A bill to establish a National Preferred Lender Program, facilitate the delivery of financial assistance to small businesses, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Lending Improvement 
Act of 2005''.

SEC. 2. NATIONAL PREFERRED LENDERS PROGRAM.

    Section 7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is 
amended by adding at the end the following:
                    ``(E) National preferred lenders program.--
                            ``(i) Establishment.--There is established 
                        the National Preferred Lenders Program in the 
                        Preferred Lenders Program operated by the 
                        Administration, in which a participant may 
                        operate as a preferred lender in any State if 
                        such lender meets appropriate eligibility 
                        criteria established by the Administration.
                            ``(ii) Terms and conditions.--An applicant 
                        shall be approved under the following terms and 
                        conditions:
                                    ``(I) Term.--Each participant 
                                approved under this subparagraph shall 
                                be eligible to make loans for not more 
                                than 2 years under the program 
                                established under this subparagraph.
                                    ``(II) Renewal.--At the expiration 
                                of the term described in subclause (I), 
                                the authority of a participant to make 
                                loans for the program established under 
                                this subparagraph may be renewed based 
                                on a review of performance during the 
                                previous term.
                                    ``(III) Effect of failure.--Failure 
                                to meet the criteria under this 
                                subparagraph shall not affect the 
                                eligibility of a participant to 
                                continue as a preferred lender in a 
                                State or district in which the 
                                participant is in good standing.
                            ``(iii) Implementation.--
                                    ``(I) Regulations.--As soon as is 
                                practicable, the Administrator shall 
                                promulgate regulations to implement the 
                                program established under this 
                                subparagraph.
                                    ``(II) Program implementation.--Not 
                                later than 120 days after the date of 
                                enactment of this subparagraph, the 
                                Administrator shall implement the 
                                program established under this 
                                subparagraph.''.

SEC. 3. MAXIMUM LOAN AMOUNT.

    Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 
636(a)(3)(A)) is amended by striking ``$1,500,000 (or if the gross loan 
amount would exceed $2,000,000)'' and inserting ``$2,250,000 (or if the 
gross loan amount would exceed $3,000,000)''.

SEC. 4. SECTION 7(A) AUTHORIZATION FOR FISCAL YEAR 2006.

    Section 20(e)(1)(B)(i) of the Small Business Act (15 U.S.C. 631 
note) is amended by striking ``$17,000,000,000'' and inserting 
``$18,000,000,000''.

SEC. 5. ALTERNATIVE SIZE STANDARD.

    Section 3(a)(3) of the Small Business Act (15 U.S.C. 632(a)(3)) is 
amended--
            (1) by striking ``When establishing'' and inserting the 
        following: ``Establishment of Size Standards.--
            ``(A) In general.--When establishing''; and
            (2) by adding at the end the following:
            ``(B) Alternative size standard.--
                    ``(i) In general.--Not later than 180 days after 
                the date of enactment of this subparagraph, the 
                Administrator shall establish an alternative size 
                standard under paragraph (2), that shall be applicable 
                to loan applicants under section 7(a) or under title V 
                of the Small Business Investment Act of 1958 (15 U.S.C. 
                695 et seq.).
                    ``(ii) Criteria.--The alternative size standard 
                established under clause (i) shall utilize the maximum 
                net worth and maximum net income of the prospective 
                borrower as an alternative to the use of industry 
                standards.
                    ``(iii) Interim rule.--Until the Administrator 
                establishes an alternative size standard under clause 
                (i), the Administrator shall use the alternative size 
                standard in section 121.301(b) of title 13, Code of 
                Federal Regulations, for loan applicants under section 
                7(a) or under title V of the Small Business Investment 
                Act of 1958 (15 U.S.C. 695 et seq.).''.

Summary: Small Business Lending Improvement Act of 2005 - Amends the Small Business Act to establish within the current Preferred Lenders Program operated by the Small Business Administration (SBA) the National Preferred Lenders Program, under which a participant may operate as a preferred lender in any state if the lender meets eligibility criteria established by the SBA. Allows each approved participant to make loans for up to two years under the program.

Increases: (1) to up to $3 million the maximum authorized SBA gross loan amount for small businesses; and (2) the FY2006 authorization of appropriations to the SBA for such loans.

Directs the SBA Administrator to establish an alternative size standard (measuring the size of a business for purposes of eligibility for small business loans) utilizing the maximum net worth and net income of the prospective borrower as an alternative to the use of industry standards. Requires, in the interim, the use of an alternative size standard regulation.