II 

109TH CONGRESS 

1ST SESSION S. 1603 

To establish a National Preferred Lender Program, facilitate the delivery 

of financial assistance to small businesses, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 29, 2005 

Ms. SNOWE introduced the following bill; which was read twice and referred 

to the Committee on Small Business and Entrepreneurship 

A BILL 

To establish a National Preferred Lender Program, facilitate 

the delivery of financial assistance to small businesses, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Business Lend5 ing Improvement Act of 2005’’. 

6 SEC. 2. NATIONAL PREFERRED LENDERS PROGRAM. 

7 Section 7(a)(2) of the Small Business Act (15 U.S.C. 

8 636(a)(2)) is amended by adding at the end the following: 

9 ‘‘(E) NATIONAL PREFERRED LENDERS

10 PROGRAM.— 
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•S 1603 IS

1 ‘‘(i) ESTABLISHMENT.—There is es2 tablished the National Preferred Lenders 

3 Program in the Preferred Lenders Pro4 gram operated by the Administration, in 

5 which a participant may operate as a pre6 ferred lender in any State if such lender 

7 meets appropriate eligibility criteria estab8 lished by the Administration. 

9 ‘‘(ii) TERMS AND CONDITIONS.—An 

10 applicant shall be approved under the fol11 lowing terms and conditions: 

12 ‘‘(I) TERM.—Each participant 

13 approved under this subparagraph 

14 shall be eligible to make loans for not 

15 more than 2 years under the program 

16 established under this subparagraph. 

17 ‘‘(II) RENEWAL.—At the expira18 tion of the term described in sub19 clause (I), the authority of a partici20 pant to make loans for the program 

21 established under this subparagraph 

22 may be renewed based on a review of 

23 performance during the previous term. 

24 ‘‘(III) EFFECT OF FAILURE.— 

25 Failure to meet the criteria under this 
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1 subparagraph shall not affect the eli2 gibility of a participant to continue as 

3 a preferred lender in a State or dis4 trict in which the participant is in 

5 good standing. 

6 ‘‘(iii) IMPLEMENTATION.— 

7 ‘‘(I) REGULATIONS.—As soon as 

8 is practicable, the Administrator shall 

9 promulgate regulations to implement 

10 the program established under this 

11 subparagraph. 

12 ‘‘(II) PROGRAM IMPLEMENTA13 TION.—Not later than 120 days after 

14 the date of enactment of this subpara15 graph, the Administrator shall imple16 ment the program established under 

17 this subparagraph.’’. 

18 SEC. 3. MAXIMUM LOAN AMOUNT. 

19 Section 7(a)(3)(A) of the Small Business Act (15 

20 U.S.C. 636(a)(3)(A)) is amended by striking ‘‘$1,500,000 

21 (or if the gross loan amount would exceed $2,000,000)’’ 

22 and inserting ‘‘$2,250,000 (or if the gross loan amount 

23 would exceed $3,000,000)’’. 
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•S 1603 IS

1 SEC. 4. SECTION 7(a) AUTHORIZATION FOR FISCAL YEAR 

2 2006. 

3 Section 20(e)(1)(B)(i) of the Small Business Act (15 

4 U.S.C. 631 note) is amended by striking 

5 ‘‘$17,000,000,000’’ and inserting ‘‘$18,000,000,000’’. 

6 SEC. 5. ALTERNATIVE SIZE STANDARD. 

7 Section 3(a)(3) of the Small Business Act (15 U.S.C. 

8 632(a)(3)) is amended— 

9 (1) by striking ‘‘When establishing’’ and insert10 ing the following: ‘‘ESTABLISHMENT OF SIZE

11 STANDARDS.— 

12 ‘‘(A) IN GENERAL.—When establishing’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(B) ALTERNATIVE SIZE STANDARD.— 

15 ‘‘(i) IN GENERAL.—Not later than 180 

16 days after the date of enactment of this sub17 paragraph, the Administrator shall establish an 

18 alternative size standard under paragraph (2), 

19 that shall be applicable to loan applicants under 

20 section 7(a) or under title V of the Small Busi21 ness Investment Act of 1958 (15 U.S.C. 695 et 

22 seq.). 

23 ‘‘(ii) CRITERIA.—The alternative size 

24 standard established under clause (i) shall uti25 lize the maximum net worth and maximum net 
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1 income of the prospective borrower as an alter2 native to the use of industry standards. 

3 ‘‘(iii) INTERIM RULE.—Until the Adminis4 trator establishes an alternative size standard 

5 under clause (i), the Administrator shall use the 

6 alternative size standard in section 121.301(b) 

7 of title 13, Code of Federal Regulations, for 

8 loan applicants under section 7(a) or under title 

9 V of the Small Business Investment Act of 

10 1958 (15 U.S.C. 695 et seq.).’’. 

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