I 

109TH CONGRESS 

1ST SESSION H. R. 1868 

To amend the Small Business Act to provide for increased access to capital 

for small businesses under the section 7(a) loan program, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 27, 2005 

Ms. VELA ́ZQUEZ (for herself, Ms. BEAN, Mr. GRIJALVA, Mr. CASE, Mrs. 

CHRISTENSEN, and Mr. COOPER) introduced the following bill; which was 

referred to the Committee on Small Business 

A BILL 

To amend the Small Business Act to provide for increased 

access to capital for small businesses under the section 

7(a) loan program, 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 Access 

5 to Capital Act of 2005’’. 

6 SEC. 2. REDUCTION OF GUARANTEE FEES FOR SMALL 

7 BUSINESS BORROWERS. 

8 Section 7(a)(18)(A) of the Small Business Act (15 

9 U.S.C. 636(a)(18)(A)) is amended— 
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1 (1) in clause (i), by striking ‘‘2 percent’’ and 

2 inserting ‘‘1 percent’’; 

3 (2) in clause (ii), by striking ‘‘3 percent’’ and 

4 inserting ‘‘2.5 percent’’; and 

5 (3) by striking clause (iv). 

6 SEC. 3. REDUCTION OF GUARANTEE FEES FOR SMALL 

7 BUSINESS LENDERS. 

8 (a) REDUCTION OF LENDER GUARANTEE FEES.— 

9 Section 7(a)(23)(A) of the Small Business Act (15 U.S.C. 

10 636(a)(23)(A)) is amended to read as follows: 

11 ‘‘(A) IN GENERAL.—With respect to each 

12 loan guaranteed under this subsection, the Ad13 ministrator shall assess, collect, and retain a 

14 fee, not to exceed 0.36 percent per year of the 

15 outstanding balance of the deferred participa16 tion share of the loan.’’. 

17 (b) ELIMINATION OF FEE ADJUSTMENT BY ADMINIS18 TRATION.—Section 7(a)(23) of such Act (15 U.S.C. 

19 636(a)(23)) is amended by striking subparagraph (C). 

20 SEC. 4. COMBINATION FINANCING. 

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

22 636(a)) is amended by adding at the end the following 

23 new paragraph: 

24 ‘‘(32) COMBINATION FINANCING.— 
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1 ‘‘(A) IN GENERAL.—A loan guaranteed 

2 under this subsection may be combined with a 

3 non-guaranteed loan. 

4 ‘‘(B) DEFERRED PARTICIPATION LOAN SE5 CURITY.—A loan guaranteed under this sub6 section that is part of combination financing 

7 may be secured by a subordinated lien. 

8 ‘‘(C) NON-GUARANTEED LOAN AMOUNT.— 

9 In the case of any combination financing, the 

10 amount of the non-guaranteed loan shall not ex11 ceed the gross amount of the guaranteed loan. 

12 ‘‘(D) NON-GUARANTEED LOAN PROVI13 SIONS.—A non-guaranteed loan that is part of 

14 a combination financing— 

15 ‘‘(i) may be made by the participating 

16 lender that provides the guaranteed loan or 

17 may be made by a different lender; 

18 ‘‘(ii) may be secured by a senior lien; 

19 and 

20 ‘‘(iii) may be made by a lender in the 

21 Preferred Lenders Program, as defined in 

22 paragraph (2)(C)(ii), if applicable. 

23 ‘‘(E) BUSINESS LOAN ELIGIBILITY.—The 

24 Administrator shall not prescribe any standard 

25 relating to the eligibility of small business con-
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1 cerns to obtain combination financing under 

2 this paragraph that unreasonably restricts the 

3 availability of combination financing to small 

4 business concerns. 

5 ‘‘(F) DEFINITIONS.—In this paragraph— 

6 ‘‘(i) the term ‘combination financing’ 

7 means financing comprised of a loan guar8 anteed under this subsection and a non9 guaranteed loan; and 

10 ‘‘(ii) the term ‘non-guaranteed loan’ 

11 means a loan, no portion of which is guar12 anteed by the Federal Government.’’. 

13 SEC. 5. INCREASE IN MAXIMUM GUARANTEED AMOUNT 

14 AND GROSS LOAN AMOUNT UNDER SECTION 

15 7(a) OF SMALL BUSINESS ACT. 

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

17 U.S.C. 636(a)(3)(A)) is amended— 

18 (1) by striking ‘‘1,500,000’’ and inserting 

19 ‘‘2,000,000’’; and 

20 (2) by striking ‘‘2,000,000’’ and inserting 

21 ‘‘$3,000,000’’. 

22 SEC. 6. EFFECTIVE DATE. 

23 The amendments made by this Act shall take effect 

24 on October 1, 2005. 

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