I 
117TH CONGRESS 
2D SESSION 
H. R. 9311 
To authorize the Community Advantage Loan Program of the Small Business 
Administration, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 16, 2022 
Ms. CHU introduced the following bill; which was referred to the Committee 
on Small Business 
A BILL 
To authorize the Community Advantage Loan Program of 
the Small Business Administration, 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 ‘‘Community Advantage 
Loan Program Permanency Act of 2022’’. 
SEC. 2. FINDINGS. 
Congress finds that— 
(1) capital access remains one of the largest 
barriers to overcome for socially and economically 
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disadvantaged business owners as well as for the 
smallest small businesses; 
(2) according to the Double Jeopardy: COVID– 
19’s Concentrated Health and Wealth Effects in 
Black Communities study conducted by the Federal 
Reserve banks, in 2020— 
(A) firms owned by people of color are 
more likely to have weak capitalizations, limited 
bank relationships, and little in cash reserves; 
and 
(B) 51 percent of Black-owned businesses 
have less than 3 months of cash reserves in 
case of an emergency, which is nearly 7 per-
centage points higher than their peers; 
(3) according to the Small Business Credit Sur-
vey conducted by the Federal Reserve banks, in 
2021— 
(A) 31 percent of firms that sought financ-
ing received the full financing sought by the 
firm; 
(B) firms owned by people of color were 
least likely to receive the full amount of financ-
ing sought by the firm, with 15 percent of 
Asian-owned businesses, 16 percent of Black- 
owned businesses, and 19 percent of Hispanic- 
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owned businesses receiving full financing, as op-
posed to 35 percent of non-Hispanic White- 
owned businesses receiving full financing; and 
(C) firms with fewer employees were also 
least likely to receive the full financing sought 
by the firm, with 23 percent of businesses with 
1 to 4 employees and 37 percent of businesses 
with 5 to 49 employees receiving full financing, 
as opposed to 55 percent of businesses with 50 
to 499 employees receiving full financing; 
(4) the Community Advantage Pilot Program of 
the Small Business Administration has helped in-
crease lending backed by the Administration to firms 
owned by people of color, women, and veterans and 
firms classified as start ups; and 
(5) from fiscal year 2018 to fiscal year 2022— 
(A) 13 percent of loans under the Commu-
nity Advantage Pilot Program went to Black 
business owners, while 4 percent of loans under 
the loan program under section 7(a) of the 
Small Business Act (15 U.S.C. 636(a)) (in this 
section referred to as the ‘‘7(a) loan program’’) 
went to Black business owners; 
(B) 15 percent of loans under the Commu-
nity Advantage Pilot Program went to Hispanic 
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business owners, while 8 percent of loans under 
the 7(a) loan program went to Hispanic busi-
ness owners; 
(C) 20 percent of loans under the Commu-
nity Advantage Pilot Program went to women 
business owners, while 17 percent of loans 
under the 7(a) loan program went to women 
business owners; and 
(D) 9 percent of loans under the Commu-
nity Advantage Pilot Program went to veteran 
business owners, while 5 percent of loans under 
the 7(a) loan program went to veteran business 
owners; and 
(6) from fiscal year 2020 to fiscal year 2021, 
14 percent of loans under the Community Advantage 
Pilot Program went to startup business owners, 
while 7 percent of loans under the 7(a) loan pro-
gram went to startup business owners. 
SEC. 3. COMMUNITY ADVANTAGE LOAN PROGRAM. 
(a) IN GENERAL.—Section 7(a) of the Small Busi-
ness Act (15 U.S.C. 636(a)) is amended by adding at the 
end the following: 
‘‘(38) COMMUNITY
ADVANTAGE
LOAN
PRO-
GRAM.— 
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‘‘(A) PURPOSES.—The purposes of the 
Community Advantage Loan Program are— 
‘‘(i) to create a mission-oriented loan 
guarantee program that builds on the dem-
onstrated success of the Community Ad-
vantage Pilot Program of the Administra-
tion, as established in 2011, to reach more 
underserved small business concerns; 
‘‘(ii) to increase lending to small busi-
ness concerns in underserved and rural 
markets, including veterans and members 
of the military community, socially and 
economically disadvantaged individuals, as 
described in paragraphs (5) and (6)(A) of 
section 8(a), respectively, women, and new 
businesses; 
‘‘(iii) to ensure that the program 
under this subsection expands inclusion 
and more broadly meets congressional in-
tent to reach borrowers who are unable to 
get credit elsewhere on reasonable terms 
and conditions; 
‘‘(iv) to help underserved small busi-
ness concerns become bankable by utilizing 
the small dollar financing and business 
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support experience of mission-oriented 
lenders; 
‘‘(v) to allow certain mission-oriented 
lenders, primarily financial intermediaries 
focused on economic development in under-
served markets, access to guarantees for 
loans under this subsection (in this para-
graph referred to as ‘7(a) loans’) of not 
more than $350,000 and provide manage-
ment and technical assistance to small 
business concerns as needed; 
‘‘(vi) to provide certainty for the lend-
ing partners that make loans under this 
subsection and to attract new lenders; 
‘‘(vii) to encourage collaboration be-
tween mission-oriented and conventional 
lenders under this subsection in order to 
support underserved small business con-
cerns; and 
‘‘(viii) to assist covered institutions 
with providing business support services 
and technical assistance to small business 
concerns, when needed. 
‘‘(B) DEFINITIONS.—In this paragraph— 
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‘‘(i) the term ‘Community Advantage 
Network Partner’— 
‘‘(I) means a nonprofit, mission- 
oriented organization that acts as a 
Referral Agent to covered institutions 
in order to expand the reach of the 
program to small businesses in under-
served markets; and 
‘‘(II) does not include a covered 
institution making loans under the 
program; 
‘‘(ii) the term ‘covered institution’ 
means an entity that— 
‘‘(I) is— 
‘‘(aa) a development com-
pany, as defined in section 103 of 
the Small Business Investment 
Act of 1958 (15 U.S.C. 662), 
participating in the 504 Loan 
Guaranty 
program 
established 
under title V of that Act (15 
U.S.C. 695 et seq.); 
‘‘(bb) 
a 
nonprofit 
inter-
mediary, as defined in subsection 
(m)(11), participating in the 
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microloan program under sub-
section (m); 
‘‘(cc) a non-Federally regu-
lated entity or a lending institu-
tion certified as a community de-
velopment financial institution by 
the Community Development Fi-
nancial Institutions Fund estab-
lished under section 104(a) of 
the Riegle Community Develop-
ment and Regulatory Improve-
ment Act of 1994 (12 U.S.C. 
4703(a)); or 
‘‘(dd) 
an 
eligible 
inter-
mediary, as defined in subsection 
(l)(1), participating in the Inter-
mediary Lending Program estab-
lished under subsection (l)(2); 
and 
‘‘(II) has approved and disbursed 
10 similarly sized loans in the pre-
ceding 24-month period and is serv-
icing not less than 10 similarly sized 
loans to small business concerns in 
the portfolio of the entity; 
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‘‘(iii) the term ‘existing business’ 
means a small business concern that has 
been in existence for not less than 2 years 
on the date on which a loan is made to the 
small business concern under the program; 
‘‘(iv) the term ‘new business’ means a 
small business concern that has been in ex-
istence for not more than 2 years on the 
date on which a loan is made to the small 
business concern under the program; 
‘‘(v) the term ‘program’ means the 
Community Advantage Loan Program es-
tablished under subparagraph (C); 
‘‘(vi) the term ‘Referral Agent’ has 
the meaning given the term in section 
103.1(f) of title 13, Code of Federal Regu-
lations, or any successor regulation; 
‘‘(vii) the term ‘rural area’ means any 
county that the Bureau of the Census has 
defined as mostly rural or completely rural 
in the most recent decennial census; and 
‘‘(viii) the term ‘small business con-
cern in an underserved market’ means a 
small business concern— 
‘‘(I) that is located in— 
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‘‘(aa) a low- to moderate-in-
come community; 
‘‘(bb) a HUBZone, as that 
term is defined in section 31(b); 
‘‘(cc) a rural area; or 
‘‘(dd) any area for which a 
disaster declaration or determina-
tion described in subparagraph 
(A), (B), (C), or (E) of sub-
section (b)(2) has been made 
that has not terminated more 
than 2 years before the date (or 
later, as determined by the Ad-
ministrator) on which a loan is 
made to the small business con-
cern under the program, except 
that, in the case of a major dis-
aster described in subsection 
(b)(2)(A), that period shall be 5 
years; 
‘‘(II) for which more than 50 
percent of the employees reside in a 
low- or moderate-income community; 
‘‘(III) that is a new business; 
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‘‘(IV) owned and controlled by 
socially and economically disadvan-
taged individuals, as described in 
paragraphs (5) and (6)(A) of section 
8(a), respectively, which the Adminis-
trator, in carrying out the program, 
shall presume includes Black Ameri-
cans, Hispanic Americans, Native 
Americans, Asian Pacific Americans, 
and other minorities; 
‘‘(V) owned and controlled by 
women; 
‘‘(VI) owned and controlled by 
veterans or spouses of veterans; 
‘‘(VII) owned and controlled by a 
member of an Indian Tribe individ-
ually identified (including parentheti-
cally) in the most recent list published 
pursuant to section 104 of the Feder-
ally Recognized Indian Tribe List Act 
of 1994 (25 U.S.C. 5131); 
‘‘(VIII) owned and controlled by 
an individual who has completed a 
term of imprisonment in a Federal, 
State, or local jail or prison; 
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‘‘(IX) owned and controlled by an 
individual with a disability, as that 
term is defined in section 3 of the 
Americans with Disabilities Act of 
1990 (42 U.S.C. 12102); or 
‘‘(X) as otherwise determined by 
the Administrator. 
‘‘(C) ESTABLISHMENT.—There is estab-
lished a Community Advantage Loan Program 
under which the Administration may guarantee 
loans made by covered institutions under this 
subsection, with an emphasis on loans made to 
small business concerns in underserved mar-
kets. 
‘‘(D) PROGRAM
LEVELS.—In fiscal year 
2023 and each fiscal year thereafter, not more 
than 10 percent of the number of loans guaran-
teed under this subsection may be guaranteed 
under the program. 
‘‘(E) 
GRANDFATHERING
OF
EXISTING 
LENDERS.—Any covered institution that ac-
tively participated in the Community Advantage 
Pilot Program of the Administration and is in 
good standing, as determined by the Adminis-
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tration, on the day before the date of enactment 
of this paragraph— 
‘‘(i) shall retain designation in the 
program; 
‘‘(ii) shall not be required to submit 
an application to participate in the pro-
gram; and 
‘‘(iii) for the purpose of determining 
the loan loss reserve amount of the covered 
institution, shall have participation in the 
Community Advantage Pilot Program in-
cluded in the calculation under subpara-
graph (J). 
‘‘(F) REQUIREMENT TO MAKE LOANS TO 
UNDERSERVED
MARKETS.—Not less than 70 
percent of loans made by a covered institution 
under the program shall consist of loans made 
to small business concerns in underserved mar-
kets. 
‘‘(G) MAXIMUM LOAN AMOUNT.—The max-
imum loan amount for a loan guaranteed under 
the program is $350,000. 
‘‘(H) INTEREST
RATES.—The maximum 
allowable interest rate prescribed by the Admin-
istration on any financing made on a deferred 
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basis pursuant to the program shall not exceed 
the maximum allowable interest rate under sec-
tions 120.213 and 120.214 of title 13, Code of 
Federal Regulations, or any successor regula-
tions. 
‘‘(I) REFINANCING OF COMMUNITY ADVAN-
TAGE
PROGRAM
LOANS.—A loan guaranteed 
under the program or guaranteed under the 
Community Advantage Pilot Program of the 
Administration may be refinanced into another 
7(a) loan made by lender that does not partici-
pate in the program. 
‘‘(J) LOAN
LOSS
RESERVE
REQUIRE-
MENTS.— 
‘‘(i) LOAN
LOSS
RESERVE
ACCOUNT 
FOR COVERED INSTITUTIONS.—A covered 
institution— 
‘‘(I) with not more than 5 years 
of participation in the program shall 
maintain a loan loss reserve account 
with an amount equal to 5 percent of 
the 
outstanding 
amount 
of 
the 
unguaranteed portion of the loan 
portfolio of the covered institution 
under the program; and 
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‘‘(II) with more than 5 years of 
participation in the program shall 
maintain a loan loss reserve account 
with an amount equal to the average 
repurchase rate of the covered institu-
tion over the preceding 36-month pe-
riod. 
‘‘(ii) ADDITIONAL
LOAN
LOSS
RE-
SERVE AMOUNT FOR SELLING LOANS ON 
THE SECONDARY MARKET.—In addition to 
the amount required in the loan loss re-
serve account under clause (i), a covered 
institution that sells a program loan on the 
secondary market shall be required to 
maintain the following additional amounts 
in the loan loss reserve account: 
‘‘(I) An amount equal to 2 per-
cent of the guaranteed portion of each 
program loan sold on the secondary 
market for lenders with less than 5 
years experience selling program loans 
on the secondary market. 
‘‘(II) An amount equal to the av-
erage repurchase rate for loans sold 
by the lender on the secondary market 
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over the preceding 36 months for 
lenders with more than 5 years experi-
ence selling program loans on the sec-
ondary market. 
‘‘(iii) 
RECALCULATION.—The 
loan 
loss reserve required under clauses (i) and 
(ii) shall be recalculated on October 1 of 
each year. 
‘‘(K) TRAINING.—The Administration— 
‘‘(i) shall provide accessible upfront 
and ongoing training for covered institu-
tions making loans under the program to 
support program compliance and improve 
the interface between the covered institu-
tions and the Administration, which shall 
include— 
‘‘(I) guidance for following the 
regulations of the Administration; and 
‘‘(II) guidance specific to mis-
sion-oriented lending that is intended 
to help lenders effectively reach and 
support underserved small business 
concerns, including management and 
technical assistance delivery; 
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‘‘(ii) shall ensure that the training de-
scribed in clause (i) is provided for free or 
at a low-cost; 
‘‘(iii) may enter into a contract to 
provide the training described in clause (i) 
with an organization with expertise in 
lending under this subsection and pri-
marily 
specializing 
in 
mission-oriented 
lending, and lending to underserved mar-
kets; and 
‘‘(iv) shall provide training for the 
employees and contractors of the Adminis-
tration that regularly engage with covered 
institutions or borrowers in the program. 
‘‘(L) COMMUNITY ADVANTAGE OUTREACH 
AND EDUCATION.—The Administrator— 
‘‘(i) shall develop and implement a 
program to promote to, conduct outreach 
to, and educate prospective covered institu-
tions about the program, with a focus on 
women- and minority-owned covered insti-
tutions. 
‘‘(ii) may enter into a contract with 1 
or more nonprofit organizations experi-
enced in working with and training mission 
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driven lenders to provide the outreach and 
education described in clause (i). 
‘‘(M) COMMUNITY ADVANTAGE NETWORK 
PARTNER PARTICIPATION.— 
‘‘(i) IN GENERAL.—A covered institu-
tion that uses a Community Advantage 
Network Partner shall abide by policies 
and procedures of the Administration con-
cerning the use of Referral Agent fees per-
mitted by the Administration and disclo-
sure of those fees. 
‘‘(ii) PAYMENT
OF
FEES.—Notwith-
standing any other provision of law, all 
fees described in clause (i) shall be paid by 
the covered institution to the Community 
Advantage Network Partner upon dis-
bursement of the applicable program loan. 
‘‘(N) DELEGATED AUTHORITY.—A covered 
institution is not eligible to receive delegated 
authority from the Administration under the 
program until the covered institution has ap-
proved and fully disbursed not less than 10 
loans under the program and the Administra-
tion had evaluated the ability of the covered in-
stitution to fulfill program requirements. 
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‘‘(O) REPORTING.— 
‘‘(i) WEEKLY REPORTS.— 
‘‘(I) IN GENERAL.—The Admin-
istration shall report on the website of 
the Administration, as part of the 
weekly reports on lending approvals 
under this subsection— 
‘‘(aa) on and after the date 
of enactment of this paragraph, 
the number and dollar amount of 
loans guaranteed under the Com-
munity Advantage Pilot Program 
of the Administration; and 
‘‘(bb) on and after the date 
on which the Administration be-
gins to approve loans under the 
program, the number and dollar 
amount 
of 
loans 
guaranteed 
under the program. 
‘‘(II) SEPARATE ACCOUNTING.— 
The number and dollar amount of 
loans reported in a weekly report 
under subclause (I) for loans guaran-
teed under the Community Advantage 
Pilot Program of the Administration 
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and under the program shall include a 
breakdown by the categories of race, 
ethnicity, and gender of the owners of 
the small business concerns, by wheth-
er the small business concern is a new 
or existing small business concern, 
and by whether the small business 
concern is located in an urban or 
rural area, and broken down by— 
‘‘(aa) loans of not more than 
$50,000; 
‘‘(bb) loans of more than 
$50,000 and not more than 
$150,000; 
‘‘(cc) loans of more than 
$150,000 and not more than 
$250,000; and 
‘‘(dd) loans of more than 
$250,000 and not more than 
$350,000. 
‘‘(ii) ANNUAL REPORTS.— 
‘‘(I) IN GENERAL.—For each fis-
cal year in which the program is in ef-
fect, the Administration shall submit 
to the Committee on Small Business 
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and Entrepreneurship of the Senate 
and the Committee on Small Business 
of the House of Representatives, and 
make publicly available on the inter-
net, information about loans provided 
under the program and under the 
Community Advantage Pilot Program 
of the Administration. 
‘‘(II) CONTENTS.—Each report 
submitted and made publicly available 
under subclause (I) shall include— 
‘‘(aa) the number and dollar 
amounts of loans provided to 
small business concerns under 
the program, including a break-
down by— 
‘‘(AA) the gender of the 
owners of the small business 
concern; 
‘‘(BB) the race and 
ethnicity of the owners of 
the small business concern, 
disaggregated in a manner 
that captures all the racial 
groups 
specified 
in 
the 
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American Community Sur-
vey conducted by the Bu-
reau of the Census; 
‘‘(CC) 
whether 
the 
small business concern is lo-
cated in an urban or rural 
area; and 
‘‘(DD) 
whether 
the 
small business concern is an 
existing business or a new 
business, as provided in the 
weekly reports on lending 
approvals under this sub-
section; 
‘‘(bb) the proportion of loans 
described in item (aa) compared 
to— 
‘‘(AA) other 7(a) loans 
of any amount; 
‘‘(BB) other 7(a) loans 
of similar amounts; 
‘‘(CC) 
express 
loans 
provided under paragraph 
(31) of similar amounts; and 
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‘‘(DD) other 7(a) loans 
of similar amounts provided 
to small business concerns 
in underserved markets; 
‘‘(cc) a comparison of the 
number and dollar amounts of 
loans provided to small business 
concerns under the program and 
under each category of loans de-
scribed in item (aa), broken down 
by— 
‘‘(AA) 
loans 
of 
not 
more than $50,000; 
‘‘(BB) loans of more 
than $50,000 and not more 
than $150,000; 
‘‘(CC) loans of more 
than $150,000 and not more 
than $250,000; and 
‘‘(DD) loans of more 
than $250,000 and not more 
than $350,000; 
‘‘(dd) the number and dollar 
amounts of loans provided to 
small business concerns under 
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the program by State, and the 
jobs created or retained within 
each State; 
‘‘(ee) a list of covered insti-
tutions participating in the pro-
gram and the Community Advan-
tage Pilot Program of the Ad-
ministration, including— 
‘‘(ff) the name, location, and 
contact information, such as the 
website and telephone number, of 
each covered institution; 
‘‘(gg) a breakdown by the 
number and dollar amount of the 
loans approved for small business 
concerns; and 
‘‘(hh) the benchmarks estab-
lished by the Community Advan-
tage Working Group under sub-
paragraph (O)(i). 
‘‘(III) TIMING.—An annual re-
port 
required 
under 
this 
clause 
shall— 
‘‘(aa) 
be 
submitted 
and 
made publicly available not later 
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than December 1 of each year; 
and 
‘‘(bb) cover the lending ac-
tivity for the fiscal year that 
ended on September 30 of that 
same year. 
‘‘(P) GAO REPORT.—Not later than 5 
years after the date of enactment of this para-
graph, the Comptroller General of the United 
States shall submit to the Administrator, the 
Committee on Small Business and Entrepre-
neurship of the Senate, and the Committee on 
Small Business of the House of Representatives 
a report— 
‘‘(i) assessing— 
‘‘(I) the extent to which the pro-
gram fulfills the requirements of this 
paragraph; and 
‘‘(II) the performance of covered 
institutions participating in the pro-
gram; and 
‘‘(ii) providing recommendations on 
the administration of the program and the 
findings under subclauses (I) and (II) of 
clause (i). 
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‘‘(Q) COMMUNITY
ADVANTAGE
WORKING 
GROUP.— 
‘‘(i) IN GENERAL.—Not later than 90 
days after the date of enactment of this 
paragraph, the Administrator shall estab-
lish a Community Advantage Working 
Group, which shall— 
‘‘(I) include— 
‘‘(aa) a geographically di-
verse representation of members 
from among covered institutions 
participating in the program; and 
‘‘(bb) representatives from 
the Office of Capital Access of 
the Administration, including the 
Office of Credit Risk Manage-
ment, the Office of Financial As-
sistance, and the Office of Eco-
nomic Opportunity; 
‘‘(II) develop recommendations 
on how the Administration can effec-
tively manage, support, and promote 
the program and the mission of the 
program; 
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‘‘(III) establish metrics of suc-
cess and benchmarks that reflect the 
mission and population served by cov-
ered institutions under the program, 
which the Administration shall use to 
evaluate the performance of those cov-
ered institutions; 
‘‘(IV) establish criteria assessing 
the business support services and 
technical assistance needs of bor-
rowers and methods to assess lender 
expertise to provide necessary services 
and assistance; and 
‘‘(V) institute regular and sus-
tainable systems of communication be-
tween the Administration and covered 
institutions participating in the pro-
gram. 
‘‘(ii) REPORT.—Not later than 1 year 
after the date of enactment of this para-
graph, the Administrator shall submit to 
the Committee on Small Business and En-
trepreneurship of the Senate and the Com-
mittee on Small Business of the House of 
Representatives a report that includes— 
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‘‘(I) the recommendations of the 
Community 
Advantage 
Working 
Group established under clause (i); 
and 
‘‘(II) a recommended plan and 
timeline for implementation of those 
recommendations. 
‘‘(R) REGULATIONS.— 
‘‘(i) IN
GENERAL.—Not later than 
180 days after the date of enactment of 
this paragraph, the Administrator shall 
promulgate regulations governing the pro-
gram, including metrics for lender per-
formance, metrics of success and bench-
marks of the program, and criteria for ap-
propriate management and technical as-
sistance. 
‘‘(ii) UPDATES.—The Administrator 
shall consult the report issued under sub-
paragraph (P)(ii) and, not later than 180 
days after submission of the report, pro-
mulgate any necessary changes to existing 
regulations of the Administration based on 
the recommendations contained in the re-
port. 
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‘‘(S) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There is authorized to be appropriated 
such sums as may be necessary to conduct out-
reach and education described in subparagraph 
(L).’’. 
(b) PARTICIPATION.—Section 7(a)(2) of the Small 
Business Act (15 U.S.C. 636(a)(2)) is amended— 
(1) in subparagraph (A), in the matter pre-
ceding clause (i), by striking ‘‘and (F)’’ and insert-
ing ‘‘(F), and (G)’’; and 
(2) by adding at the end the following: 
‘‘(G) PARTICIPATION IN THE COMMUNITY 
ADVANTAGE LOAN PROGRAM.—In an agreement 
to participate in a loan on a deferred basis 
under paragraph (38), the participation by the 
Administration shall be— 
‘‘(i) 80 percent of the balance of the 
financing outstanding at the time of the 
disbursement of the loan, if that balance is 
more than $150,000 and not more than 
$350,000; or 
‘‘(ii) 90 percent of the balance of the 
financing outstanding at the time of the 
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disbursement of the loan, if that balance is 
not more than $150,000.’’. 
Æ 
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