Title: Microloan Improvement Act of 2021
Policy area: Commerce

Summary:
Microloan Improvement Act of 2021
This bill revises the microloan program through which the Small Business Administration (SBA) provides, through designated intermediaries, certain financial assistance to small businesses.
Specifically, the bill authorizes an intermediary to offer a line of credit to a small business, and it increases the average amount for loans from an intermediary to participating small businesses that makes the intermediary eligible for a reduced interest rate on SBA loans. The bill also places limits on the repayment term for a microloan, and it prohibits the SBA from imposing any additional limitation on the term for repayment of a microloan.
Further, the SBA must (1) reserve 15% of new loan funds that are made available for disbursement as microloans to designated underutilized states and make the remaining 85% available for any state, (2) establish a process for an intermediary to provide the major credit reporting agencies with information about a borrower that is relevant to credit reporting, and (3) include information regarding equitable distribution of loan funds in its annual report.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1502 Introduced in House (IH)]

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117th CONGRESS
  1st Session
                                H. R. 1502

   To amend the Small Business Act to optimize the operations of the 
    microloan program, lower costs for small business concerns and 
   intermediary participants in the program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 2, 2021

Mr. Kim of New Jersey (for himself, Mr. Garbarino, Ms. Newman, and Mr. 
  Burchett) introduced the following bill; which was referred to the 
                      Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
   To amend the Small Business Act to optimize the operations of the 
    microloan program, lower costs for small business concerns and 
   intermediary participants in the program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Microloan Improvement Act of 2021''.

SEC. 2. INTEREST RATE FOR CERTAIN INTERMEDIARIES.

    Section 7(m)(3)(F)(iii) of the Small Business Act (15 U.S.C. 
636(m)(3)(F)(iii)) is amended by striking ``$7,500'' and inserting 
``$10,000''.

SEC. 3. LINES OF CREDIT AUTHORIZED.

     Section 7(m)(6)(A) of the Small Business Act (15 U.S.C. 
636(m)(6)(A)) is amended by inserting ``(including lines of credit)'' 
after ``fixed rate loans''.

SEC. 4. EXTENDED REPAYMENT TERMS.

    (a) In General.--Section 7(m)(6) of the Small Business Act (15 
U.S.C. 636(m)(6)) is amended by adding at the end the following:
                    ``(F) Repayment terms.--
                            ``(i) Limitation on repayments term.--The 
                        repayment term for a loan made under this 
                        paragraph shall not be more than--
                                    ``(I) in the case of a loan made by 
                                an intermediary of $10,000 or less, 7 
                                years; and
                                    ``(II) in the case of a loan made 
                                by an intermediary of greater than 
                                $10,000, 10 years.
                            ``(ii) No additional limitations.--The 
                        Administrator may not impose any additional 
                        limitation on the term for repayment of a loan 
                        made by an intermediary under this 
                        paragraph.''.
    (b) Technical Amendment.--Section 329(c) of the Economic Aid to 
Hard-Hit Small Businesses, Nonprofits, and Venues Act (Public Law 116-
260; 134 Stat. 2042 15 U.S.C. 636 note) is repealed.

SEC. 5. PROGRAM FUNDING FOR MICROLOANS.

    (a) In General.--Section 7(m) of the Small Business Act (15 U.S.C. 
636(m)) is amended--
            (1) in paragraph (7)(B)--
                    (A) by amending clause (i) to read as follows:
                            ``(i) Allocation.--Subject to the 
                        availability of appropriations and for the 
                        first 2 quarters of a fiscal year, of the total 
                        amount of new loan funds made available for 
                        award under this subsection in such fiscal 
                        year, the Administrator shall--
                                    ``(I) reserve 15 percent of such 
                                funds for award to designated 
                                underutilized States; and
                                    ``(II) make the remaining 85 
                                percent of such funds available for 
                                award in any State.''; and
                    (B) in clause (ii), by striking ``to carry out'' 
                and all that follows through the period at the end and 
                inserting the following: ``under clause (i)(I) remains 
                unexpended, the Administrator may make that portion 
                available for award in any State or designated 
                underutilized State.''; and
            (2) in paragraph (11)--
                    (A) in subparagraph (C)(ii), by striking ``and'' at 
                the end;
                    (B) in subparagraph (D), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(E) the term `State' means each of the several 
                States, the District of Columbia, the Commonwealth of 
                Puerto Rico, the United States Virgin Islands, Guam, 
                the Northern Mariana Islands, and American Samoa.''.
    (b) Rulemaking.--Not later than 180 days after the date of the 
enactment of this Act, the Administrator of the Small Business 
Administration shall issue regulations to define the term ``designated 
underutilized State'', as used in section 7(m)(7)(B) of the Small 
Business Act (15 U.S.C. 636(m)(7)(B)), as added by this section.

SEC. 6. CREDIT REPORTING INFORMATION.

    The Administrator of the Small Business Administration shall issue 
rules establishing a process under which an intermediary that makes a 
loan to a borrower under section 7(m) of the Small Business Act (15 
U.S.C. 636(m)) shall be required to provide the major credit reporting 
agencies with information about the borrower relevant to credit 
reporting, such as the borrower's payment activity on the loan.

SEC. 7. REPORT REGARDING EQUITABLE DISTRIBUTION.

    Section 7(m)(8) of the Small Business Act (15 U.S.C. 636(m)(8)) is 
amended--
            (1) by striking ``In approving'' and inserting the 
        following:
                    ``(A) In general.--In approving''; and
            (2) by adding at the end the following:
                    ``(B) Annual report.--The Administrator shall 
                include in the report submitted under paragraph (10), 
                and make publicly available on the website of the 
                Administration, information on how the Administration 
                has met the requirements of subparagraph (A).''.
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