116TH CONGRESS 
2D SESSION 
H. R. 8211 
AN ACT 
To amend the Small Business Investment Act of 1958 to 
improve the loan guaranty program, enhance the ability 
of small manufacturers to access affordable capital, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘504 Modernization and 
Small Manufacturer Enhancement Act of 2020’’. 
SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOP-
MENT COMPANY PROGRAM. 
Section 501(d)(3) of the Small Business Investment 
Act of 1958 (15 U.S.C. 695(d)(3)) is amended— 
(1) by redesignating subparagraphs (A) through 
(L) as subparagraphs (B) through (M), respectively; 
(2) by inserting before subparagraph (B) (as so 
redesignated) the following: 
‘‘(A) workforce development through work- 
based or work-integrated training, which shall 
be satisfied by demonstrating that a small busi-
ness concern that is a subject of the project 
has— 
‘‘(i) a documented in-house training 
program, the duration of which is not 
shorter than 12 weeks; or 
‘‘(ii) entered into a contract with an 
entity— 
‘‘(I) to provide trained applicants 
for any open position of employment 
at the small business concern; and 
‘‘(II) that ensures that any appli-
cant provided to the small business
concern under subclause (I) has un-
dergone not fewer than 12 weeks of 
training that is relevant to the open 
position described in that subclause,’’; 
(3) by amending subparagraph (D) (as so re-
designated) to read as follows: 
‘‘(D) expansion of minority-owned, em-
ployee-owned, or women-owned business devel-
opment,’’; 
(4) in subparagraph (L) (as so redesignated), 
by striking ‘‘producers, or’’ and inserting ‘‘pro-
ducers,’’; 
(5) in subparagraph (M) (as so redesignated), 
by striking the period at the end and inserting a 
comma; 
(6) by inserting after subparagraph (M) the fol-
lowing new subparagraphs: 
‘‘(N) enhanced ability for small business 
concerns to reduce costs by using energy effi-
cient products and generating renewable en-
ergy, 
‘‘(O) aid revitalizing of any area for which 
a disaster has been declared or determined 
under subparagraph (A), (B), (C), or (E) of 
section 7(b)(2) of the Small Business Act, or
‘‘(P) expansion of small business concerns 
with 10 or fewer employees.’’; and 
(7) in the flush text following subparagraph 
(P), as added by paragraph (6), by striking ‘‘sub-
paragraphs (J) and (K)’’ and inserting ‘‘subpara-
graphs (K) and (L)’’. 
SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFAC-
TURING LOANS. 
Section 502 of the Small Business Investment Act 
of 1958 (15 U.S.C. 696) is amended— 
(1) in the matter preceding paragraph (1), by 
striking ‘‘The Administration’’ and inserting the fol-
lowing: 
‘‘(a) IN GENERAL.—The Administration’’; and 
(2) in subsection (a), as so designated— 
(A) in paragraph (2)(A)— 
(i) in the matter preceding clause (i), 
by striking ‘‘section’’ and inserting ‘‘sub-
section’’; and 
(ii) 
in 
clause 
(iii), 
by 
striking 
‘‘$5,500,000’’ and inserting ‘‘$6,500,000’’; 
and 
(B) in paragraph (3)(A), by striking ‘‘this 
section’’ and inserting ‘‘this subsection’’.
SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCE-
DURE. 
Title V of the Small Business Investment Act of 1958 
(15 U.S.C. 695 et seq.) is amended— 
(1) in section 502, as amended by section 3, by 
adding at the end the following new subsections: 
‘‘(b) CLOSING.— 
‘‘(1) AUTHORITY
OF
CERTAIN
DEVELOPMENT 
COMPANIES.—An accredited lender certified com-
pany may take any of the following actions to facili-
tate the closing of a loan made under subsection (a): 
‘‘(A) Reallocate the cost of the project with 
respect to which the loan is made in an amount 
that is not more than 10 percent of the overall 
cost of the project. 
‘‘(B) Correct any name that is applicable 
to the loan, including the name of any bor-
rower, guarantor, eligible passive company de-
scribed in subparagraph (C)(i), and operating 
company described in subparagraph (C)(ii). 
‘‘(C) Form any of the following to receive 
proceeds of the loan: 
‘‘(i) An eligible passive company that 
complies with section 120.111 of title 13, 
Code of Federal Regulations, or any suc-
cessor regulation.
‘‘(ii) If an eligible passive company is 
formed under clause (i), an operating com-
pany with respect to that eligible passive 
company. 
‘‘(D) Correct the address of any property 
with respect to which the loan is made. 
‘‘(E) Correct the name of any interim 
lender or third-party lender. 
‘‘(F) Change any third-party lender or in-
terim lender if that lender is a financial institu-
tion that is regulated by the Federal Govern-
ment or a State government. 
‘‘(G) Make a guarantor a co-borrower or a 
co-borrower a guarantor. 
‘‘(H) Add a guarantor that does not 
change ownership with respect to the loan. 
‘‘(I) Reduce the amount of standby debt 
before the closing as a result of regularly sched-
uled payments. 
‘‘(J) Reduce the cost of the project with 
respect to which the loan is made. 
‘‘(2) FEES.—The Administrator shall— 
‘‘(A) issue a rule regarding the amount of 
a closing fee that may be financed in a deben-
ture that is issued by a certified development
company to make one or more loans to small 
business concerns, the proceeds of which are 
used by that concern for the purposes described 
in subsection (a), except that such amount shall 
be not less than $3,500; and 
‘‘(B) periodically update the rule issued 
under subparagraph (A). 
‘‘(3) NO
ADVERSE
CHANGE
AND
FINANCIAL 
STATEMENT.—Before the closing with respect to a 
loan made under subsection (a), the borrower and 
any operating company shall— 
‘‘(A) make the certification required under 
section 120.892 of title 13, Code of Federal 
Regulations, or any successor regulation; and 
‘‘(B) submit to the certified development 
company a financial statement that is not more 
than 180 days old, which the company shall 
certify not later than 120 days before the date 
on which the certified development company 
issues a debenture with respect to the project to 
which the loan relates. 
‘‘(c) EXPRESS PROGRAM.—An accredited lender cer-
tified company may, with respect to a covered loan, take 
any of the following actions with respect to the loan:
‘‘(1) Any action described in any of subpara-
graphs (A) through (J) of subsection (b)(1). 
‘‘(2) If the borrower is not delinquent with re-
spect to the loan payments— 
‘‘(A) permit the loan to subordinate to a 
new third-party lender loan for the purposes of 
refinancing that third-party lender loan, except 
that no refinanced amount with respect to the 
loan may be increased in order to provide cash 
to the borrower; 
‘‘(B) permit a new party to assume respon-
sibility for the loan if the original borrower re-
mains on the loan as the original guarantor; 
‘‘(C) obtain force placed insurance cov-
erage for the loan if the borrower has allowed 
insurance coverage with respect to the loan to 
lapse; and 
‘‘(D) endorse an insurance check with re-
spect to the property that is financed by the 
loan in an amount that is less than $100,000. 
‘‘(3) Certify that the loan is compliant with the 
appraisal requirements and environmental policies 
and procedures applicable to the loan under Stand-
ard Operating Procedure 50 10 6 of the Administra-
tion, effective August 28, 2020, or any successor 
Standard Operating Procedure. 
‘‘(d) DEFINITIONS.—In this section— 
‘‘(1) the term ‘accredited lender certified com-
pany’ means a certified development company that 
meets the requirements under section 507(b), includ-
ing a certified development company that the Ad-
ministration has designated as an accredited lender 
under such section 507(b); and 
‘‘(2) the term ‘covered loan’— 
‘‘(A) means a loan made under subsection 
(a) in an amount that is not more than 
$500,000; and 
‘‘(B) does not include a loan made to a 
borrower that is a franchise that, or is in an in-
dustry that, has a high rate of default, as annu-
ally determined by the Administrator.’’; and 
(2) by adding at the end the following new sec-
tion: 
‘‘SEC. 511. CLOSING AND OVERSIGHT. 
‘‘(a) SBA DISTRICT COUNSELS.—Beginning on the 
date of enactment of this section, with respect to the pro-
gram established under this title, district counsels of the 
Administration shall be subject to the same requirements, 
and shall have the same authority and responsibilities, as
in effect with respect to that program on the day before 
the date of enactment of this section, except that— 
‘‘(1) the Office of Credit Risk Management of 
the Administration shall have the responsibility for 
all duties relating to conducting file reviews of loans 
made under this title; and 
‘‘(2) district counsels of the Administration 
shall not have any responsibility relating to the re-
view of closing packages with respect to a loan made 
under this title. 
‘‘(b) DESIGNATED ATTORNEYS.—For the purposes of 
this title, the following provisions and requirements shall 
apply with respect to a designated attorney of a certified 
development company: 
‘‘(1) A designated attorney that meets the re-
quirements determined under paragraph (2) shall be 
responsible for certifying documents relating to the 
closing of a loan described in this title. 
‘‘(2) The Administrator may determine any 
continuing education requirements that the des-
ignated attorney shall be required to satisfy in order 
to be permitted to close a loan made under this title. 
‘‘(3) If, as of the date of enactment of this sec-
tion, a certified development company does not have 
a designated attorney, during the 270-day period be-
ginning on that date of enactment, the certified de-
velopment company may identify such an attorney, 
subject to the approval of the Administrator.’’. 
SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR 
SMALL MANUFACTURERS. 
(a) 
CONTRIBUTION
REQUIREMENT.—Section 
502(a)(3)(C) of the Small Business Investment Act of 
1958, as designated by section 3, is amended— 
(1) by redesignating clauses (i), (ii), (iii), and 
(iv) as subclauses (I), (II), (III), and (IV), respec-
tively, and adjusting the margins of such subclauses 
accordingly; 
(2) by inserting before subclause (I), as so re-
designated, the following: 
‘‘(i) for a small business concern that 
is not a small manufacturer (as defined in 
section 501(e)(7))—’’; 
(3) in subclause (III), as so redesignated, by 
striking ‘‘clauses (i) and (ii)’’ and inserting ‘‘sub-
clauses (I) and (II)’’; 
(4) in subclause (IV) as so redesignated, by 
striking the period and the end and inserting ‘‘; or’’; 
and 
(5) by adding at the end the following:
‘‘(ii) for a small manufacturer (as de-
fined in section 501(e)(7))— 
‘‘(I) at least 5 percent of the 
total cost of the project financed, if 
the small business concern has been in 
operation for a period of 2 years or 
less; 
‘‘(II) at least 5 percent of the 
total cost of the project financed, if 
the project involves a limited or single 
purpose building or structure; 
‘‘(III) at least 10 percent of the 
total cost of the project financed if the 
project involves both of the conditions 
set forth in subclauses (I) and (II); or 
‘‘(IV) at least 5 percent of the 
total cost of the project financed, in 
all other circumstances, at the discre-
tion of the development company.’’. 
(b) CREATION OR RETENTION OF JOBS REQUIRE-
MENT.—Section 501(e) of the Small Business Investment 
Act of 1958 (15 U.S.C. 695(e)) is amended— 
(1) in paragraph (1), by striking ‘‘creates or re-
tains’’ and all that follows through the period at the 
end and inserting ‘‘creates or retains 1 job for every
$75,000 guaranteed by the Administration, except 
that the amount is $150,000 in the case of a project 
of a small manufacturer.’’; 
(2) in paragraph (2), by striking ‘‘creates or re-
tains’’ and all that follows through the period at the 
end and inserting ‘‘creates or retains 1 job for every 
$75,000 guaranteed by the Administration, except 
that the amount is $150,000 in the case of a project 
of a small manufacturer.’’; 
(3) by redesignating paragraph (6) as para-
graph (7); and 
(4) by inserting after paragraph (5) the fol-
lowing: 
‘‘(6) For a loan for a project directed toward the cre-
ation of job opportunities under subsection (d)(1), the Ad-
ministrator shall publish on the website of the Administra-
tion the number of jobs created or retained under the 
project as of the date that is 2 years after the completion 
(as determined based on information provided by the de-
velopment company) of the project.’’. 
(c) 
COLLATERAL
REQUIREMENTS.—Section 
502(a)(3)(E)(i) of the Small Business Investment Act of 
1958, as designated by section 3, is amended by adding 
at the end the following: ‘‘Additional collateral shall not
be required in the case of a small manufacturer (as de-
fined in section 501(e)(7)).’’. 
(d) DEBT REFINANCING.—Section 502(a)(7)(B) of 
the Small Business Investment Act of 1958, as designated 
by section 3, is amended in the matter preceding clause 
(i) by inserting ‘‘(or in the case of a small manufacturer 
(as defined in section 501(e)(7)), that does not exceed 100 
percent of the project cost of the expansion)’’ after ‘‘cost 
of the expansion’’. 
(e) AMOUNT OF GUARANTEED DEBENTURE.—Sec-
tion 503(a) of the Small Business Investment Act of 1958 
(15 U.S.C. 697(a)) is amended by adding at the end the 
following: 
‘‘(5) Any debenture issued by a State or local devel-
opment company to a small manufacturer (as defined in 
section 501(e)(7)) with respect to which a guarantee is 
made under this subsection shall be in an amount equal 
to not more than 50 percent of the cost of the project 
with respect to which such debenture is issued, without 
regard to whether good cause has been shown.’’. 
SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS. 
Title V of the Small Business Investment Act of 1958 
(15 U.S.C. 695 et seq.), as amended by section 4(2), is 
further amended by adding at the end the following new 
section:
‘‘SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS. 
‘‘(a) IN GENERAL.—The Administrator shall ensure 
that each district office of the Administration partners 
with not less than 1 resource partner to provide training 
to small business concerns assigned a North American In-
dustry Classification System code for manufacturing on 
obtaining assistance under the program carried out under 
this title, including with respect to the application process 
under that program and partnering with development 
companies under this title. 
‘‘(b) RESOURCE PARTNER DEFINED.—In this sec-
tion, the term ‘resource partner’ means— 
‘‘(1) a small business development center (as 
defined in section 3 of the Small Business Act); 
‘‘(2) a women’s business center (described 
under section 29 of such Act); 
‘‘(3) a chapter of the Service Corps of Retired 
Executives (established under section 8(b)(1)(B) of 
such Act); and 
‘‘(4) a Veteran Business Outreach Center (de-
scribed under section 32 of such Act).’’. 
SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXIST-
ING BUILDINGS. 
(a) IN GENERAL.—Section 502(a) of the Small Busi-
ness Investment Act of 1958, as designated by section 3,
is amended by striking paragraphs (4) and (5) and insert-
ing the following new paragraphs: 
‘‘(4) NEW FACILITIES.— 
‘‘(A) IN
GENERAL.—With respect to a 
project to construct a new facility, an assisted 
small business concern may permanently lease 
not more than 20 percent of the project if such 
concern— 
‘‘(i) permanently occupies and uses 
not less than 60 percent of the project; 
‘‘(ii) plans to occupy and use an addi-
tional portion of the project that is not 
permanently leased not later than 3 years 
after receipt of assistance under this sec-
tion; and 
‘‘(iii) plans to permanently occupy and 
use 80 percent of the project not later than 
10 years after receipt of such assistance. 
‘‘(B) SMALL MANUFACTURERS.—With re-
spect to an assisted small business concern that 
is a small manufacturer (as defined in section 
501(e)(6)), subparagraph (A)(i) shall apply 
with ‘50 percent’ substituted for ‘60 percent’.
‘‘(5) EXISTING BUILDINGS.—With respect to a 
project to acquire, renovate, or reconstruct an exist-
ing building, the following shall apply: 
‘‘(A) OCCUPANCY
REQUIREMENTS.—The 
assisted small business concern may perma-
nently lease not more than 50 percent of the 
project if the concern permanently occupies and 
uses not less than 50 percent of the project. 
‘‘(B) EXCEPTION.—The assisted small 
business concern may permanently lease more 
than 50 percent of the project if— 
‘‘(i) such concern— 
‘‘(I) has occupied and used the 
existing building for a consecutive 12- 
month period before submitting an 
application for assistance under this 
section; 
‘‘(II) agrees to permanently use 
less than 50 percent of the existing 
building and permanently lease more 
than 50 percent for a consecutive 12- 
month period after receiving such as-
sistance; and
‘‘(III) affirms that the existing 
building is appropriate for current 
and reasonably anticipated needs; and 
‘‘(ii) the development company assist-
ing such project— 
‘‘(I) provides written notice to 
the Administrator on the date on 
which the development company closes 
the loan for such project; and 
‘‘(II) once each year during the 
first 5 years of the loan, and once 
every 2 years for the remainder of the 
loan— 
‘‘(aa) conducts an examina-
tion of the assisted small busi-
ness concern to ensure the con-
cern is not a real estate develop-
ment business; and 
‘‘(bb) files with the Adminis-
trator an anti-investor certifi-
cation signed by the development 
company and the assisted small 
business concern. 
‘‘(C) LEASE TERM.—Any residential lease 
made under this paragraph shall be for a term
of not more than 1 year, and any commercial 
lease made under this paragraph shall be for a 
term of not more than 5 years.’’. 
(b) REPORT.—Not later than 5 years after the date 
of the enactment of this Act, the Administrator of the 
Small Business Administration shall submit to Congress 
a report analyzing the impact of the amendments made 
by this section on access to capital for small business con-
cerns (as defined under section 3 of the Small Business 
Act (15 U.S.C. 632)), and recommending whether similar 
notice, examination, and certifications requirements 
should be made to the program established under section 
7(a) of the Small Business Act (15 U.S.C. 636(a)). 
SEC. 8. LOW-INTEREST REFINANCING UNDER THE LOCAL 
DEVELOPMENT BUSINESS LOAN PROGRAM. 
(a) EXPANSIONS.—Section 502(a)(7)(B) of the Small 
Business Investment Act of 1958, as designated by section 
3 and amended by section 5(d), is further amended— 
(1) in the matter preceding clause (i), by strik-
ing ‘‘50 percent’’ and inserting ‘‘100 percent’’; and 
(2) in clause (v), by adding ‘‘and’’ at the end; 
(3) by striking clause (vi); and 
(4) by redesignating clause (vii) as clause (vi).
(b) REPEAL.—Section 521(a) of division E of the 
Consolidated Appropriations Act, 2016 (Public Law 114– 
113; 129 Stat. 2463; 15 U.S.C. 696 note) is repealed. 
(c) REFINANCING.—Section 502(a)(7) of the Small 
Business Investment Act of 1958, as designated by section 
3, is amended by adding at the end the following new sub-
paragraph: 
‘‘(C) REFINANCING
NOT
INVOLVING
EX-
PANSIONS.— 
‘‘(i) DEFINITIONS.—In this subpara-
graph— 
‘‘(I) the term ‘borrower’ means a 
small business concern that submits 
an application to a development com-
pany for financing under this sub-
paragraph; 
‘‘(II) the term ‘eligible fixed 
asset’ means tangible property relat-
ing to which the Administrator may 
provide financing under this section; 
and 
‘‘(III) the term ‘qualified debt’ 
means indebtedness that— 
‘‘(aa) was incurred not less 
than 6 months before the date of
the application for assistance 
under this subparagraph; 
‘‘(bb) is a commercial loan; 
‘‘(cc) the proceeds of which 
were used to acquire an eligible 
fixed asset; 
‘‘(dd) was incurred for the 
benefit of the small business con-
cern; and 
‘‘(ee) is collateralized by eli-
gible fixed assets; and 
‘‘(ii) AUTHORITY.—A project that 
does not involve the expansion of a small 
business concern may include the refi-
nancing of qualified debt if— 
‘‘(I) the amount of the financing 
is not more than 90 percent of the 
value of the collateral for the financ-
ing, except that, if the appraised value 
of the eligible fixed assets serving as 
collateral for the financing is less than 
the amount equal to 125 percent of 
the amount of the financing, the bor-
rower may provide additional cash or
other collateral to eliminate any defi-
ciency; 
‘‘(II) the borrower has been in 
operation for all of the 2-year period 
ending on the date the loan applica-
tion is submitted; and 
‘‘(III) for a financing for which 
the Administrator determines there 
will be an additional cost attributable 
to the refinancing of the qualified 
debt, the borrower agrees to pay a fee 
in an amount equal to the anticipated 
additional cost. 
‘‘(iii) FINANCING FOR BUSINESS EX-
PENSES.— 
‘‘(I) FINANCING
FOR
BUSINESS 
EXPENSES.—The Administrator may 
provide financing to a borrower that 
receives financing that includes a refi-
nancing of qualified debt under clause 
(ii), in addition to the refinancing 
under clause (ii), to be used solely for 
the payment of business expenses.
‘‘(II) APPLICATION FOR FINANC-
ING.— An application for financing 
under subclause (I) shall include— 
‘‘(aa) a specific description 
of the expenses for which the ad-
ditional financing is requested; 
and 
‘‘(bb) an itemization of the 
amount of each expense. 
‘‘(III) 
CONDITION
ON
ADDI-
TIONAL FINANCING.—A borrower may 
not use any part of the financing 
under this clause for non-business 
purposes. 
‘‘(iv) LOANS BASED ON JOBS.— 
‘‘(I) JOB CREATION AND RETEN-
TION GOALS.— 
‘‘(aa) IN
GENERAL.—The 
Administrator may provide fi-
nancing under this subparagraph 
for a borrower that meets the job 
creation goals under subsection 
(d) or (e) of section 501. 
‘‘(bb) ALTERNATE JOB RE-
TENTION
GOAL.—The Adminis-
trator may provide financing 
under this subparagraph to a 
borrower that does not meet the 
goals described in item (aa) in an 
amount that is not more than the 
product obtained by multiplying 
the number of employees of the 
borrower by $75,000. 
‘‘(II) NUMBER OF EMPLOYEES.— 
For purposes of subclause (I), the 
number of employees of a borrower is 
equal to the sum of— 
‘‘(aa) the number of full- 
time employees of the borrower 
on the date on which the bor-
rower applies for a loan under 
this subparagraph; and 
‘‘(bb) the product obtained 
by multiplying— 
‘‘(AA) the number of 
part-time employees of the 
borrower on the date on 
which the borrower applies 
for a loan under this sub-
paragraph; by