Federal

Small Business Disaster Damage Fairness Act of 2023

Source: Congress.gov · 557 words in original text

What This Bill Does

This bill changes the rules for when the Small Business Administration can require collateral (money or property a borrower must pledge to guarantee a loan) from small businesses applying for disaster loans. The bill increases the dollar amount threshold that triggers collateral requirements and expands the types of disasters covered. ##

Who It Affects

- Small businesses applying for disaster loans from the Small Business Administration - The Comptroller General of the United States (the federal government's chief auditor) - Members of Congress on the Senate Committee on Small Business and Entrepreneurship and the House Committee on Small Business ##

Key Provisions

- The Small Business Administration must raise the minimum loan amount from $14,000 to $25,000 before it can require collateral from borrowers (Sec. 2) - The collateral requirement now applies to all "disaster" loans instead of just "major disaster" loans (Sec. 2) - The Comptroller General must report to Congress within 3 years about how well these loans perform, including how many borrowers default (fail to repay), and whether the new collateral rules affect loan performance (Sec. 3) ##

What Changes

Small business owners seeking disaster loans will not have to provide collateral unless they borrow $25,000 or more, up from the current $14,000 threshold. The rules will also apply to regular disasters, not just major disasters. ##

Important Definitions

Collateral: Money or property a borrower pledges to guarantee repayment of a loan. ##

II Calendar No. 165 118TH CONGRESS 1ST SESSION S. 943 To increase the minimum disaster loan amount for which the Small Business Administration may require collateral, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 22, 2023 Mr. KENNEDY introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship JULY 25, 2023 Reported by Mr. CARDIN, with an amendment [Strike out all after the enacting clause and insert the part printed in italic] A BILL To increase the minimum disaster loan amount for which the Small Business Administration may require collat- eral, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Small Business Dis- 4 aster Damage Fairness Act of 2023’’. 5 VerDate Sep 11 2014 04:16 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6401 E:\BILLS\S943.RS S943 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 943 RS SEC. 2. COLLATERAL REQUIREMENTS FOR DISASTER 1 LOANS. 2 Section 7(d)(6) of the Small Business Act (15 U.S.C. 3 636(d)(6)) is amended in the third proviso— 4 (1) by striking ‘‘$14,000’’ and inserting 5 ‘‘$25,000’’; and 6 (2) by striking ‘‘major disaster’’ and inserting 7 ‘‘disaster’’. 8 SECTION 1. SHORT TITLE. 9 This Act may be cited as the ‘‘Small Business Disaster 10 Damage Fairness Act of 2023’’. 11 SEC. 2. COLLATERAL REQUIREMENTS FOR DISASTER 12 LOANS. 13 Section 7(d)(6) of the Small Business Act (15 U.S.C. 14 636(d)(6)) is amended, in the third proviso— 15 (1) by striking ‘‘$14,000’’ and inserting 16 ‘‘$25,000’’; and 17 (2) by striking ‘‘major disaster’’ and inserting 18 ‘‘disaster’’. 19 SEC. 3. GAO REPORT ON DEFAULT RATES. 20 Not later than 3 years after the date of enactment of 21 this Act, the Comptroller General of the United States shall 22 submit to the Committee on Small Business and Entrepre- 23 neurship of the Senate and the Committee on Small Busi- 24 ness of the House of Representatives a report on the per- 25 formance, including the default rate, of loans made under 26 VerDate Sep 11 2014 04:16 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6203 E:\BILLS\S943.RS S943 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 943 RS section 7(b)(1) of the Small Business Act (15 U.S.C. 1 636(b)(1)), and the impact of the amendments to collateral 2 amounts made under section 2 of this Act on the perform- 3 ance of those loans, during the period— 4 (1) beginning on September 30, 2020; and 5 (2) ending on the date on that is 2 years after 6 the date of enactment of this Act. 7 VerDate Sep 11 2014 04:16 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\S943.RS S943 pbinns on DSKJLVW7X2PROD with $$_JOB Calendar No. 165 118TH CONGRESS 1ST SESSION S. 943 A BILL To increase the minimum disaster loan amount for which the Small Business Administration may re- quire collateral, and for other purposes. JULY 25, 2023 Reported with an amendment VerDate Sep 11 2014 04:16 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6651 Sfmt 6651 E:\BILLS\S943.RS S943 pbinns on DSKJLVW7X2PROD with $$_JOB

Important: This plain English summary was generated by AI and is provided for informational purposes only. It is not legal advice. Always consult the official bill text on Congress.gov or a qualified attorney for legal matters.