Small Business Loan Enhancement Act

Summary: Small Business Loan Enhancement Act - Amends the Small Business Investment Act (SBIA):  (1) to include women-owned business development among the public policy goals for projects eligible for small business development company loans; and (2) to direct the Administrator of the Small Business Adminstration to require an appraisal of real estate if a loan made for plant acquisition, construction, conversion or expansion includes more than $250,000 for a real estate transaction, or to authorize the lender to require such an appraisal if the loan involves the use of $250,000 or less for such a transaction. 
Amends the Small Business Act to:  (1) authorize loans to small businesses for assistance in meeting Year 2000 technology requirements; and (2) set forth the same real estate appraisal requirements for loans under such Act as prescribed for SBIA loans above. 
Repeals provisions concerning the payment of accrued interest with respect to SBA-guaranteed small business loans. 
Amends the SBA's Microloan Program to:  (1) require its loan loss reserve fund to be maintained at a level equal to not more than 15 percent of the outstanding balance of the microloans owed to the intermediary; and (2) allow such fund to be reduced below such level if the intermediary can demonstrate to the Administrator, after a five-year participation period, that the average loan loss rate during such period is less than 15 percent, and the Administrator determines that no other factors are likely to impair the intermediary's ability to repay all obligations owed to the SBA. Directs the Administrator to then reduce such rate accordingly, except that such rate cannot be reduced to less than ten percent of the outstanding balance of the microloans owed to such intermediary.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Loan Enhancement 
Act''.

SEC. 2. LOANS FOR PLANT ACQUISITION, CONSTRUCTION, CONVERSION, AND 
              EXPANSION.

    (a) Public Policy Goals.--Section 501(d)(3)(C) of the Small 
Business Investment Act of 1958 (15 U.S.C. 695(d)(3)(C)) is amended by 
inserting ``or women-owned business development'' before the comma.
    (b) Real Estate Appraisals.--Section 502(3) of the Small Business 
Investment Act of 1958 (15 U.S.C. 696(3)) is amended by adding at the 
end the following:
                    ``(F) Real estate appraisals.--
                            ``(i) Loans exceeding $250,000.--
                        Notwithstanding any other provision of law, if 
                        a loan under this section involves the use of 
                        more than $250,000 of the loan proceeds for a 
                        real estate transaction, prior to disbursement 
                        of the loan, the Administrator shall require an 
                        appraisal of the real estate by a State 
                        licensed or certified appraiser.
                            ``(ii) Loans of $250,000 or less.--
                        Notwithstanding any other provision of law, if 
                        a loan under this subsection involves the use 
                        of $250,000 or less of the loan proceeds for a 
                        real estate transaction, prior to disbursement 
                        of the loan, the participating lender may, in 
                        accordance with the policy of the participating 
                        lender with respect to loans made without a 
                        government guarantee, require an appraisal of 
                        the real estate by a State licensed or 
                        certified appraiser.
                            ``(iii) Definition.--In this subparagraph, 
                        the term `real estate transaction' includes the 
                        acquisition or construction of land or a 
                        building and any improvement to land or to a 
                        building.''.

SEC. 3. SECTION 7(A) LOAN PROGRAM.

    (a) Year 2000 Technology Requirements.--Section 7(a) of the Small 
Business Act (15 U.S.C. 636(a)) is amended, in the matter preceding 
paragraph (1), by inserting ``and to assist small business concerns in 
meeting technology requirements for the Year 2000,'' after ``and 
working capital,''.
    (b) Real Estate Appraisals.--Section 7(a) of the Small Business Act 
(15 U.S.C. 636(a)) is amended by adding at the end the following:
            ``(27) Real estate appraisals.--
                    ``(A) Loans exceeding $250,000.--Notwithstanding 
                any other provision of law, if a loan guaranteed under 
                this subsection involves the use of more than $250,000 
                of the loan proceeds for a real estate transaction, 
                prior to disbursement of the loan, the Administrator 
                shall require an appraisal of the real estate by a 
                State licensed or certified appraiser.
                    ``(B) Loans of $250,000 or less.--Notwithstanding 
                any other provision of law, if a loan guaranteed under 
                this subsection involves the use of $250,000 or less of 
                the loan proceeds for a real estate transaction, prior 
                to disbursement of the loan, the participating lender 
                may, in accordance with the policy of the participating 
                lender with respect to loans made without a government 
                guarantee, require an appraisal of the real estate by a 
                State licensed or certified appraiser.
                    ``(C) Definition.--In this paragraph, the term 
                `real estate transaction' includes the acquisition or 
                construction of land or a building and any improvement 
                to land or to a building.''.
    (c) Interest Rates.--Section 7(a)(4) of the Small Business Act (15 
U.S.C. 636(a)(4)) is amended--
            (1) by striking ``(4)'' and all that follows through 
        ``Notwithstanding'' and inserting the following:
            ``(4) Interest rates.--Notwithstanding''; and
            (2) by striking subparagraph (B).

SEC. 4. MICROLOAN PROGRAM.

    Section 7(m)(3)(D) of the Small Business Act (15 U.S.C. 
636(m)(3)(D)) is amended--
            (1) in the first sentence, by striking ``The 
        Administrator'' and inserting the following:
                            ``(i) In general.--The Administrator''; and
            (2) by striking the second sentence and inserting the 
        following:
                            ``(ii) Level of loan loss reserve fund.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the Administration 
                                shall require the loan loss reserve 
                                fund to be maintained at a level equal 
                                to not more than 15 percent of the 
                                outstanding balance of the microloans 
                                owed to the intermediary.
                                    ``(II) Reduction of loan loss 
                                reserve requirement.--After the initial 
                                5 years of an intermediary's 
                                participation in the program under this 
                                subsection, upon the initial request of 
                                the intermediary made at any time after 
                                that period, the Administrator shall 
                                annually conduct a review of the 
                                average annual loss rate of the 
                                intermediary and, if the intermediary 
                                demonstrates to the satisfaction of the 
                                Administrator that the average annual 
                                loss rate for the intermediary during 
                                the preceding 5-year period is less 
                                than 15 percent, and the Administrator 
                                determines that no other factor exists 
                                that is likely to impair the ability of 
                                the intermediary to repay all 
                                obligations owed to the Administration 
                                under this subsection, the 
                                Administrator shall reduce that annual 
                                loan loss reserve requirement to 
                                reflect the actual average annual loss 
                                rate for that intermediary during that 
                                period, except that in no case shall 
                                the loan loss reserve requirement for 
                                an intermediary be reduced to less than 
                                10 percent of the outstanding balance 
                                of the microloans owed to the 
                                intermediary.''.