Microloan Modernization Act of 2015

To amend the Small Business Act to provide for expanded participation in the microloan program, and for other purposes. 1. Short title This Act may be cited as the Microloan Modernization Act of 2015 2. Waivers of 25/75 rule (a) Waiver authorized Section 7(m)(4)(E)(i) of the Small Business Act ( 15 U.S.C. 636(m)(4)(E)(i) The Administrator shall by rule establish a process by which intermediaries may apply for and the Administrator may grant a waiver from the requirements of this clause. (b) Contents of rule In the rule required by the amendment made by subsection (a), the Administrator of the Small Business Administration shall require any applicant for a waiver to— (1) to specify how such applicant will use the additional technical assistance; and (2) provide assurance in a form provided for by the Administrator in the rule that the intermediary will have sufficient funds to provide technical assistance to all of the intermediary’s borrowers. (c) Rulemaking requirements The rule required by subsection (a) shall be promulgated after notice and the opportunity for comment of not less than 60 days. Such regulation shall be codified in the Code of Federal Regulations and shall incorporate any delegation of the Administrator’s authority to approve waivers to any appropriate subsidiary official. 3. Microloan intermediary lending limit increased Section 7(m)(3)(C) of the Small Business Act ( 15 U.S.C. 636(m)(3)(C) $5,000,000 $6,000,000 4. Extended repayment terms Section 7(m)(6) of the Small Business Act ( 15 U.S.C. 636(m)(6) (F) Repayment terms for loans to small businesses The Administrator may not impose limitations on the term for repayment of a loan made by an intermediary to a small business concern or entrepreneur, except that— (i) in the case of a loan made by an intermediary of $10,000 or less, the repayment term shall be not more than 6 years; and (ii) in the case of a loan greater than $10,000, the repayment term shall be not more than 10 years. . 5. Lines of credit authorized Section 7(m)(6)(A) of the Small Business Act ( 15 U.S.C. 636(m)(6)(A) short-term (including lines of credit) 6. GAO study of microenterprise participation Not later than 120 days after the date of enactment of this Act, the Comptroller General of the United States shall complete a study on and report to the Committee on Small Business of the House of Representatives on the following: (1) The operations (including services provided, structure, size, and area of operation) of a representative sample of— (A) intermediaries that are eligible for participation in the microloan program under section 7(m) of the Small Business Act and that do participate; and (B) intermediaries (including those operated for profit, operated as non-profits, and those affiliated with a United States institution of higher learning) that are so eligible and that do not participate. (2) The reasons why intermediaries described in paragraph (1)(B) choose not to participate. (3) Recommendations on how to encourage increased participation in the microloan program by intermediaries described in paragraph (1)(B). (4) Recommendations on how to decrease the costs associated with participation in the microloan program for eligible intermediaries. 7. Office of Advocacy economic study of mandatory savings requirement Not later than 120 days after the date of enactment of this Act, the Chief Counsel for Advocacy of the Small Business Administration shall submit to the Committee on Small Business of the House of Representatives a report on the economic impact of a mandatory savings requirement on business concerns eligible to participate in the microloan program under section 7(m) of the Small Business Act, including on the benefits and costs of such a requirement and recommendations on implementation of such a requirement. June 25, 2015 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Summary: Microloan Modernization Act of 2015 (Sec. 2) This bill amends the Small Business Act with respect to the rule under the Small Business Administration (SBA) Microloan Program (assisting low-income individuals to start and operate a small business) that permits SBA-designated microloan intermediary lenders to expend up to 25% of the grant funds they receive from the SBA to provide information and technical assistance to small businesses that are their prospective borrowers. The SBA must establish a process by which these microloan intermediaries may apply for, and the SBA may grant, a waiver of this 25/75 allocation. This rule shall require any waiver applicant to: specify how it will use the additional technical assistance, and make assurances that the intermediary will have sufficient funds to provide technical assistance to all of the intermediary's borrowers. (Sec. 3) The total amount of loans outstanding and committed to any particular intermediary (excluding outstanding grants) from the SBA business loan and investment fund is increased from $5 million to $6 million for the remaining years of the intermediary's participation in the program. (Sec. 4) The SBA may not impose limitations on the repayment term of a loan by an intermediary to a small business or entrepreneur. This repayment term, however, may not exceed: 6 years for a loan of $10,000 or less, or 10 years for a loan greater than $10,000. (Sec. 5) An eligible intermediary may include lines of credit among the short-term, fixed rate loans it makes to startup, newly established, and growing small businesses from SBA funds made available to the intermediary for working capital and the acquisition of materials, supplies, furniture, fixtures, and equipment. (Sec. 6) The Government Accountability Office shall: compare the operations of a representative sample of eligible intermediaries that participate in the microloan program and of eligible intermediaries that do not, study the reasons why the latter do not participate, recommend how to encourage increased participation by intermediaries in the microloan program, and recommend how to decrease the associated costs for intermediary participation. (Sec. 7) The SBA Office of Advocacy shall report to Congress on the economic impact of a mandatory savings requirement on businesses eligible to participate in the microloan program, including on the benefits and costs of such a requirement, and make implementing recommendations.