I 
109TH CONGRESS 
1ST SESSION H. R. 2640 
To make improvements to the microenterprise programs administered by 
the Small Business Administration. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 25, 2005 
Mr. RUSH introduced the following bill; which was referred to the Committee 
on Small Business, and in addition to the Committee on Financial Serv-
ices, for a period to be subsequently determined by the Speaker, in each 
case for consideration of such provisions as fall within the jurisdiction of 
the committee concerned 
A BILL 
To make improvements to the microenterprise programs 
administered by the Small Business Administration. 
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 ‘‘SBA Microenterprise 
Improvements Act’’. 
SEC. 2. MICROLOAN PROGRAM IMPROVEMENTS. 
(a) INTERMEDIARY ELIGIBILITY REQUIREMENTS.— 
Section 7(m)(2) of the Small Business Act (15 U.S.C. 
636(m)(2)) is amended—
(1) in subparagraph (A)—by striking ‘‘in para-
graph (10); and’’ and inserting ‘‘of the term ‘inter-
mediary’ under paragraph (11)(A);’’; and 
(2) in subparagraph (B)— 
(A) by striking ‘‘(B) has at least’’ and in-
serting the following: 
‘‘(B) has— 
‘‘(i) at least’’; and 
(B) by striking the period at the end and 
inserting the following: 
‘‘; or 
‘‘(ii) a full-time employee who has not 
less than 3 years experience making 
microloans to startup, newly established, or 
growing small business concerns; and 
‘‘(C) has at least 1 year experience pro-
viding, as an integral part of its microloan pro-
gram, intensive marketing, management, and 
technical assistance to its borrowers.’’. 
(b) CONFORMING CHANGE IN AVERAGE SMALLER 
LOAN SIZE.—Section 7(m)(3)(F)(iii) of the Small Busi-
ness Act (15 U.S.C. 636(m)(3)(F)(iii)) is amended by 
striking ‘‘$7,500’’ and inserting ‘‘$10,000’’.
(c) LIMITATION ON THIRD PARTY TECHNICAL AS-
SISTANCE.—Section 7(m)(4)(E)(ii) of the Small Business 
Act (15 U.S.C. 636(m)(4)(E)(ii)) is amended— 
(1) by striking ‘‘TECHNICAL ASSISTANCE’’ in 
the heading and inserting ‘‘THIRD PARTY TECH-
NICAL ASSISTANCE’’; and 
(2) by striking ‘‘25 percent’’ and inserting ‘‘30 
percent’’. 
(d) LOAN TERMS.—Section 7(m)(1)(B)(i) of the 
Small Business Act (15 U.S.C. 636(m)(1)(B)(i)) is 
amended by striking ‘‘short-term,’’. 
(e) REPORT ON TRANSFERRED AMOUNTS.—Section 
7(m)(9)(B) of the Small Business Act (15 U.S.C. 
636(m)(9)(B)) is amended— 
(1) by striking ‘‘The Administration’’ and in-
serting the following: 
‘‘(i) IN
GENERAL.—The Administra-
tion’’; 
(2) by striking the period after ‘‘financing’’; 
and 
(3) by adding at the end the following new 
clause: 
‘‘(ii) REPORT.—The Administration 
shall report, in its annual budget request 
and performance plan to Congress, on the
performance by the Administration of the 
requirements of clause (i).’’. 
(f) ACCURATE SUBSIDY MODEL.—Section 7(m) of 
the Small Business Act (15 U.S.C. 636(m)) is amended 
by adding at the end the following new paragraph: 
‘‘(14) IMPROVED
SUBSIDY
MODEL.—The Ad-
ministrator shall develop a subsidy model for the 
microloan program under this subsection, to be used 
in the fiscal year 2006 budget, that is more accurate 
than the subsidy model in effect on the day before 
the date of enactment of this paragraph.’’. 
(g) INCREASED FLEXIBILITY FOR PROVIDING TECH-
NICAL ASSISTANCE TO POTENTIAL BORROWERS.—Section 
7(m)(4)(E)(i) of the Small Business Act (15 U.S.C. 
636(m)(4)(E)(i)) is amended by striking ‘‘25 percent’’ and 
inserting ‘‘30 percent’’. 
SEC. 3. PRIME REAUTHORIZATION AND TRANSFER TO THE 
SMALL BUSINESS ACT. 
(a) PROGRAM REAUTHORIZATION.—Subtitle C of 
title I of the Riegle Community Development and Regu-
latory Improvement Act of 1994 (15 U.S.C. 6901 note) 
is amended to read as follows:
‘‘SEC. 37. PROGRAM FOR INVESTMENT IN MICROENTRE-
PRENEURS. 
‘‘(a) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) ADMINISTRATION.—The term ‘Administra-
tion’ means the Small Business Administration. 
‘‘(2) ADMINISTRATOR.—The term ‘Adminis-
trator’ means the Administrator of the Small Busi-
ness Administration. 
‘‘(3) CAPACITY BUILDING SERVICES.—The term 
‘capacity building services’ means services provided 
to an organization that is, or that is in the process 
of becoming, a microenterprise development organi-
zation or program, for the purpose of enhancing its 
ability to provide training and services to disadvan-
taged entrepreneurs. 
‘‘(4) 
COLLABORATIVE.—The 
term 
‘collabo-
rative’ means 2 or more nonprofit entities that agree 
to act jointly as a qualified organization under this 
section. 
‘‘(5) DISADVANTAGED
ENTREPRENEUR.—The 
term ‘disadvantaged entrepreneur’ means a micro-
entrepreneur that— 
‘‘(A) is a low-income person; 
‘‘(B) is a very low-income person; or