I 
113TH CONGRESS 
1ST SESSION H. R. 2451 
To direct the Administrator of the Small Business Administration to establish 
and carry out a direct lending program for small business concerns, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 20, 2013 
Ms. VELA´ZQUEZ (for herself, Mr. PAYNE, Ms. CHU, and Ms. CLARKE) intro-
duced the following bill; which was referred to the Committee on Small 
Business 
A BILL 
To direct the Administrator of the Small Business Adminis-
tration to establish and carry out a direct lending pro-
gram for small business concerns, and for other pur-
poses. 
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 ‘‘Strengthening Entre-
preneurs’ Economic Development Act of 2013’’. 
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SEC. 2. DIRECT LENDING PROGRAM FOR SMALL BUSINESS 
CONCERNS. 
(a) ESTABLISHMENT.—The Administrator of the 
Small Business Administration shall— 
(1) establish and carry out a loan program (in 
this Act referred to as the ‘‘program’’); and 
(2) establish a process under which an eligible 
small business concern may submit an application to 
the Administrator for the purpose of securing a loan 
under the program. 
(b) LOAN AMOUNT.—Each loan made to an eligible 
small business concern under the program shall be in an 
amount not to exceed $150,000. 
(c) REPAYMENT PERIOD.—An eligible small business 
concern that receives a loan under the program shall repay 
the loan not later than 6 years after the date on which 
such loan is disbursed. 
(d) NO PREPAYMENT PENALTY.—There shall be no 
prepayment penalty on a loan made under the program. 
(e) INTEREST RATE.—The maximum legal rate of in-
terest on any loan made under the program shall not ex-
ceed the sum of the rate prescribed by the Administrator 
pursuant to section 7(a)(4)(A) of the Small Business Act 
(15 U.S.C. 636(a)(4)(A)) for direct loans plus 5 percent. 
(f) BORROWER FEES.—With respect to each loan 
made to an eligible small business concern under the pro-
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gram, the Administrator may collect a fee from the bor-
rower using the formula established under section 
7(a)(18) of the Small Business Act (15 U.S.C. 
636(a)(18)). 
(g) UNDERWRITING STANDARDS.—Not later than 
180 days after the date of enactment of this Act, the Ad-
ministrator shall issue guidance regarding prudent under-
writing standards that must be used for loans made under 
the program. 
(h) LENDER PARTICIPATION.— 
(1) LENDERS.— 
(A) IN
GENERAL.—The Administrator 
shall establish a process under which the Ad-
ministrator makes available to lenders each loan 
application submitted for the purpose of such 
lenders originating, underwriting, closing, and 
servicing the loan for which the applicant ap-
plied. 
(B) ELIGIBILITY.—Lenders are eligible to 
receive a loan application described in subpara-
graph (A) if they participate in the program. 
(C) LOCAL LENDERS.—The Administrator 
shall first make available a loan application de-
scribed in subparagraph (A) to lenders within 
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50 miles of the principal office of the loan ap-
plicant. 
(D) PREFERRED
LENDERS.—If a lender 
described in subparagraph (C) does not agree 
to originate, underwrite, close, and service the 
loan applied for within 5 business days of re-
ceiving a loan application described in subpara-
graph (A), the Administrator shall subsequently 
make available such loan application to lenders 
in the Preferred Lenders Program under sec-
tion 7(a)(2)(C)(ii) of the Small Business Act 
(15 U.S.C. 636(a)(2)(C)(ii)). 
(E) AUTHORITY OF ADMINISTRATION TO 
LEND.—If a lender described in subparagraphs 
(C) and (D) does not agree to originate, under-
write, close, and service the loan applied for 
within 10 business days of receiving a loan ap-
plication described in subparagraph (A), the 
Administrator shall, in accordance with the un-
derwriting standards promulgated under sub-
section (g), consider such loan for origination, 
underwriting, closing, and servicing by the Ad-
ministration within 10 business days. 
(2) ASSET
SALES.—The Administrator shall 
offer to sell loans made by the Administrator under 
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the program. Such sales shall be made through the 
semi-annual public solicitation (in the Federal Reg-
ister and in other media) of offers to purchase. The 
Administrator may contract with vendors for due 
diligence, asset valuation, and other services related 
to such sales. The Administrator may not sell any 
loan under the program for less than 90 percent of 
the net present value of the loan, as determined and 
certified by a qualified third party. 
(3) LOANS
NOT
SOLD.—The Administrator 
shall maintain and service loans made by the Admin-
istrator under this paragraph that are not sold 
through the asset sales under this subsection. 
(i) DEFINITIONS.—In this Act: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Small Busi-
ness Administration. 
(2) ELIGIBLE
SMALL
BUSINESS
CONCERN.— 
The term ‘‘eligible small business concern’’ means a 
small business concern that has less than 20 employ-
ees. 
(3) SMALL
BUSINESS
CONCERN.—The term 
‘‘small business concern’’ has the same meaning 
given such term under section 3 of the Small Busi-
ness Act (15 U.S.C. 632). 
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SEC. 3. FEE FOR HIGH-DOLLAR 7(a) LOANS. 
Section 7(a) of the Small Business Act is amended— 
(1) by redesignating paragraphs (31) through 
(35) as paragraphs (32) through (36); and 
(2) by inserting the following new paragraph: 
‘‘(31) FEE
FOR
HIGH-DOLLAR
LOANS.—With 
respect to each loan in excess of $2,000,000 ap-
proved under this subsection, the Administration 
shall assess, collect, and retain a fee not to exceed 
a certain percentage, as determined by the Adminis-
trator, of the outstanding balance of the deferred 
participation share of the loan, as necessary to re-
duce to zero the cost to the Administration of mak-
ing loans under this subsection. As used in the para-
graph, the term ‘cost’ has the meaning given that 
term in section 502 of the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661a).’’. 
Æ 
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