Administrator shall reimburse such a lender—
for a covered loan of not more than $50,000, in an amount equal to the lesser of—
50 percent of the balance of the financing outstanding at the time of disbursement of the covered loan; or
$2,500; and
at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
5 percent for a covered loan of more than $50,000 and not more than $350,000;
3 percent for a covered loan of more than $350,000 and less than $2,000,000; and
1 percent for a covered loan of not less than $2,000,000.
An agent that assists an eligible recipient to prepare an application for a covered loan may not collect a fee in excess of the limits established by the Administrator. If an eligible recipient has knowingly retained an agent, such fees shall be paid by the eligible recipient and may not be paid out of the proceeds of a covered loan. A lender shall only be responsible for paying fees to an agent for services for which the lender directly contracts with the agent.
A reimbursement described in clause (i) shall be made not later than 5 days after the reported disbursement of the covered loan and may not be required to be repaid by a lender unless the lender is found guilty of an act of fraud in connection with the covered loan.
It is the sense of the Senate that the Administrator should issue guidance to lenders and agents to ensure that the processing and disbursement of covered loans prioritizes small business concerns and entities in underserved and rural markets, including veterans and members of the military community, small business concerns owned and controlled by socially and economically disadvantaged individuals (as defined in section 637(d)(3)(C) of this title), women, and businesses in operation for less than 2 years.
Nothing in this paragraph shall prohibit a recipient of an economic injury disaster loan made under subsection (b)(2) that is for a purpose other than paying payroll costs and other obligations described in subparagraph (F) from receiving assistance under this paragraph.
Notwithstanding any other provision of law, there shall be no prepayment penalty for any payment made on a covered loan.
In making loan guarantees under this paragraph after April 24, 2020, the Administrator shall guarantee not less than $30,000,000,000 in loans made by—
insured depository institutions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000; and
credit unions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000.
In making loan guarantees under this paragraph after April 24, 2020, the Administrator shall guarantee not less than $30,000,000,000 in loans made by—
community financial institutions;
insured depository institutions with consolidated assets of less than $10,000,000,000; and
credit unions with consolidated assets of less than $10,000,000,000.
A business or organization that was not in operation on February 15, 2020 shall not be eligible for a loan under this paragraph.
An eligible person or entity (as defined under of 4section 9009a of this title) that receives a grant under such section 9009a shall not be eligible for a loan under this paragraph.
In this subparagraph, the term “covered recipient” means an eligible recipient that—
operates as a sole proprietorship or as an independent contractor, or is an eligible self-employed individual;
reports farm income or expenses on a Schedule F (or any equivalent successor schedule); and
was in business as of February 15, 2020.
With respect to 8 covered recipient without employees, the maximum covered loan amount shall be the lesser of—
the sum of—
the product obtained by multiplying—
the gross income of the covered recipient in 2019, as reported on a Schedule F (or any equivalent successor schedule), that is not more than $100,000, divided by 12; and
2.5; and
the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on April 3, 2020 that the borrower intends to refinance under the covered loan, not including any amount of any advance under the loan that is not required to be repaid; or
$2,000,000.
With respect to a covered recipient with employees, the maximum covered loan amount shall be calculated using the formula described in subparagraph (E), except that the gross income of the covered recipient described in clause (ii)(I)(aa)(AA) of this subparagraph, as divided by 12, shall be added to the sum calculated under subparagraph (E)(i)(I).
A lender that made a covered loan to a covered recipient before December 27, 2020 may, at the request of the covered recipient—
recalculate the maximum loan amount applicable to that covered loan based on the formula described in clause (ii) or (iii), as applicable, if doing so would result in a larger covered loan amount; and
provide the covered recipient with additional covered loan amounts based on that recalculation.
Notwithstanding any other provision of law, any criminal charge or civil enforcement action alleging that a borrower engaged in fraud with respect to a covered loan guaranteed under this paragraph shall be filed not later than 10 years after the offense was committed.
In this paragraph—
the terms “additional covered nonprofit entity”, “eligible self-employed individual”, “housing cooperative”, “nonprofit organization”, “payroll costs”, “seasonal employer”, and “veterans organization” have the meanings given those terms in paragraph (36), except that “eligible entity” shall be substituted for “eligible recipient” each place it appears in the definitions of those terms;
the term “covered loan” means a loan made under this paragraph;
the terms “covered mortgage obligation”, “covered operating expenditure”, “covered property damage cost”, “covered rent obligation”, “covered supplier cost”, “covered utility payment”, and “covered worker protection expenditure” have the meanings given those terms in section 636m(a) of this title;
the term “eligible entity”—
means any business concern, nonprofit organization, housing cooperative, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative that—
employs not more than 300 employees; and
except as provided in subitems (BB), (CC), and (DD), had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter in 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the same quarter in 2019;
if the entity was not in business during the first or second quarter of 2019, but was in business during the third and fourth quarter of 2019, had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the third or fourth quarter of 2019;
if the entity was not in business during the first, second, or third quarter of 2019, but was in business during the fourth quarter of 2019, had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the fourth quarter of 2019; or
if the entity was not in business during 2019, but was in operation on February 15, 2020, had gross receipts during the second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the first quarter of 2020;
includes a business concern or organization made eligible for a loan under paragraph (36) under subclause (II), (III), or (IV) of clause (iii), subclause (IV) or (V) of clause (iv), clause (vii), or clause (ix) of subparagraph (D) of paragraph (36) and that meets the requirements described in items (aa) and (bb) of subclause (I); and
does not include—
any entity that is a type of business concern (or would be, if such entity were a business concern) described in section 120.110 of title 13, Code of Federal Regulations (or in any successor regulation or other related guidance or rule that may be issued by the Administrator) other than a business concern described in subsection (a) or (k) of such section; or
any business concern or entity primarily engaged in political or lobbying activities, which shall include any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents;
any business concern or entity—
for which an entity created in or organized under the laws of the People’s Republic of China or the Special Administrative Region of Hong Kong, or that has significant operations in the People’s Republic of China or the Special Administrative Region of Hong Kong, owns or holds, directly or indirectly, not less than 20 percent of the economic interest of the business concern or entity, including as equity shares or a capital or profit interest in a limited liability company or partnership; or
that retains, as a member of the board of directors of the business concern, a person who is a resident of the People’s Republic of China;
any person required to submit a registration statement under section 612 of title 22; or
an eligible person or entity (as defined under section 9009a of this title) that receives a grant under such section 9009a; and
the term “Tribal business concern” means a Tribal business concern described in section 657a(b)(2)(C) of this title.
Except as otherwise provided in this paragraph, the Administrator may guarantee covered loans to eligible entities under the same terms, conditions, and processes as a loan made under paragraph (36).
Except as otherwise provided in this subparagraph, the maximum amount of a covered loan made to an eligible entity is the lesser of—
the product obtained by multiplying—
at the election of the eligible entity, the average total monthly payment for payroll costs incurred or paid by the eligible entity during—
the 1-year period before the date on which the loan is made; or
calendar year 2019; by
2.5; or
$2,000,000.
The maximum amount of a covered loan made to an eligible entity that is a seasonal employer is the lesser of—
the product obtained by multiplying—
at the election of the eligible entity, the average total monthly payments for payroll costs incurred or paid by the eligible entity for any 12-week period between February 15, 2019 and February 15, 2020; by
2.5; or
$2,000,000.
The maximum amount of a covered loan made to an eligible entity that did not exist during the 1-year period preceding February 15, 2020 is the lesser of—
the product obtained by multiplying—
the quotient obtained by dividing—
the sum of the total monthly payments by the eligible entity for payroll costs paid or incurred by the eligible entity as of the date on which the eligible entity applies for the covered loan; by
the number of months in which those payroll costs were paid or incurred; by
2.5; or
$2,000,000.
The maximum amount of a covered loan made to an eligible entity that is assigned a North American Industry Classification System code beginning with 72 at the time of disbursal is the lesser of—
the product obtained by multiplying—
at the election of the eligible entity, the average total monthly payment for payroll costs incurred or paid by the eligible entity during—
the 1-year period before the date on which the loan is made; or
calendar year 2019; by
3.5; or
$2,000,000.
For a business concern with more than 1 physical location, the business concern shall be an eligible entity if the business concern would be eligible for a loan under paragraph (36) pursuant to clause (iii) of subparagraph (D) of such paragraph, as applied in accordance with clause (ii) of this subparagraph, and meets the revenue reduction requirements described in item (bb) of subparagraph (A)(iv)(I).
For purposes of applying clause (i), the Administrator shall substitute “not more than 300 employees” for “not more than 500 employees” in paragraph (36)(D)(iii).
The waiver described in paragraph (36)(D)(iv) shall apply for purposes of determining eligibility under this paragraph.
For purposes of applying clause (i), the Administrator shall substitute “not more than 300 employees” for “not more than 500 employees” in subclause (I) and (IV) of paragraph (36)(D)(iv).
An eligible entity may only receive 1 covered loan.
An eligible entity applying for a covered loan shall not be required to make the certification described in clause (iii) or (iv) of paragraph (36)(G).
With respect to a covered loan—
in lieu of the fee otherwise applicable under paragraph (23)(A), the Administrator shall collect no fee; and
in lieu of the fee otherwise applicable under paragraph (18)(A), the Administrator shall collect no fee.
For a covered loan of not more than $150,000, the eligible entity—
may submit a certification attesting that the eligible entity meets the applicable revenue loss requirement under subparagraph (A)(iv)(I)(bb); and
if the eligible entity submits a certification under subclause (I), shall, on or before the date on which the eligible entity submits an application for forgiveness under subparagraph (J), produce adequate documentation that the eligible entity met such revenue loss standard.
For purposes of calculating gross receipts under subparagraph (A)(iv)(I)(bb) for an eligible entity that is a nonprofit organization, a veterans organization, or an organization described in subparagraph (A)(iv)(II), gross receipts means gross receipts within the meaning of section 6033 of title 26.
In this subparagraph, the term “covered period” has the meaning given that term in section 636m(a) of this title.
Except as otherwise provided in this subparagraph, an eligible entity shall be eligible for forgiveness of indebtedness on a covered loan in the same manner as an eligible recipient with respect to a loan made under paragraph (36) of this section, as described in section 636m of this title.
An eligible entity shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred or expenditures made during the covered period:
Payroll costs, excluding any payroll costs that are—
qualified wages, as defined in subsection (c)(3) of section 2301 of the CARES Act (26 U.S.C. 3111 note), taken into account in determining the credit allowed under such section;
qualified wages taken into account in determining the credit allowed under subsection (a) or (d) of section 303 of the Taxpayer Certainty and Disaster Relief Act of 2020; or
premiums taken into account in determining the credit allowed under section 6432 of title 26.
Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
Any covered operations expenditure.
Any covered property damage cost.
Any payment on any covered rent obligation.
Any covered utility payment.
Any covered supplier cost.
Any covered worker protection expenditure.
Subject to any reductions under section 636m(d) of this title, the forgiveness amount under this subparagraph shall be equal to the lesser of—
the amount described in clause (ii); and
the amount equal to the quotient obtained by dividing—
the amount of the covered loan used for payroll costs during the covered period; and
0.60.
For purposes of applying subsection (l)(1) of section 636m of this title to a covered loan of not more than $150,000 under this paragraph, an eligible entity may be required to provide, at the time of the application for forgiveness, documentation required to substantiate revenue loss in accordance with subparagraph (I).
Except as otherwise provided in this paragraph, a lender approved to make loans under paragraph (36) may make covered loans under the same terms and conditions as in paragraph (36).
The Administrator shall reimburse a lender authorized to make a covered loan—
for a covered loan of not more than $50,000, in an amount equal to the lesser of—
50 percent of the balance of the financing outstanding at the time of disbursement of the covered loan; or
$2,500;
at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
5 percent for a covered loan of more than $50,000 and not more than $350,000; and
3 percent for a covered loan of more than $350,000.
Not later than 10 days after December 27, 2020, the Administrator shall issue guidance addressing barriers to accessing capital for minority, underserved, veteran, and women-owned business concerns for the purpose of ensuring equitable access to covered loans.
The Administrator shall, to the maximum extent practicable, allow a lender approved to make covered loans to use existing program guidance and standard operating procedures for loans made under this subsection.
A covered loan under this paragraph may only be made to an eligible entity that—
has received a loan under paragraph (36); and
on or before the expected date on which the covered loan under this paragraph is disbursed to the eligible entity, has used, or will use, the full amount of the loan received under paragraph (36).
Notwithstanding any other provision of law, any criminal charge or civil enforcement action alleging that a borrower engaged in fraud with respect to a covered loan guaranteed under this paragraph shall be filed not later than 10 years after the offense was committed.
In this subsection—
the term “disaster area” means any area for which the President declared a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9), during the period of that major disaster declaration;
the term “eligible individual” means an individual who is eligible for disaster assistance under subsection (b)(1) relating to a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9);
the term “eligible small business concern” means a business concern that is—
a small business concern, as defined under this chapter; or
a small business concern, as defined in section 103 of the Small Business Investment Act of 1958 [15 U.S.C. 662];
the term “preferred lender” means a lender participating in the Preferred Lender Program;
the term “Preferred Lender Program” has the meaning given that term in subsection (a)(2)(C)(ii); and
the term “qualified private lender” means any privately-owned bank or other lending institution that—
is not a preferred lender; and
the Administrator determines meets the criteria established under paragraph (10).
The Administrator shall carry out a program, to be known as the Private Disaster Assistance program, under which the Administration may guarantee timely payment of principal and interest, as scheduled, on any loan made to an eligible small business concern located in a disaster area and to an eligible individual.
A loan guaranteed by the Administrator under this subsection may be used for any purpose authorized under subsection (b).
The Administrator may establish, directly or through an agreement with another entity, an online application process for loans guaranteed under this subsection.
The Administrator may coordinate with the head of any other appropriate Federal agency so that any application submitted through an online application process established under this paragraph may be considered for any other Federal assistance program for disaster relief.
In establishing an online application process under this paragraph, the Administrator shall consult with appropriate persons from the public and private sectors, including private lenders.
The Administrator may guarantee not more than 85 percent of a loan under this subsection.
The maximum amount of a loan guaranteed under this subsection shall be $2,000,000.
A loan guaranteed under this subsection shall be made under the same terms and conditions as a loan under subsection (b).
A loan guaranteed under this subsection made to—
a qualified individual may be made by a preferred lender; and
a qualified small business concern may be made by a qualified private lender or by a preferred lender that also makes loans to qualified individuals.
If the Administrator determines that a preferred lender knowingly failed to comply with the underwriting standards for loans guaranteed under this subsection or violated the terms of the standard operating procedure agreement between that preferred lender and the Administration, the Administrator shall do 1 or more of the following:
Exclude the preferred lender from participating in the program under this subsection.
Exclude the preferred lender from participating in the Preferred Lender Program for a period of not more than 5 years.
The Administrator may not collect a guarantee fee under this subsection.
The Administrator may pay a qualified private lender or preferred lender an origination fee for a loan guaranteed under this subsection in an amount agreed upon in advance between the qualified private lender or preferred lender and the Administrator.
A qualified private lender or preferred lender may use its own loan documentation for a loan guaranteed by the Administrator under this subsection, to the extent authorized by the Administrator. The ability of a lender to use its own loan documentation for a loan guaranteed under this subsection shall not be considered part of the criteria for becoming a qualified private lender under the regulations promulgated under paragraph (10).
Not later than 1 year after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, the Administrator shall issue final regulations establishing permanent criteria for qualified private lenders.
Not later than 6 months after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, the Administrator shall submit a report on the progress of the regulations required by subparagraph (A) to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives.
Amounts necessary to carry out this subsection shall be made available from amounts appropriated to the Administration to carry out subsection (b).
Funds appropriated to the Administration to carry out this subsection,9 may be used by the Administrator to meet the loan terms and conditions specified in paragraph (6).
The Administrator may enter into an agreement with a qualified private lender or preferred lender to purchase any loan guaranteed under this subsection.
In this subsection—
the term “disaster area” means any area for which the President declared a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9), during the period of that major disaster declaration;
the term “eligible individual” means an individual who is eligible for disaster assistance under subsection (b)(1) relating to a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9);
the term “eligible small business concern” means a business concern that is—
a small business concern, as defined under this chapter; or
a small business concern, as defined in section 103 of the Small Business Investment Act of 1958 [15 U.S.C. 662];
the term “preferred lender” means a lender participating in the Preferred Lender Program;
the term “Preferred Lender Program” has the meaning given that term in subsection (a)(2)(C)(ii); and
the term “qualified private lender” means any privately-owned bank or other lending institution that—
is not a preferred lender; and
the Administrator determines meets the criteria established under paragraph (10).
The Administrator shall carry out a program, to be known as the Private Disaster Assistance program, under which the Administration may guarantee timely payment of principal and interest, as scheduled, on any loan made to an eligible small business concern located in a disaster area and to an eligible individual.
A loan guaranteed by the Administrator under this subsection may be used for any purpose authorized under subsection (b).
The Administrator may establish, directly or through an agreement with another entity, an online application process for loans guaranteed under this subsection.
The Administrator may coordinate with the head of any other appropriate Federal agency so that any application submitted through an online application process established under this paragraph may be considered for any other Federal assistance program for disaster relief.
In establishing an online application process under this paragraph, the Administrator shall consult with appropriate persons from the public and private sectors, including private lenders.
The Administrator may guarantee not more than 85 percent of a loan under this subsection.
The maximum amount of a loan guaranteed under this subsection shall be $2,000,000.
A loan guaranteed under this subsection shall be made under the same terms and conditions as a loan under subsection (b).
A loan guaranteed under this subsection made to—
a qualified individual may be made by a preferred lender; and
a qualified small business concern may be made by a qualified private lender or by a preferred lender that also makes loans to qualified individuals.
If the Administrator determines that a preferred lender knowingly failed to comply with the underwriting standards for loans guaranteed under this subsection or violated the terms of the standard operating procedure agreement between that preferred lender and the Administration, the Administrator shall do 1 or more of the following:
Exclude the preferred lender from participating in the program under this subsection.
Exclude the preferred lender from participating in the Preferred Lender Program for a period of not more than 5 years.
The Administrator may not collect a guarantee fee under this subsection.
The Administrator may pay a qualified private lender or preferred lender an origination fee for a loan guaranteed under this subsection in an amount agreed upon in advance between the qualified private lender or preferred lender and the Administrator.
A qualified private lender or preferred lender may use its own loan documentation for a loan guaranteed by the Administrator under this subsection, to the extent authorized by the Administrator. The ability of a lender to use its own loan documentation for a loan guaranteed under this subsection shall not be considered part of the criteria for becoming a qualified private lender under the regulations promulgated under paragraph (10).
Not later than 1 year after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, the Administrator shall issue final regulations establishing permanent criteria for qualified private lenders.
Not later than 6 months after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, the Administrator shall submit a report on the progress of the regulations required by subparagraph (A) to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives.
Amounts necessary to carry out this subsection shall be made available from amounts appropriated to the Administration to carry out subsection (b).
Funds appropriated to the Administration to carry out this subsection,9 may be used by the Administrator to meet the loan terms and conditions specified in paragraph (6).
The Administrator may enter into an agreement with a qualified private lender or preferred lender to purchase any loan guaranteed under this subsection.
The Administration shall not fund any Small Business Development Center or any variation thereof, except as authorized in section 648 of this title.
The Administration shall not fund any Small Business Development Center or any variation thereof, except as authorized in section 648 of this title.
In making loans under subsection (b), the Administrator shall not require the borrower to pay any non-amortized amount for the first five years after repayment begins.
In making loans under subsection (b), the Administrator shall not require the borrower to pay any non-amortized amount for the first five years after repayment begins.
The Administration also is empowered, where other financial assistance is not available on reasonable terms, to make such loans (either directly or in cooperation with Banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate—
to assist any public or private organization—
which is organized under the laws of the United States or of any State, operated in the interest of handicapped individuals, the net income of which does not inure in whole or in part to the benefit of any shareholder or other individual;
which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and
which, in the production of commodities and in the provision of services during any fiscal year in which it receives financial assistance under this subsection, employs handicapped individuals for not less than 75 per centum of the man-hours required for the production or provision of the commodities or services; or
to assist any handicapped individual in establishing, acquiring, or operating a small business concern.
The Administration’s share of any loan made under this subsection shall not exceed $350,000, nor may any such loan be made if the total amount outstanding and committed (by participation or otherwise) to the borrower from the business loan and investment fund established by section 633(c)(1)(B) of this title would exceed $350,000. In agreements to participate in loans on a deferred basis under this subsection, the Administration’s participation may total 100 per centum of the balance of the loan at the time of disbursement. The Administration’s share of any loan made under this subsection shall bear interest at the rate of 3 per centum per annum. The maximum term of any such loan, including extensions and renewals thereof, may not exceed fifteen years. All loans made under this subsection shall be of such sound value or so secured as reasonably to assure repayment: Provided, however, That any reasonable doubt shall be resolved in favor of the applicant.
For purposes of this subsection, the term “handicapped individual” means a person who has a physical, mental, or emotional impairment, defect, ailment, disease, or disability of a permanent nature which in any way limits the selection of any type of employment for which the person would otherwise be qualified or qualifiable.
The Administration also is empowered, where other financial assistance is not available on reasonable terms, to make such loans (either directly or in cooperation with Banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate—
to assist any public or private organization—
which is organized under the laws of the United States or of any State, operated in the interest of handicapped individuals, the net income of which does not inure in whole or in part to the benefit of any shareholder or other individual;
which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and
which, in the production of commodities and in the provision of services during any fiscal year in which it receives financial assistance under this subsection, employs handicapped individuals for not less than 75 per centum of the man-hours required for the production or provision of the commodities or services; or
to assist any handicapped individual in establishing, acquiring, or operating a small business concern.
The Administration’s share of any loan made under this subsection shall not exceed $350,000, nor may any such loan be made if the total amount outstanding and committed (by participation or otherwise) to the borrower from the business loan and investment fund established by section 633(c)(1)(B) of this title would exceed $350,000. In agreements to participate in loans on a deferred basis under this subsection, the Administration’s participation may total 100 per centum of the balance of the loan at the time of disbursement. The Administration’s share of any loan made under this subsection shall bear interest at the rate of 3 per centum per annum. The maximum term of any such loan, including extensions and renewals thereof, may not exceed fifteen years. All loans made under this subsection shall be of such sound value or so secured as reasonably to assure repayment: Provided, however, That any reasonable doubt shall be resolved in favor of the applicant.
For purposes of this subsection, the term “handicapped individual” means a person who has a physical, mental, or emotional impairment, defect, ailment, disease, or disability of a permanent nature which in any way limits the selection of any type of employment for which the person would otherwise be qualified or qualifiable.
The Administration also is empowered to make, participate (on an immediate basis) in, or guarantee loans, repayable in not more than fifteen years, to any small business concern, or to any qualified person seeking to establish such a concern, when it determines that such loans will further the policies established in section 631(b) 2 of this title, with particular emphasis on the preservation or establishment of small business concerns located in urban or rural areas with high proportions of unemployed or low-income individuals, or owned by low-income individuals: Provided, however, That no such loans shall be made, participated in, or guaranteed if the total of such Federal assistance to a single borrower outstanding at any one time would exceed $100,000. The Administration may defer payments on the principal of such loans for a grace period and use such other methods as it deems necessary and appropriate to assure the successful establishment and operation of such concern. The Administration may, in its discretion, as a condition of such financial assistance, require that the borrower take steps to improve his management skills by participating in a management training program approved by the Administration: Provided, however, That any management training program so approved must be of sufficient scope and duration to provide reasonable opportunity for the individuals served to develop entrepreneurial and managerial self-sufficiency.
The Administration shall encourage, as far as possible, the participation of the private business community in the program of assistance to such concerns, and shall seek to stimulate new private lending activities to such concerns through the use of the loan guarantees, participations in loans, and pooling arrangements authorized by this subsection.
To insure an equitable distribution between urban and rural areas for loans between $3,500 and $100,000 made under this subsection, the Administration is authorized to use the agencies and agreements and delegations developed under title III of the Economic Opportunity Act of 1964, as amended [42 U.S.C. 2841 et seq.], as it shall determine necessary.
The Administration shall provide for the continuing evaluation of programs under this subsection, including full information on the location, income characteristics, and types of businesses and individuals assisted, and on new private lending activity stimulated, and the results of such evaluation together with recommendations shall be included in the report required by section 639(a) of this title.
Loans made pursuant to this subsection (including immediate participation in and guarantees of such loans) shall have such terms and conditions as the Administration shall determine, subject to the following limitations—
there is reasonable assurance of repayment of the loan;
the financial assistance is not otherwise available on reasonable terms from private sources or other Federal, State, or local programs;
the amount of the loan, together with other funds available, is adequate to assure completion of the project or achievement of the purposes for which the loan is made;
the loan bears interest at a rate not less than (i) a rate determined by the Secretary of the Treasury, taking into consideration the average market yield on outstanding Treasury obligations of comparable maturity, plus (ii) such additional charge, if any, toward covering other costs of the program as the Administration may determine to be consistent with its purposes: Provided, however, That the rate of interest charged on loans made in redevelopment areas designated under the Public Works and Economic Development Act of 1965 [42 U.S.C. 3121 et seq.] shall not exceed the rate currently applicable to new loans made under section 201 of that Act [42 U.S.C. 3141]; and
fees not in excess of amounts necessary to cover administrative expenses and probable losses may be required on loan guarantees.
The Administration shall take such steps as may be necessary to insure that, in any fiscal year, at least 50 per centum of the amounts loaned or guaranteed pursuant to this subsection are allotted to small business concerns located in urban areas identified by the Administration as having high concentrations of unemployed or low-income individuals or to small business concerns owned by low-income individuals. The Administration shall define the meaning of low income as it applies to owners of small business concerns eligible to be assisted under this subsection.
No financial assistance shall be extended pursuant to this subsection where the Administration determines that the assistance will be used in relocating establishments from one area to another if such relocation would result in an increase in unemployment in the area of original location.
The Administration also is empowered to make, participate (on an immediate basis) in, or guarantee loans, repayable in not more than fifteen years, to any small business concern, or to any qualified person seeking to establish such a concern, when it determines that such loans will further the policies established in section 631(b) 2 of this title, with particular emphasis on the preservation or establishment of small business concerns located in urban or rural areas with high proportions of unemployed or low-income individuals, or owned by low-income individuals: Provided, however, That no such loans shall be made, participated in, or guaranteed if the total of such Federal assistance to a single borrower outstanding at any one time would exceed $100,000. The Administration may defer payments on the principal of such loans for a grace period and use such other methods as it deems necessary and appropriate to assure the successful establishment and operation of such concern. The Administration may, in its discretion, as a condition of such financial assistance, require that the borrower take steps to improve his management skills by participating in a management training program approved by the Administration: Provided, however, That any management training program so approved must be of sufficient scope and duration to provide reasonable opportunity for the individuals served to develop entrepreneurial and managerial self-sufficiency.
The Administration shall encourage, as far as possible, the participation of the private business community in the program of assistance to such concerns, and shall seek to stimulate new private lending activities to such concerns through the use of the loan guarantees, participations in loans, and pooling arrangements authorized by this subsection.
To insure an equitable distribution between urban and rural areas for loans between $3,500 and $100,000 made under this subsection, the Administration is authorized to use the agencies and agreements and delegations developed under title III of the Economic Opportunity Act of 1964, as amended [42 U.S.C. 2841 et seq.], as it shall determine necessary.
The Administration shall provide for the continuing evaluation of programs under this subsection, including full information on the location, income characteristics, and types of businesses and individuals assisted, and on new private lending activity stimulated, and the results of such evaluation together with recommendations shall be included in the report required by section 639(a) of this title.
Loans made pursuant to this subsection (including immediate participation in and guarantees of such loans) shall have such terms and conditions as the Administration shall determine, subject to the following limitations—
there is reasonable assurance of repayment of the loan;
the financial assistance is not otherwise available on reasonable terms from private sources or other Federal, State, or local programs;
the amount of the loan, together with other funds available, is adequate to assure completion of the project or achievement of the purposes for which the loan is made;
the loan bears interest at a rate not less than (i) a rate determined by the Secretary of the Treasury, taking into consideration the average market yield on outstanding Treasury obligations of comparable maturity, plus (ii) such additional charge, if any, toward covering other costs of the program as the Administration may determine to be consistent with its purposes: Provided, however, That the rate of interest charged on loans made in redevelopment areas designated under the Public Works and Economic Development Act of 1965 [42 U.S.C. 3121 et seq.] shall not exceed the rate currently applicable to new loans made under section 201 of that Act [42 U.S.C. 3141]; and
fees not in excess of amounts necessary to cover administrative expenses and probable losses may be required on loan guarantees.
The Administration shall take such steps as may be necessary to insure that, in any fiscal year, at least 50 per centum of the amounts loaned or guaranteed pursuant to this subsection are allotted to small business concerns located in urban areas identified by the Administration as having high concentrations of unemployed or low-income individuals or to small business concerns owned by low-income individuals. The Administration shall define the meaning of low income as it applies to owners of small business concerns eligible to be assisted under this subsection.
No financial assistance shall be extended pursuant to this subsection where the Administration determines that the assistance will be used in relocating establishments from one area to another if such relocation would result in an increase in unemployment in the area of original location.
In carrying out its functions under subsections (i) and (j) and section 637(a) of this title, the Administration is authorized—
to utilize, with their consent, the services and facilities of Federal agencies without reimbursement, and, with the consent of any State or political subdivision of a State, accept and utilize the services and facilities of such State or subdivision without reimbursement;
to accept, in the name of the Administration, and employ or dispose of in furtherance of the purposes of this chapter, any money or property, real, personal, or mixed, tangible, or intangible, received by gift, devise, bequest, or otherwise;
to accept voluntary and uncompensated services, notwithstanding the provisions of section 1342 of title 31; and
to employ experts and consultants or organizations thereof as authorized by section 3109 of title 5, except that no individual may be employed under the authority of this subsection for more than one hundred days in any fiscal year; to compensate individuals so employed at rates not in excess of the daily equivalent of the highest rate payable under section 5332 of title 5, including traveltime; and to allow them, while away from their homes or regular places of business, travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of title 5 for persons in the Government service employed intermittently, while so employed: Provided, however, That contracts for such employment may be renewed annually.
In carrying out its functions under subsections (i) and (j) and section 637(a) of this title, the Administration is authorized—
to utilize, with their consent, the services and facilities of Federal agencies without reimbursement, and, with the consent of any State or political subdivision of a State, accept and utilize the services and facilities of such State or subdivision without reimbursement;
to accept, in the name of the Administration, and employ or dispose of in furtherance of the purposes of this chapter, any money or property, real, personal, or mixed, tangible, or intangible, received by gift, devise, bequest, or otherwise;
to accept voluntary and uncompensated services, notwithstanding the provisions of section 1342 of title 31; and
to employ experts and consultants or organizations thereof as authorized by section 3109 of title 5, except that no individual may be employed under the authority of this subsection for more than one hundred days in any fiscal year; to compensate individuals so employed at rates not in excess of the daily equivalent of the highest rate payable under section 5332 of title 5, including traveltime; and to allow them, while away from their homes or regular places of business, travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of title 5 for persons in the Government service employed intermittently, while so employed: Provided, however, That contracts for such employment may be renewed annually.
In this subsection—
the term “eligible intermediary”—
means a private, nonprofit entity that—
seeks or has been awarded a loan from the Administrator to make loans to small business concerns under this subsection; and
has not less than 1 year of experience making loans to startup, newly established, or growing small business concerns; and
includes—
a private, nonprofit community development corporation;
a consortium of private, nonprofit organizations or nonprofit community development corporations; and
an agency of or nonprofit entity established by a Native American Tribal Government; and
the term “Program” means the small business intermediary lending pilot program established under paragraph (2).
There is established a 3-year small business intermediary lending pilot program, under which the Administrator may make direct loans to eligible intermediaries, for the purpose of making loans to startup, newly established, and growing small business concerns.
The purposes of the Program are—
to assist small business concerns in areas suffering from a lack of credit due to poor economic conditions or changes in the financial market; and
to establish a loan program under which the Administrator may provide loans to eligible intermediaries to enable the eligible intermediaries to provide loans to startup, newly established, and growing small business concerns for working capital, real estate, or the acquisition of materials, supplies, or equipment.
Each eligible intermediary desiring a loan under this subsection shall submit an application to the Administrator that describes—
the type of small business concerns to be assisted;
the size and range of loans to be made;
the interest rate and terms of loans to be made;
the geographic area to be served and the economic, poverty, and unemployment characteristics of the area;
the status of small business concerns in the area to be served and an analysis of the availability of credit; and
the qualifications of the applicant to carry out this subsection.
No loan may be made to an eligible intermediary under this subsection if the total amount outstanding and committed to the eligible intermediary by the Administrator would, as a result of such loan, exceed $1,000,000 during the participation of the eligible intermediary in the Program.
Loans made by the Administrator under this subsection shall be for a term of 20 years.
Loans made by the Administrator to an eligible intermediary under the Program shall bear an annual interest rate equal to 1.00 percent.
The Administrator may not charge any fees or require collateral with respect to any loan made to an eligible intermediary under this subsection.
The Administrator shall not require the repayment of principal or interest on a loan made to an eligible intermediary under the Program during the 2-year period beginning on the date of the initial disbursement of funds under that loan.
During each of fiscal years 2011, 2012, and 2013, the Administrator may make loans under the Program—
to not more than 20 eligible intermediaries; and
in a total amount of not more than $20,000,000.
The Administrator, through an eligible intermediary, shall make loans to startup, newly established, and growing small business concerns for working capital, real estate, and the acquisition of materials, supplies, furniture, fixtures, and equipment.
An eligible intermediary may not make a loan under this subsection of more than $200,000 to any 1 small business concern.
A loan made by an eligible intermediary to a small business concern under this subsection, may have a fixed or a variable interest rate, and shall bear an interest rate specified by the eligible intermediary in the application of the eligible intermediary for a loan under this subsection.
The Administrator may not review individual loans made by an eligible intermediary to a small business concern before approval of the loan by the eligible intermediary.
The authority of the Administrator to make loans under the Program shall terminate 3 years after September 27, 2010.
In this subsection—
the term “eligible intermediary”—
means a private, nonprofit entity that—
seeks or has been awarded a loan from the Administrator to make loans to small business concerns under this subsection; and
has not less than 1 year of experience making loans to startup, newly established, or growing small business concerns; and
includes—
a private, nonprofit community development corporation;
a consortium of private, nonprofit organizations or nonprofit community development corporations; and
an agency of or nonprofit entity established by a Native American Tribal Government; and
the term “Program” means the small business intermediary lending pilot program established under paragraph (2).
There is established a 3-year small business intermediary lending pilot program, under which the Administrator may make direct loans to eligible intermediaries, for the purpose of making loans to startup, newly established, and growing small business concerns.
The purposes of the Program are—
to assist small business concerns in areas suffering from a lack of credit due to poor economic conditions or changes in the financial market; and
to establish a loan program under which the Administrator may provide loans to eligible intermediaries to enable the eligible intermediaries to provide loans to startup, newly established, and growing small business concerns for working capital, real estate, or the acquisition of materials, supplies, or equipment.
Each eligible intermediary desiring a loan under this subsection shall submit an application to the Administrator that describes—
the type of small business concerns to be assisted;
the size and range of loans to be made;
the interest rate and terms of loans to be made;
the geographic area to be served and the economic, poverty, and unemployment characteristics of the area;
the status of small business concerns in the area to be served and an analysis of the availability of credit; and
the qualifications of the applicant to carry out this subsection.
No loan may be made to an eligible intermediary under this subsection if the total amount outstanding and committed to the eligible intermediary by the Administrator would, as a result of such loan, exceed $1,000,000 during the participation of the eligible intermediary in the Program.
Loans made by the Administrator under this subsection shall be for a term of 20 years.
Loans made by the Administrator to an eligible intermediary under the Program shall bear an annual interest rate equal to 1.00 percent.
The Administrator may not charge any fees or require collateral with respect to any loan made to an eligible intermediary under this subsection.
The Administrator shall not require the repayment of principal or interest on a loan made to an eligible intermediary under the Program during the 2-year period beginning on the date of the initial disbursement of funds under that loan.
During each of fiscal years 2011, 2012, and 2013, the Administrator may make loans under the Program—
to not more than 20 eligible intermediaries; and
in a total amount of not more than $20,000,000.
The Administrator, through an eligible intermediary, shall make loans to startup, newly established, and growing small business concerns for working capital, real estate, and the acquisition of materials, supplies, furniture, fixtures, and equipment.
An eligible intermediary may not make a loan under this subsection of more than $200,000 to any 1 small business concern.
A loan made by an eligible intermediary to a small business concern under this subsection, may have a fixed or a variable interest rate, and shall bear an interest rate specified by the eligible intermediary in the application of the eligible intermediary for a loan under this subsection.
The Administrator may not review individual loans made by an eligible intermediary to a small business concern before approval of the loan by the eligible intermediary.
The authority of the Administrator to make loans under the Program shall terminate 3 years after September 27, 2010.
In this subsection:
The term “active service” has the meaning given that term in section 101(d)(3) of title 10.
The term “eligible reservist” means a member of a reserve component of the Armed Forces ordered to perform active service for a period of more than 30 consecutive days.
The term “essential employee” means an individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful day-to-day operations of that small business concern.
The term “qualified borrower” means—
an individual who is an eligible reservist and who received a direct loan under subsection (a) or (b) before being ordered to active service; or
a small business concern that received a direct loan under subsection (a) or (b) before an eligible reservist, who is an essential employee, was ordered to active service.
The Administration shall, upon written request, defer repayment of principal and interest due on a direct loan made under subsection (a) or (b), if such loan was incurred by a qualified borrower.
The period of deferral for repayment under this paragraph shall begin on the date on which the eligible reservist is ordered to active service and shall terminate on the date that is 180 days after the date such eligible reservist is discharged or released from active service.
Notwithstanding any other provision of law, during the period of deferral described in subparagraph (B), the Administration may, in its discretion, reduce the interest rate on any loan qualifying for a deferral under this paragraph.
The Administration shall—
encourage intermediaries participating in the program under subsection (m) to defer repayment of a loan made with proceeds made available under that subsection, if such loan was incurred by a small business concern that is eligible to apply for assistance under subsection (b)(3); and
not later than 30 days after August 17, 1999, establish guidelines to—
encourage lenders and other intermediaries to defer repayment of, or provide other relief relating to, loan guarantees under subsection (a) and financings under section 697a of this title that were incurred by small business concerns that are eligible to apply for assistance under subsection (b)(3), and loan guarantees provided under subsection (m) if the intermediary provides relief to a small business concern under this paragraph; and
implement a program to provide for the deferral of repayment or other relief to any intermediary providing relief to a small business borrower under this paragraph.
In this subsection:
The term “active service” has the meaning given that term in section 101(d)(3) of title 10.
The term “eligible reservist” means a member of a reserve component of the Armed Forces ordered to perform active service for a period of more than 30 consecutive days.
The term “essential employee” means an individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful day-to-day operations of that small business concern.
The term “qualified borrower” means—
an individual who is an eligible reservist and who received a direct loan under subsection (a) or (b) before being ordered to active service; or
a small business concern that received a direct loan under subsection (a) or (b) before an eligible reservist, who is an essential employee, was ordered to active service.
The Administration shall, upon written request, defer repayment of principal and interest due on a direct loan made under subsection (a) or (b), if such loan was incurred by a qualified borrower.
The period of deferral for repayment under this paragraph shall begin on the date on which the eligible reservist is ordered to active service and shall terminate on the date that is 180 days after the date such eligible reservist is discharged or released from active service.
Notwithstanding any other provision of law, during the period of deferral described in subparagraph (B), the Administration may, in its discretion, reduce the interest rate on any loan qualifying for a deferral under this paragraph.
The Administration shall—
encourage intermediaries participating in the program under subsection (m) to defer repayment of a loan made with proceeds made available under that subsection, if such loan was incurred by a small business concern that is eligible to apply for assistance under subsection (b)(3); and
not later than 30 days after August 17, 1999, establish guidelines to—
encourage lenders and other intermediaries to defer repayment of, or provide other relief relating to, loan guarantees under subsection (a) and financings under section 697a of this title that were incurred by small business concerns that are eligible to apply for assistance under subsection (b)(3), and loan guarantees provided under subsection (m) if the intermediary provides relief to a small business concern under this paragraph; and
implement a program to provide for the deferral of repayment or other relief to any intermediary providing relief to a small business borrower under this paragraph.