Topic: Domestic Commerce — Small Businesses
Subject: Commerce
Date: 2007-03-06 00:00:00

Small Business Lending Improvements Act of 2007 - Title I: 7(A) Program - (Sec. 101) Amends the Small Business Act relating to the 7(a) (business start-up loan) program to authorize the Administrator of the Small Business Administration (SBA) to offset (contribute to) borrower and lender fees associated with 7(a) loans when funds are made available to the SBA for such contributions. Requires the quarterly adjustment of any contributions made. (Sec. 102) Directs the Administrator to carry out a rural lending outreach program to provide up to an 85 percent guaranty for loans of $250,000 or less made by lenders to small businesses in rural areas. Requires the SBA to approve or decline such loan within 36 hours. (Sec. 103) Directs the Administrator to carry out a permanent Community Express Program (currently a pilot program) for loans of $250,000 or less to small businesses: (1) whose majority ownership is held by women, members of qualified Indian tribes, socially or economically disadvantaged individuals, veterans, or members of the reserves; or (2) located in a low- or moderate-income area. Requires the SBA to approve or decline such loans within 36 hours. (Sec. 104) Requires the Administrator to carry out a Medical Professionals in Designated Shortage Areas Program to provide loans to small businesses that provide medical, dental, or psychiatric services and are located in a health professional shortage area (as defined under the Public Health Service Act). Directs the SBA to guarantee 90 percent of such loan, and reduces by half the borrower and lender fees. (Sec. 105) Directs the Administrator to carry out an Increased Veteran Participation Program to small businesses whose majority ownership is held by veterans or members of the reserves. Directs the SBA to guarantee 90 percent of such loan, and eliminates the borrower and lender fees. (Sec. 106) Directs the Administrator to establish, and permit a lender making a 7(a) loan to use, an alternative size standard (such as business net worth and average net income) for determining loan eligibility. (Sec. 107) Requires the Administrator to carry out a program to provide support to regional SBA offices in assisting small business lenders who do not participate in the SBA's preferred lender program to participate in the 7(a) program. Title II: Certified Development Company Economic Development Loan Program - (Sec. 201) Amends the Small Business Investment Act of 1958 (SBIA) to designate the financing program authorized under title IV of the SBIA as the Certified Development Company Economic Development Loan Program. (Sec. 203) Provides eligibility requirements for designation as a certified development company (CDC) under the SBIA, including: (1) less than 500 employees; (2) a purpose of fostering economic development to create and preserve jobs and stimulate private investment; (3) nonprofit status; (4) in good standing with all local laws; (5) full-time professional management and staff; (6) a specific area of operations; and (7) ethical requirements, including conflict of interest standards. (Sec. 204) Defines a "rural area" for SBIA purposes as any area other than a city or town with a population greater than 50,000 and the urbanized area contiguous and adjacent to such city or town. (Sec. 205) Includes as an SBIA public policy goal the expansion of businesses in low-income communities that would be eligible for new market tax credit investments under the Internal Revenue Code. (Sec. 206) Allows the ownership interest of two or more owners to be combined to determine whether a small business is at least 51 percent owned by minorities, women, or veterans in order to qualify for assistance as a group listed in the public policy goals. (Sec. 207) Permits an SBIA borrower to refinance a limited amount of existing indebtedness that was not previously guaranteed by the SBA. (Sec. 208) Allows SBIA borrowers to provide more than the required amount of equity and to use the excess equity to reduce the amount of the first mortgage loan up to, but not less than, the amount of the SBA-guaranteed portion of the loan. (Sec. 209) Requires any CDC which does not foreclose and liquidate defaulted loans under the SBIA to contract with a qualified third party to do so. Directs the SBA to reimburse a CDC for expenses paid in connection with such foreclosure and liquidation activities if such expenses were either approved in advance or were reasonable and appropriate. (Sec. 210) Allows SBIA borrowers to include loan and debenture closing costs, other than borrower's attorney fees, in the debenture. (Sec. 211) Allows a borrower to obtain maximum SBIA financing and also obtain a 7(a) loan in the maximum amount permitted under that program. (Sec. 212) Authorizes SBIA loans for projects which: (1) reduce energy consumption by at least ten percent; or (2) increase the use of design to produce buildings that reduce the use of non-renewable resources, minimize environmental impact, and relate with the natural environment. Makes such projects eligible for the $4 million debenture under the CDC Economic Development Loan Program. (Sec. 214) Extends through FY2008 the period during which CDCs will be permitted to: (1) base their loan loss reserves on the outstanding balance of debentures; and (2) use an alternative risk-based methodology to calculate such reserves.