U.S.C Regulation

§ 634g

TITLE 15—COMMERCE AND TRADE

1976, he shall transmit to the Congress, the
President and the Administration, a full report
containing his findings and specific recommendations with respect to each of the functions referred to in section 634b of this title, including specific legislative proposals and recommendations for administration or other action.
Not later than 6 months after June 4, 1976, he
shall prepare and transmit a preliminary report
on his activities. The reports shall not be submitted to the Office of Management and Budget
or to any other Federal agency or executive department for any purpose prior to transmittal to
the Congress and the President.
(Pub. L. 94–305, title II, § 206, June 4, 1976, 90
Stat. 670.)
CODIFICATION
Section was not enacted as part of the Small Business Act which comprises this chapter.

§ 634g. Budgetary line item and authorization of
appropriations
(a) Appropriation requests
Each budget of the United States Government
submitted by the President under section 1105 of
title 31 shall include a separate statement of the
amount of appropriations requested for the Office of Advocacy of the Small Business Administration, which shall be designated in a separate
account in the General Fund of the Treasury.
(b) Administrative operations
The Administrator of the Small Business Administration shall provide the Office of Advocacy with appropriate and adequate office space
at central and field office locations, together
with such equipment, operating budget, and
communications facilities and services as may
be necessary, and shall provide necessary maintenance services for such offices and the equipment and facilities located in such offices.
(c) Authorization of appropriations
There are authorized to be appropriated such
sums as are necessary to carry out sections 634a
to 634g of this title. Any amount appropriated
under this subsection shall remain available,
without fiscal year limitation, until expended.
(Pub. L. 94–305, title II, § 207, as added Pub. L.
111–240, title I, § 1602(b), Sept. 27, 2010, 124 Stat.
2551.)
CODIFICATION
Section was not enacted as part of the Small Business Act which comprises this chapter.
PRIOR PROVISIONS
A prior section 634g, Pub. L. 94–305, title II, § 207, June
4, 1976, 90 Stat. 671, related to authorization of appropriations, prior to repeal by Pub. L. 111–240, title I,
§ 1602(b), Sept. 27, 2010, 124 Stat. 2551.

§ 635. Deposit of moneys; depositaries, custodians, and fiscal agents; contributions to employees’ compensation funds
(a) All moneys of the Administration not
otherwise employed may be deposited with the
Treasury of the United States subject to check
by authority of the Administration. The Federal
Reserve banks are authorized and directed to

Page 724

act as depositaries, custodians, and fiscal agents
for the Administration in the general performance of its powers conferred by this chapter.
Any banks insured by the Federal Deposit Insurance Corporation, when designated by the Secretary of the Treasury, shall act as custodians
and financial agents for the Administration.
Each Federal Reserve bank, when designated by
the Administrator as fiscal agent for the Administration, shall be entitled to be reimbursed for
all expenses incurred as such fiscal agent.
(b) The Administrator shall contribute to the
employees’ compensation fund, on the basis of
annual billings as determined by the Secretary
of Labor, for the benefit payments made from
such fund on account of employees engaged in
carrying out functions financed by the revolving
fund established by section 633(c) of this title.
The annual billings shall also include a statement of the fair portion of the cost of the administration of such fund, which shall be paid
by the Administrator into the Treasury as miscellaneous receipts.
(Pub. L. 85–536, § 2[6], July 18, 1958, 72 Stat. 387.)
PRIOR PROVISIONS
Prior similar provisions were contained in section 206
of act July 30, 1953, ch. 282, title II, 67 Stat. 235, which
was previously classified to this section. See Codification note set out under section 631 of this title.

§ 636. Additional powers
(a) Loans to small business concerns; allowable
purposes; qualified business; restrictions and
limitations
The Administration is empowered to the extent and in such amounts as provided in advance
in appropriation Acts to make loans for plant
acquisition, construction, conversion, or expansion, including the acquisition of land, material,
supplies, equipment, and working capital, and to
make loans to any qualified small business concern, including those owned by qualified Indian
tribes, for purposes of this chapter. Such financings may be made either directly or in cooperation with banks or other financial institutions
through agreements to participate on an immediate or deferred (guaranteed) basis. These powers shall be subject, however, to the following
restrictions, limitations, and provisions:
(1) IN GENERAL.—
(A) CREDIT ELSEWHERE.—No financial assistance shall be extended pursuant to this
subsection if the applicant can obtain credit
elsewhere. No immediate participation may
be purchased unless it is shown that a deferred participation is not available; and no
direct financing may be made unless it is
shown that a participation is not available.
(B) BACKGROUND CHECKS.—Prior to the approval of any loan made pursuant to this
subsection, or section 503 of the Small Business Investment Act of 1958 [15 U.S.C. 697],
the Administrator may verify the applicant’s criminal background, or lack thereof,
through the best available means, including,
if possible, use of the National Crime Information Center computer system at the Federal Bureau of Investigation.
(2) LEVEL OF PARTICIPATION IN GUARANTEED
LOANS.—

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TITLE 15—COMMERCE AND TRADE

(A) IN GENERAL.—Except as provided in
subparagraphs (B), (D), and (E), in an agreement to participate in a loan on a deferred
basis under this subsection (including a loan
made under the Preferred Lenders Program),
such participation by the Administration
shall be equal to—
(i) 75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance exceeds $150,000; or
(ii) 85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance is
less than or equal to $150,000.
(B) REDUCED PARTICIPATION UPON REQUEST.—
(i) IN GENERAL.—The guarantee percentage specified by subparagraph (A) for any
loan under this subsection may be reduced
upon the request of the participating lender.
(ii) PROHIBITION.—The Administration
shall not use the guarantee percentage requested by a participating lender under
clause (i) as a criterion for establishing
priorities in approving loan guarantee requests under this subsection.
(C) INTEREST RATE UNDER PREFERRED LENDERS PROGRAM.—
(i) IN GENERAL.—The maximum interest
rate for a loan guaranteed under the Preferred Lenders Program shall not exceed
the maximum interest rate, as determined
by the Administration, applicable to other
loans guaranteed under this subsection.
(ii) EXPORT-IMPORT BANK LENDERS.—Any
lender that is participating in the Delegated Authority Lender Program of the
Export-Import Bank of the United States
(or any successor to the Program) shall be
eligible to participate in the Preferred
Lenders Program.
(iii) PREFERRED LENDERS PROGRAM DEFINED.—For purposes of this subparagraph,
the term ‘‘Preferred Lenders Program’’
means any program established by the Administrator, as authorized under the proviso in section 634(b)(7) of this title, under
which a written agreement between the
lender and the Administration delegates to
the lender—
(I) complete authority to make and
close loans with a guarantee from the
Administration without obtaining the
prior specific approval of the Administration; and
(II) complete authority to service and
liquidate such loans without obtaining
the prior specific approval of the Administration for routine servicing and liquidation activities, but shall not take
any actions creating an actual or apparent conflict of interest.
(D) PARTICIPATION UNDER EXPORT WORKING
CAPITAL PROGRAM.—In an agreement to participate in a loan on a deferred basis under
the Export Working Capital Program established pursuant to paragraph (14)(A), such
participation by the Administration shall be
90 percent.

§ 636

(E) PARTICIPATION IN INTERNATIONAL TRADE
LOAN.—In an agreement to participate in a
loan on a deferred basis under paragraph
(16), the participation by the Administration
may not exceed 90 percent.
(3) No loan shall be made under this subsection—
(A) if the total amount outstanding and
committed (by participation or otherwise) to
the borrower from the business loan and investment fund established by this chapter
would exceed $3,750,000 (or if the gross loan
amount would exceed $5,000,000), except as
provided in subparagraph (B);
(B) if the total amount outstanding and
committed (on a deferred basis) solely for
the purposes provided in paragraph (16) to
the borrower from the business loan and investment fund established by this chapter
would exceed $4,500,000 (or if the gross loan
amount would exceed $5,000,000), of which
not more than $4,000,000 may be used for
working capital, supplies, or financings
under paragraph (14) for export purposes; and
(C) if effected either directly or in cooperation with banks or other lending institutions
through agreements to participate on an immediate basis if the amount would exceed
$350,000.
(4) INTEREST RATES AND PREPAYMENT
CHARGES.—
(A) INTEREST RATES.—Notwithstanding the
provisions of the constitution of any State
or the laws of any State limiting the rate or
amount of interest which may be charged,
taken, received, or reserved, the maximum
legal rate of interest on any financing made
on a deferred basis pursuant to this subsection shall not exceed a rate prescribed by
the Administration, and the rate of interest
for the Administration’s share of any direct
or immediate participation loan shall not
exceed the current average market yield on
outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average maturities
of such loans and adjusted to the nearest
one-eighth of 1 per centum, and an additional amount as determined by the Administration, but not to exceed 1 per centum per
annum: Provided, That for those loans to assist any public or private organization for
the handicapped or to assist any handicapped individual as provided in paragraph
(10) of this subsection, the interest rate shall
be 3 per centum per annum.
(B) PAYMENT OF ACCRUED INTEREST.—
(i) IN GENERAL.—Any bank or other lending institution making a claim for payment on the guaranteed portion of a loan
made under this subsection shall be paid
the accrued interest due on the loan from
the earliest date of default to the date of
payment of the claim at a rate not to exceed the rate of interest on the loan on the
date of default, minus one percent.
(ii) LOANS SOLD ON SECONDARY MARKET.—
If a loan described in clause (i) is sold on
the secondary market, the amount of interest paid to a bank or other lending in-

§ 636

TITLE 15—COMMERCE AND TRADE
stitution described in that clause from the
earliest date of default to the date of payment of the claim shall be no more than
the agreed upon rate, minus one percent.
(iii) APPLICABILITY.—Clauses (i) and (ii)
shall not apply to loans made on or after
October 1, 2000.
(C) PREPAYMENT CHARGES
(i) IN GENERAL.—A borrower who prepays
any loan guaranteed under this subsection
shall remit to the Administration a subsidy recoupment fee calculated in accordance with clause (ii) if—
(I) the loan is for a term of not less
than 15 years;
(II) the prepayment is voluntary;
(III) the amount of prepayment in any
calendar year is more than 25 percent of
the outstanding balance of the loan; and
(IV) the prepayment is made within
the first 3 years after disbursement of
the loan proceeds.
(ii) SUBSIDY RECOUPMENT FEE.—The subsidy recoupment fee charged under clause
(i) shall be—
(I) 5 percent of the amount of prepayment, if the borrower prepays during the
first year after disbursement;
(II) 3 percent of the amount of prepayment, if the borrower prepays during the
second year after disbursement; and
(III) 1 percent of the amount of prepayment, if the borrower prepays during the
third year after disbursement.

(5) No such loans including renewals and extensions thereof may be made for a period or
periods exceeding twenty-five years, except
that such portion of a loan made for the purpose of acquiring real property or constructing, converting, or expanding facilities may
have a maturity of twenty-five years plus such
additional period as is estimated may be required to complete such construction, conversion, or expansion.
(6) All loans made under this subsection
shall be of such sound value or so secured as
reasonably to assure repayment: Provided,
however, That—
(A) for loans to assist any public or private
organization or to assist any handicapped individual as provided in paragraph (10) of this
subsection any reasonable doubt shall be resolved in favor of the applicant;
(B) recognizing that greater risk may be
associated with loans for energy measures as
provided in paragraph (12) of this subsection,
factors in determining ‘‘sound value’’ shall
include, but not be limited to, quality of the
product or service; technical qualifications
of the applicant or his employees; sales projections; and the financial status of the business concern: Provided further, That such
status need not be as sound as that required
for general loans under this subsection; and 1
(C) Repealed. Pub. L. 97–35, title XIX,
§ 1910, Aug. 13, 1981, 95 Stat. 778.
On that portion of the loan used to refinance
existing indebtedness held by a bank or other

lending institution, the Administration shall
limit the amount of deferred participation to
80 per centum of the amount of the loan at the
time of disbursement: Provided further, That
any authority conferred by this subparagraph
on the Administration shall be exercised solely by the Administration and shall not be delegated to other than Administration personnel.
(7) The Administration may defer payments
on the principal of such loans for a grace period and use such other methods as it deems
necessary and appropriate to assure the successful establishment and operation of such
concern.
(8) The Administration may make loans
under this subsection to small business concerns owned and controlled by disabled veterans (as defined in section 4211(3) of title 38).
(9) The Administration may provide loans
under this subsection to finance residential or
commercial construction or rehabilitation for
sale: Provided, however, That such loans shall
not be used primarily for the acquisition of
land.
(10) The Administration may provide guaranteed loans under this subsection to assist
any public or private organization for the
handicapped or to assist any handicapped individual, including service-disabled veterans, in
establishing, acquiring, or operating a small
business concern.
(11) The Administration may provide loans
under this subsection to any small business
concern, or to any qualified person seeking to
establish such a concern when it determines
that such loan will further the policies established in section 631(c) 2 of this title, with particular emphasis on the preservation or establishment of small business concerns located in
urban or rural areas with high proportions of
unemployed or low-income individuals or
owned by low-income individuals.
(12)(A) The Administration may provide
loans under this subsection to assist any small
business concern, including start up, to enable
such concern to design architecturally or engineer, manufacture, distribute, market, install,
or service energy measures: Provided, however,
That such loan proceeds shall not be used primarily for research and development.
(b) 3 The Administration may provide deferred participation loans under this subsection to finance the planning, design, or installation of pollution control facilities for the
purposes set forth in section 404 of the Small
Business Investment Act of 1958 [15 U.S.C.
694–1]. Notwithstanding the limitation expressed in paragraph (3) of this subsection, a
loan made under this paragraph may not result in a total amount outstanding and committed to a borrower from the business loan
and investment fund of more than $1,000,000.
(13) The Administration may provide financings under this subsection to State and
local development companies for the purposes
of, and subject to the restrictions in, title V of
the Small Business Investment Act of 1958 [15
U.S.C. 695 et seq.].
2 See

1 So

in original. The ‘‘; and’’ probably should be a period.

Page 726

3 So

References in Text note below.
in original. Probably should be ‘‘(B)’’.

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TITLE 15—COMMERCE AND TRADE

(14) EXPORT WORKING CAPITAL PROGRAM.—
(A) IN GENERAL.—The Administrator may
provide extensions of credit, standby letters
of credit, revolving lines of credit for export
purposes, and other financing to enable
small business concerns, including small
business export trading companies and small
business export management companies, to
develop foreign markets. A bank or participating lending institution may establish the
rate of interest on such financings as may be
legal and reasonable.
(B) TERMS.—
(i) LOAN AMOUNT.—The Administrator
may not guarantee a loan under this paragraph of more than $5,000,000.
(ii) FEES.—
(I) IN GENERAL.—For a loan under this
paragraph, the Administrator shall collect the fee assessed under paragraph (23)
not more frequently than once each
year.
(II) UNTAPPED CREDIT.—The Administrator may not assess a fee on capital
that is not accessed by the small business concern.
(C) CONSIDERATIONS.—When considering
loan or guarantee applications, the Administration shall give weight to export-related
benefits, including opening new markets for
United States goods and services abroad and
encouraging the involvement of small businesses, including agricultural concerns, in
the export market.
(D) MARKETING.—The Administrator shall
aggressively market its export financing
program to small businesses.
(15)(A) The Administration may guarantee
loans under this subsection to qualified employee trusts with respect to a small business
concern for the purpose of purchasing stock of
the concern under a plan approved by the Administrator which, when carried out, results
in the qualified employee trust owning at
least 51 per centum of the stock of the concern.
(B) The plan requiring the Administrator’s
approval under subparagraph (A) shall be submitted to the Administration by the trustee of
such trust with its application for the guarantee. Such plan shall include an agreement
with the Administrator which is binding on
such trust and on the small business concern
and which provides that—
(i) not later than the date the loan guaranteed under subparagraph (A) is repaid (or as
soon thereafter as is consistent with the requirements of section 401(a) of title 26), at
least 51 per centum of the total stock of such
concern shall be allocated to the accounts of
at least 51 per centum of the employees of
such concern who are entitled to share in
such allocation,
(ii) there will be periodic reviews of the
role in the management of such concern of
employees to whose accounts stock is allocated, and
(iii) there will be adequate management to
assure management expertise and continuity.

§ 636

(C) In determining whether to guarantee any
loan under this paragraph, the individual business experience or personal assets of employee-owners shall not be used as criteria, except inasmuch as certain employee-owners
may assume managerial responsibilities, in
which case business experience may be considered.
(D) For purposes of this paragraph, a corporation which is controlled by any other person shall be treated as a small business concern if such corporation would, after the plan
described in subparagraph (B) is carried out,
be treated as a small business concern.
(E) The Administration shall compile a separate list of applications for assistance under
this paragraph, indicating which applications
were accepted and which were denied, and
shall report periodically to the Congress on
the status of employee-owned firms assisted
by the Administration.
(16) INTERNATIONAL TRADE.—
(A) IN GENERAL.—If the Administrator determines that a loan guaranteed under this
subsection will allow an eligible small business concern that is engaged in or adversely
affected by international trade to improve
its competitive position, the Administrator
may make such loan to assist such concern—
(i) in the financing of the acquisition,
construction, renovation, modernization,
improvement, or expansion of productive
facilities or equipment to be used in the
United States in the production of goods
and services involved in international
trade;
(ii) in the refinancing of existing indebtedness that is not structured with reasonable terms and conditions, including any
debt that qualifies for refinancing under
any other provision of this subsection; or
(iii) by providing working capital.
(B) SECURITY.—
(i) IN GENERAL.—Except as provided in
clause (ii), each loan made under this paragraph shall be secured by a first lien position or first mortgage on the property or
equipment financed by the loan or on
other assets of the small business concern.
(ii) EXCEPTION.—A loan under this paragraph may be secured by a second lien position on the property or equipment financed by the loan or on other assets of
the small business concern, if the Administrator determines the lien provides adequate assurance of the payment of the
loan.
(C) ENGAGED IN INTERNATIONAL TRADE.—
For purposes of this paragraph, a small business concern is engaged in international
trade if, as determined by the Administrator, the small business concern is in a position to expand existing export markets or
develop new export markets.
(D) ADVERSELY AFFECTED BY INTERNATIONAL TRADE.—For purposes of this paragraph, a small business concern is adversely
affected by international trade if, as determined by the Administrator, the small business concern—

§ 636

TITLE 15—COMMERCE AND TRADE
(i) is confronting increased competition
with foreign firms in the relevant market;
and
(ii) is injured by such competition.

(E) FINDINGS BY CERTAIN FEDERAL AGENCIES.—For purposes of subparagraph (D)(ii)
the Administrator shall accept any finding
of injury by the International Trade Commission or any finding of injury by the Secretary of Commerce pursuant to chapter 3 of
title II of the Trade Act of 1974 [19 U.S.C.
2341 et seq.].
(F) LIST OF EXPORT FINANCE LENDERS.—
(i) PUBLICATION OF LIST REQUIRED.—The
Administrator shall publish an annual list
of the banks and participating lending institutions that, during the 1-year period
ending on the date of publication of the
list, have made loans guaranteed by the
Administration under—
(I) this paragraph;
(II) paragraph (14); or
(III) paragraph (34).
(ii) AVAILABILITY OF LIST.—The Administrator shall—
(I) post the list published under clause
(i) on the website of the Administration;
and
(II) make the list published under
clause (i) available, upon request, at
each district office of the Administration.
(17) The Administration shall authorize
lending institutions and other entities in addition to banks to make loans authorized under
this subsection.
(18) GUARANTEE FEES.—
(A) IN GENERAL.—With respect to each loan
guaranteed under this subsection (other
than a loan that is repayable in 1 year or
less), the Administration shall collect a
guarantee fee, which shall be payable by the
participating lender, and may be charged to
the borrower, as follows:
(i) A guarantee fee not to exceed 2 percent of the deferred participation share of
a total loan amount that is not more than
$150,000.
(ii) A guarantee fee not to exceed 3 percent of the deferred participation share of
a total loan amount that is more than
$150,000, but not more than $700,000.
(iii) A guarantee fee not to exceed 3.5
percent of the deferred participation share
of a total loan amount that is more than
$700,000.
(iv) In addition to the fee under clause
(iii), a guarantee fee equal to 0.25 percent
of any portion of the deferred participation share that is more than $1,000,000.
(B) RETENTION OF CERTAIN FEES.—Lenders
participating in the programs established
under this subsection may retain not more
than 25 percent of a fee collected under subparagraph (A)(i).
(19)(A) In addition to the Preferred Lenders
Program authorized by the proviso in section
634(b)(7) of this title, the Administration is authorized to establish a Certified Lenders Pro-

Page 728

gram for lenders who establish their knowledge of Administration laws and regulations
concerning the guaranteed loan program and
their proficiency in program requirements.
The designation of a lender as a certified lender shall be suspended or revoked at any time
that the Administration determines that the
lender is not adhering to its rules and regulations or that the loss experience of the lender
is excessive as compared to other lenders, but
such suspension or revocation shall not affect
any outstanding guarantee.
(B) In order to encourage all lending institutions and other entities making loans authorized under this subsection to provide loans of
$50,000 or less in guarantees to eligible small
business loan applicants, the Administration
shall develop and allow participating lenders
to solely utilize a uniform and simplified loan
form for such loans.
(C) AUTHORITY TO LIQUIDATE LOANS.—
(i) IN GENERAL.—The Administrator may
permit lenders participating in the Certified
Lenders Program to liquidate loans made
with a guarantee from the Administration
pursuant to a liquidation plan approved by
the Administrator.
(ii) AUTOMATIC APPROVAL.—If the Administrator does not approve or deny a request for
approval of a liquidation plan within 10 business days of the date on which the request is
made (or with respect to any routine liquidation activity under such a plan, within 5
business days) such request shall be deemed
to be approved.
(20)(A) The Administration is empowered to
make loans either directly or in cooperation
with banks or other financial institutions
through agreements to participate on an immediate or deferred (guaranteed) basis to
small business concerns eligible for assistance
under subsection (j)(10) of this section and section 637(a) of this title. Such assistance may
be provided only if the Administration determines that—
(i) the type and amount of such assistance
requested by such concern is not otherwise
available on reasonable terms from other
sources;
(ii) with such assistance such concern has
a reasonable prospect for operating soundly
and profitably within a reasonable period of
time;
(iii) the proceeds of such assistance will be
used within a reasonable time for plant construction, conversion, or expansion, including the acquisition of equipment, facilities,
machinery, supplies, or material or to supply such concern with working capital to be
used in the manufacture of articles, equipment, supplies, or material for defense or civilian production or as may be necessary to
insure a well-balanced national economy;
and
(iv) such assistance is of such sound value
as reasonably to assure that the terms under
which it is provided will not be breached by
the small business concern.
(B)(i) No loan shall be made under this paragraph if the total amount outstanding and

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TITLE 15—COMMERCE AND TRADE

committed (by participation or otherwise) to
the borrower would exceed $750,000.
(ii) Subject to the provisions of clause (i), in
agreements to participate in loans on a deferred (guaranteed) basis, participation by the
Administration shall be not less than 85 per
centum of the balance of the financing outstanding at the time of disbursement.
(iii) The rate of interest on financings made
on a deferred (guaranteed) basis shall be legal
and reasonable.
(iv) Financings made pursuant to this paragraph shall be subject to the following limitations:
(I) No immediate participation may be
purchased unless it is shown that a deferred
participation is not available.
(II) No direct financing may be made unless it is shown that a participation is unavailable.
(C) A direct loan or the Administration’s
share of an immediate participation loan made
pursuant to this paragraph shall be any secured debt instrument—
(i) that is subordinated by its terms to all
other borrowings of the issuer;
(ii) the rate of interest on which shall not
exceed the current average market yield on
outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average maturities
of such loan and adjusted to the nearest oneeighth of 1 per centum;
(iii) the term of which is not more than
twenty-five years; and
(iv) the principal on which is amortized at
such rate as may be deemed appropriate by
the Administration, and the interest on
which is payable not less often than annually.
(21)(A) The Administration may make loans
on a guaranteed basis under the authority of
this subsection—
(i) to a small business concern that has
been (or can reasonably be expected to be)
detrimentally affected by—
(I) the closure (or substantial reduction)
of a Department of Defense installation; or
(II) the termination (or substantial reduction) of a Department of Defense program on which such small business was a
prime contractor or subcontractor (or supplier) at any tier; or
(ii) to a qualified individual or a veteran
seeking to establish (or acquire) and operate
a small business concern.
(B) Recognizing that greater risk may be associated with a loan to a small business concern described in subparagraph (A)(i), any reasonable doubts concerning the firm’s proposed
business plan for transition to nondefense-related markets shall be resolved in favor of the
loan applicant when making any determination regarding the sound value of the proposed
loan in accordance with paragraph (6).
(C) Loans pursuant to this paragraph shall
be authorized in such amounts as provided in
advance in appropriation Acts for the purposes
of loans under this paragraph.

§ 636

(D) For purposes of this paragraph a qualified individual is—
(i) a member of the Armed Forces of the
United States, honorably discharged from
active duty involuntarily or pursuant to a
program providing bonuses or other inducements to encourage voluntary separation or
early retirement;
(ii) a civilian employee of the Department
of Defense involuntarily separated from Federal service or retired pursuant to a program
offering inducements to encourage early retirement; or
(iii) an employee of a prime contractor,
subcontractor, or supplier at any tier of a
Department of Defense program whose employment is involuntarily terminated (or
voluntarily terminated pursuant to a program offering inducements to encourage voluntary separation or early retirement) due
to the termination (or substantial reduction) of a Department of Defense program.
(E) JOB CREATION AND COMMUNITY BENEFIT.—
In providing assistance under this paragraph,
the Administration shall develop procedures
to ensure, to the maximum extent practicable,
that such assistance is used for projects that—
(i) have the greatest potential for—
(I) creating new jobs for individuals
whose employment is involuntarily terminated due to reductions in Federal defense
expenditures; or
(II) preventing the loss of jobs by employees of small business concerns described in subparagraph (A)(i); and
(ii) have substantial potential for stimulating new economic activity in communities most affected by reductions in Federal
defense expenditures.
(22) The Administration is authorized to permit participating lenders to impose and collect a reasonable penalty fee on late payments
of loans guaranteed under this subsection in
an amount not to exceed 5 percent of the
monthly loan payment per month plus interest.
(23) YEARLY FEE.—
(A) IN GENERAL.—With respect to each loan
approved under this subsection, the Administration shall assess, collect, and retain a
fee, not to exceed 0.55 percent per year of the
outstanding balance of the deferred participation share of the loan, in an amount established once annually by the Administration
in the Administration’s annual budget request to Congress, as necessary to reduce to
zero the cost to the Administration of making guarantees under this subsection. As
used in this paragraph, the term ‘‘cost’’ has
the meaning given that term in section 661a
of title 2.
(B) PAYER.—The yearly fee assessed under
subparagraph (A) shall be payable by the
participating lender and shall not be charged
to the borrower.
(C) LOWERING OF BORROWER FEES.—If the
Administration determines that fees paid by
lenders and by small business borrowers for
guarantees under this subsection may be reduced, consistent with reducing to zero the

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TITLE 15—COMMERCE AND TRADE

cost to the Administration of making such
guarantees—
(i) the Administration shall first consider reducing fees paid by small business
borrowers under clauses (i) through (iii) of
paragraph (18)(A), to the maximum extent
possible; and
(ii) fees paid by small business borrowers
shall not be increased above the levels in
effect on December 8, 2004.
(24) NOTIFICATION REQUIREMENT.—The Administration shall notify the Committees on
Small Business of the Senate and the House of
Representatives not later than 15 days before
making any significant policy or administrative change affecting the operation of the loan
program under this subsection.
(25) LIMITATION ON CONDUCTING PILOT
PROJECTS.—
(A) IN GENERAL.—Not more than 10 percent
of the total number of loans guaranteed in
any fiscal year under this subsection may be
awarded as part of a pilot program which is
commenced by the Administrator on or after
October 1, 1996.
(B) ‘‘PILOT PROGRAM’’ DEFINED.—In this
paragraph, the term ‘pilot program’ means
any lending program initiative, project, innovation, or other activity not specifically
authorized by law.
(C) LOW DOCUMENTATION LOAN PROGRAM.—
The Administrator may carry out the low
documentation loan program for loans of
$100,000 or less only through lenders with
significant experience in making small business loans. Not later than 90 days after September 30, 1996, the Administrator shall promulgate regulations defining the experience
necessary for participation as a lender in the
low documentation loan program.
(26) CALCULATION OF SUBSIDY RATE.—All fees,
interest, and profits received and retained by
the Administration under this subsection shall
be included in the calculations made by the
Director of the Office of Management and
Budget to offset the cost (as that term is defined in section 661a of title 2) to the Administration of purchasing and guaranteeing loans
under this chapter.
(27) Repealed. Pub. L. 106–8, § 3(c), Apr. 2,
1999, 113 Stat. 16.
(28) LEASING.—In addition to such other
lease arrangements as may be authorized by
the Administration, a borrower may permanently lease to one or more tenants not more
than 20 percent of any property constructed
with the proceeds of a loan guaranteed under
this subsection, if the borrower permanently
occupies and uses not less than 60 percent of
the total business space in the property.
(29) REAL ESTATE APPRAISALS.—With respect
to a loan under this subsection that is secured
by commercial real property, an appraisal of
such property by a State licensed or certified
appraiser—
(A) shall be required by the Administration in connection with any such loan for
more than $250,000; or
(B) may be required by the Administration
or the lender in connection with any such

Page 730

loan for $250,000 or less, if such appraisal is
necessary for appropriate evaluation of creditworthiness.
(30) OWNERSHIP REQUIREMENTS.—Ownership
requirements to determine the eligibility of a
small business concern that applies for assistance under any credit program under this
chapter shall be determined without regard to
any ownership interest of a spouse arising
solely from the application of the community
property laws of a State for purposes of determining marital interests.
(31) EXPRESS LOANS.—
(A) DEFINITIONS.—As used in this paragraph:
(i) The term ‘‘express lender’’ means any
lender authorized by the Administration
to participate in the Express Loan Program.
(ii) The term ‘‘express loan’’ means any
loan made pursuant to this paragraph in
which a lender utilizes to the maximum
extent practicable its own loan analyses,
procedures, and documentation.
(iii) The term ‘‘Express Loan Program’’
means the program for express loans established by the Administration under
paragraph (25)(B), as in existence on April
5, 2004, with a guaranty rate of not more
than 50 percent.
(B) RESTRICTION TO EXPRESS LENDER.—The
authority to make an express loan shall be
limited to those lenders deemed qualified to
make such loans by the Administration.
Designation as an express lender for purposes of making an express loan shall not
prohibit such lender from taking any other
action authorized by the Administration for
that lender pursuant to this subsection.
(C) GRANDFATHERING OF EXISTING LENDERS.—Any express lender shall retain such
designation unless the Administration determines that the express lender has violated
the law or regulations promulgated by the
Administration or modifies the requirements to be an express lender and the lender
no longer satisfies those requirements.
(D) MAXIMUM LOAN AMOUNT.—The maximum loan amount under the Express Loan
Program is $350,000.
(E) OPTION TO PARTICIPATE.—Except as
otherwise provided in this paragraph, the
Administration shall take no regulatory,
policy, or administrative action, without regard to whether such action requires notification pursuant to paragraph (24), that has
the effect of requiring a lender to make an
express loan pursuant to subparagraph (D).
(F) EXPRESS LOANS FOR RENEWABLE ENERGY
AND ENERGY EFFICIENCY.—
(i) DEFINITIONS.—In this subparagraph—
(I) the term ‘‘biomass’’—
(aa) means any organic material that
is available on a renewable or recurring basis, including—
(AA) agricultural crops;
(BB) trees grown for energy production;
(CC) wood waste and wood residues;
(DD) plants (including aquatic
plants and grasses);

Page 731

TITLE 15—COMMERCE AND TRADE
(EE) residues;
(FF) fibers;
(GG) animal wastes and other
waste materials; and
(HH) fats, oils, and greases (including recycled fats, oils, and greases);
and
(bb) does not include—
(AA) paper that is commonly recycled; or
(BB) unsegregated solid waste;

(II) the term ‘‘energy efficiency
project’’ means the installation or upgrading of equipment that results in a
significant reduction in energy usage;
and
(III) the term ‘‘renewable energy system’’ means a system of energy derived
from—
(aa) a wind, solar, biomass (including
biodiesel), or geothermal source; or
(bb) hydrogen derived from biomass
or water using an energy source described in item (aa).
(ii) LOANS.—The Administrator may
make a loan under the Express Loan Program for the purpose of—
(I) purchasing a renewable energy system; or
(II) carrying out an energy efficiency
project for a small business concern.
(32) LOANS FOR ENERGY EFFICIENT TECHNOLOGIES.—
(A) DEFINITIONS.—In this paragraph—
(i) the term ‘‘cost’’ has the meaning
given that term in section 661a of title 2;
(ii) the term ‘‘covered energy efficiency
loan’’ means a loan—
(I) made under this subsection; and
(II) the proceeds of which are used to
purchase energy efficient designs, equipment, or fixtures, or to reduce the energy consumption of the borrower by 10
percent or more; and
(iii) the term ‘‘pilot program’’ means the
pilot program established under subparagraph (B) 4
(B) ESTABLISHMENT.—The Administrator
shall establish and carry out a pilot program
under which the Administrator shall reduce
the fees for covered energy efficiency loans.
(C) DURATION.—The pilot program shall
terminate at the end of the second full fiscal
year after the date that the Administrator
establishes the pilot program.
(D) MAXIMUM PARTICIPATION.—A covered
energy efficiency loan shall include the maximum participation levels by the Administrator permitted for loans made under this
subsection.
(E) FEES.—
(i) IN GENERAL.—The fee on a covered energy efficiency loan shall be equal to 50
percent of the fee otherwise applicable to
that loan under paragraph (18).
(ii) WAIVER.—The Administrator may
waive clause (i) for a fiscal year if—
4 So

in original.

§ 636

(I) for the fiscal year before that fiscal
year, the annual rate of default of covered energy efficiency loans exceeds that
of loans made under this subsection that
are not covered energy efficiency loans;
(II) the cost to the Administration of
making loans under this subsection is
greater than zero and such cost is directly attributable to the cost of making
covered energy efficiency loans; and
(III) no additional sources of revenue
authority are available to reduce the
cost of making loans under this subsection to zero.
(iii) EFFECT OF WAIVER.—If the Administrator waives the reduction of fees under
clause (ii), the Administrator—
(I) shall not assess or collect fees in an
amount greater than necessary to ensure
that the cost of the program under this
subsection is not greater than zero; and
(II) shall reinstate the fee reductions
under clause (i) when the conditions in
clause (ii) no longer apply.
(iv) NO INCREASE OF FEES.—The Administrator shall not increase the fees under
paragraph (18) on loans made under this
subsection that are not covered energy efficiency loans as a direct result of the
pilot program.
(F) GAO REPORT.—
(i) IN GENERAL.—Not later than 1 year
after the date that the pilot program terminates, the Comptroller General of the
United States shall submit to the Committee on Small Business of the House of Representatives and the Committee on Small
Business and Entrepreneurship of the Senate a report on the pilot program.
(ii) CONTENTS.—The report submitted
under clause (i) shall include—
(I) the number of covered energy efficiency loans for which fees were reduced
under the pilot program;
(II) a description of the energy efficiency savings with the pilot program;
(III) a description of the impact of the
pilot program on the program under this
subsection;
(IV) an evaluation of the efficacy and
potential fraud and abuse of the pilot
program; and
(V) recommendations for improving
the pilot program.
(33) INCREASED VETERAN PARTICIPATION PROGRAM.—
(A) DEFINITIONS.—In this paragraph—
(i) the term ‘‘cost’’ has the meaning
given that term in section 661a of title 2;
(ii) the term ‘‘pilot program’’ means the
pilot program established under subparagraph (B); and
(iii) the term ‘‘veteran participation
loan’’ means a loan made under this subsection to a small business concern owned
and controlled by veterans of the Armed
Forces or members of the reserve components of the Armed Forces.
(B) ESTABLISHMENT.—The Administrator
shall establish and carry out a pilot program

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TITLE 15—COMMERCE AND TRADE

under which the Administrator shall reduce
the fees for veteran participation loans.
(C) DURATION.—The pilot program shall
terminate at the end of the second full fiscal
year after the date that the Administrator
establishes the pilot program.
(D) MAXIMUM PARTICIPATION.—A veteran
participation loan shall include the maximum participation levels by the Administrator permitted for loans made under this
subsection.
(E) FEES.—
(i) IN GENERAL.—The fee on a veteran
participation loan shall be equal to 50 percent of the fee otherwise applicable to that
loan under paragraph (18).
(ii) WAIVER.—The Administrator may
waive clause (i) for a fiscal year if—
(I) for the fiscal year before that fiscal
year, the annual estimated rate of default of veteran participation loans exceeds that of loans made under this subsection that are not veteran participation loans;
(II) the cost to the Administration of
making loans under this subsection is
greater than zero and such cost is directly attributable to the cost of making
veteran participation loans; and
(III) no additional sources of revenue
authority are available to reduce the
cost of making loans under this subsection to zero.
(iii) EFFECT OF WAIVER.—If the Administrator waives the reduction of fees under
clause (ii), the Administrator—
(I) shall not assess or collect fees in an
amount greater than necessary to ensure
that the cost of the program under this
subsection is not greater than zero; and
(II) shall reinstate the fee reductions
under clause (i) when the conditions in
clause (ii) no longer apply.
(iv) NO INCREASE OF FEES.—The Administrator shall not increase the fees under
paragraph (18) on loans made under this
subsection that are not veteran participation loans as a direct result of the pilot
program.
(F) GAO REPORT.—
(i) IN GENERAL.—Not later than 1 year
after the date that the pilot program terminates, the Comptroller General of the
United States shall submit to the Committee on Small Business of the House of Representatives and the Committee on Small
Business and Entrepreneurship of the Senate a report on the pilot program.
(ii) CONTENTS.—The report submitted
under clause (i) shall include—
(I) the number of veteran participation
loans for which fees were reduced under
the pilot program;
(II) a description of the impact of the
pilot program on the program under this
subsection;
(III) an evaluation of the efficacy and
potential fraud and abuse of the pilot
program; and
(IV) recommendations for improving
the pilot program.

Page 732

(34) FLOOR PLAN FINANCING PROGRAM.—
(A) DEFINITION.—In this paragraph, the
term ‘‘eligible retail good’’—
(i) means a good for which a title may be
obtained under State law; and
(ii) includes an automobile, recreational
vehicle, boat, and manufactured home.
(B) PROGRAM.—The Administrator may
guarantee the timely payment of an openend extension of credit to a small business
concern, the proceeds of which may be used
for the purchase of eligible retail goods for
resale.
(C) AMOUNT.—An open-end extension of
credit guaranteed under this paragraph shall
be in an amount not less than $500,000 and
not more than $5,000,000.
(D) TERM.—An open-end extension of credit guaranteed under this paragraph shall
have a term of not more than 5 years.
(E) GUARANTEE PERCENTAGE.—The Administrator may guarantee—
(i) not less than 60 percent of an openend extension of credit under this paragraph; and
(ii) not more than 75 percent of an openend extension of credit under this paragraph.
(F) ADVANCE RATE.—The lender for an
open-end extension of credit guaranteed
under this paragraph may allow the borrower to draw funds on the line of credit in
an amount equal to not more than 100 percent of the value of the eligible retail goods
to be purchased.
(35) EXPORT EXPRESS PROGRAM.—
(A) DEFINITIONS.—In this paragraph—
(i) the term ‘‘export development activity’’ includes—
(I) obtaining a standby letter of credit
when required as a bid bond, performance bond, or advance payment guarantee;
(II) participation in a trade show that
takes place outside the United States;
(III) translation of product brochures
or catalogues for use in markets outside
the United States;
(IV) obtaining a general line of credit
for export purposes;
(V) performing a service contract from
buyers located outside the United
States;
(VI) obtaining transaction-specific financing associated with completing export orders;
(VII) purchasing real estate or equipment to be used in the production of
goods or services for export;
(VIII) providing term loans or other financing to enable a small business concern, including an export trading company and an export management company, to develop a market outside the
United States; and
(IX) acquiring, constructing, renovating, modernizing, improving, or expanding a production facility or equipment to
be used in the United States in the production of goods or services for export;
and

Page 733

TITLE 15—COMMERCE AND TRADE

(ii) the term ‘‘express loan’’ means a
loan in which a lender uses to the maximum extent practicable the loan analyses,
procedures, and documentation of the
lender to provide expedited processing of
the loan application.
(B) AUTHORITY.—The Administrator may
guarantee the timely payment of an express
loan to a small business concern made for an
export development activity.
(C) LEVEL OF PARTICIPATION.—
(i) MAXIMUM AMOUNT.—The maximum
amount of an express loan guaranteed
under this paragraph shall be $500,000.
(ii) PERCENTAGE.—For an express loan
guaranteed under this paragraph, the Administrator shall guarantee—
(I) 90 percent of a loan that is not more
than $350,000; and
(II) 75 percent of a loan that is more
than $350,000 and not more than $500,000.
(b) Disaster loans; authorization, scope, terms
and conditions, etc.
Except as to agricultural enterprises as defined in section 647(b)(1) of this title, the Administration also is empowered to the extent and in
such amounts as provided in advance in appropriation Acts—
(1)(A) to make such loans (either directly or
in cooperation with banks or other lending institutions through agreements to participate
on an immediate or deferred (guaranteed)
basis) as the Administration may determine to
be necessary or appropriate to repair, rehabilitate or replace property, real or personal,
damaged or destroyed by or as a result of natural or other disasters: Provided, That such
damage or destruction is not compensated for
by insurance or otherwise: And provided further, That the Administration may increase
the amount of the loan by up to an additional
20 per centum of the aggregate costs of such
damage or destruction (whether or not compensated for by insurance or otherwise) if it
determines such increase to be necessary or
appropriate in order to protect the damaged or
destroyed property from possible future disasters by taking mitigating measures, including,
but not limited to, construction of retaining
walls and sea walls, grading and contouring
land, relocating utilities and modifying structures;
(B) to refinance any mortgage or other lien
against a totally destroyed or substantially
damaged home or business concern: Provided,
That no loan or guarantee shall be extended
unless the Administration finds that (i) the
applicant is not able to obtain credit elsewhere; (ii) such property is to be repaired, rehabilitated, or replaced; (iii) the amount refinanced shall not exceed the amount of physical loss sustained; and (iv) such amounts
shall be reduced to the extent such mortgage
or lien is satisfied by insurance or otherwise;
and
(C) during fiscal years 2000 through 2004, to
establish a predisaster mitigation program to
make such loans (either directly or in cooperation with banks or other lending institutions
through agreements to participate on an im-

§ 636

mediate or deferred (guaranteed) basis), as the
Administrator may determine to be necessary
or appropriate, to enable small businesses to
use mitigation techniques in support of a formal mitigation program established by the
Federal Emergency Management Agency, except that no loan or guarantee may be extended to a small business under this subparagraph unless the Administration finds that the
small business is otherwise unable to obtain
credit for the purposes described in this subparagraph;
(2) to make such loans (either directly or in
cooperation with banks or other lending institutions through agreements to participate on
an immediate or deferred (guaranteed) basis)
as the Administration may determine to be
necessary or appropriate to any small business
concern, private nonprofit organization, or
small agricultural cooperative located in an
area affected by a disaster,5 (including
drought), with respect to both farm-related
and nonfarm-related small business concerns,
if the Administration determines that the concern, the organization, or the cooperative has
suffered a substantial economic injury as a result of such disaster and if such disaster constitutes—
(A) a major disaster, as determined by the
President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5121 et seq.); or
(B) a natural disaster, as determined by
the Secretary of Agriculture pursuant to
section 1961 of title 7, in which case, assistance under this paragraph may be provided
to farm-related and nonfarm-related small
business concerns, subject to the other applicable requirements of this paragraph; or
(C) a disaster, as determined by the Administrator of the Small Business Administration; or
(D) if no disaster declaration has been issued pursuant to subparagraph (A), (B), or
(C), the Governor of a State in which a disaster has occurred may certify to the Small
Business Administration that small business
concerns, private nonprofit organizations, or
small agricultural cooperatives (1) have suffered economic injury as a result of such disaster, and (2) are in need of financial assistance which is not available on reasonable
terms in the disaster stricken area. Not
later than 30 days after the date of receipt of
such certification by a Governor of a State,
the Administration shall respond in writing
to that Governor on its determination and
the reasons therefore,6 and may then make
such loans as would have been available
under this paragraph if a disaster declaration had been issued.
Provided, That no loan or guarantee shall be
extended pursuant to this paragraph (2) unless
the Administration finds that the applicant is
not able to obtain credit elsewhere.
(3)(A) In this paragraph—
(i) the term ‘‘essential employee’’ means
an individual who is employed by a small
5 So
6 So

in original. The comma probably should not appear.
in original. Probably should be ‘‘therefor,’’.

§ 636

TITLE 15—COMMERCE AND TRADE

business concern and whose managerial or
technical expertise is critical to the successful day-to-day operations of that small business concern;
(ii) the term ‘‘period of military conflict’’
has the meaning given the term in subsection (n)(1) of this section; and
(iii) the term ‘‘substantial economic injury’’ means an economic harm to a business
concern that results in the inability of the
business concern—
(I) to meet its obligations as they mature;
(II) to pay its ordinary and necessary operating expenses; or
(III) to market, produce, or provide a
product or service ordinarily marketed,
produced, or provided by the business concern.
(B) The Administration may make such disaster loans (either directly or in cooperation
with banks or other lending institutions
through agreements to participate on an immediate or deferred basis) to assist a small
business concern that has suffered or that is
likely to suffer substantial economic injury as
the result of an essential employee of such
small business concern being ordered to active
military duty during a period of military conflict.
(C) A small business concern described in
subparagraph (B) shall be eligible to apply for
assistance under this paragraph during the period beginning on the date on which the essential employee is ordered to active duty and
ending on the date that is 1 year after the date
on which such essential employee is discharged or released from active duty. The Administrator may, when appropriate (as determined by the Administrator), extend the ending date specified in the preceding sentence by
not more than 1 year.
(D) Any loan or guarantee extended pursuant to this paragraph shall be made at the
same interest rate as economic injury loans
under paragraph (2).
(E) No loan may be made under this paragraph, either directly or in cooperation with
banks or other lending institutions through
agreements to participate on an immediate or
deferred basis, if the total amount outstanding
and committed to the borrower under this subsection would exceed $1,500,000, unless such applicant constitutes, or have 7 become due to
changed economic circumstances, a major
source of employment in its surrounding area,
as determined by the Administration, in which
case the Administration, in its discretion,
may waive the $1,500,000 limitation.
(F) For purposes of assistance under this
paragraph, no declaration of a disaster area
shall be required.
(G)(i) Notwithstanding any other provision
of law, the Administrator may make a loan
under this paragraph of not more than $50,000
without collateral.
(ii) The Administrator may defer payment of
principal and interest on a loan described in
clause (i) during the longer of—
7 So

in original. Probably should be ‘‘has’’.

Page 734

(I) the 1-year period beginning on the date
of the initial disbursement of the loan; and
(II) the period during which the relevant
essential employee is on active duty.
(H) The Administrator shall give priority to
any application for a loan under this paragraph and shall process and make a determination regarding such applications prior to
processing or making a determination on
other loan applications under this subsection,
on a rolling basis.
(4) COORDINATION WITH FEMA.—
(A) IN GENERAL.—Notwithstanding any
other provision of law, for any disaster declared under this subsection or major disaster (including any major disaster relating to
which the Administrator declares eligibility
for additional disaster assistance under
paragraph (9)), the Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, shall
ensure, to the maximum extent practicable,
that all application periods for disaster relief under this chapter correspond with application deadlines established under the
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.),
or as extended by the President.
(B)
DEADLINES.—Notwithstanding
any
other provision of law, not later than 10 days
before the closing date of an application period for a major disaster (including any
major disaster relating to which the Administrator declares eligibility for additional
disaster assistance under paragraph (9)), the
Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on
Small Business of the House of Representatives a report that includes—
(i) the deadline for submitting applications for assistance under this chapter relating to that major disaster;
(ii) information regarding the number of
loan applications and disbursements processed by the Administrator relating to
that major disaster for each day during
the period beginning on the date on which
that major disaster was declared and ending on the date of that report; and
(iii) an estimate of the number of potential applicants that have not submitted an
application relating to that major disaster.
(5) PUBLIC AWARENESS OF DISASTERS.—If a
disaster is declared under this subsection or
the Administrator declares eligibility for additional disaster assistance under paragraph (9),
the Administrator shall make every effort to
communicate through radio, television, print,
and web-based outlets, all relevant information needed by disaster loan applicants, including—
(A) the date of such declaration;
(B) cities and towns within the area of
such declaration;
(C) loan application deadlines related to
such disaster;

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TITLE 15—COMMERCE AND TRADE

(D) all relevant contact information for
victim services available through the Administration (including links to small business development center websites);
(E) links to relevant Federal and State disaster assistance websites, including links to
websites providing information regarding assistance available from the Federal Emergency Management Agency;
(F) information on eligibility criteria for
Administration loan programs, including
where such applications can be found; and
(G) application materials that clearly
state the function of the Administration as
the Federal source of disaster loans for
homeowners and renters.
(6) AUTHORITY FOR QUALIFIED PRIVATE CONTRACTORS.—
(A) DISASTER LOAN PROCESSING.—The Administrator may enter into an agreement
with a qualified private contractor, as determined by the Administrator, to process
loans under this subsection in the event of a
major disaster (including any major disaster
relating to which the Administrator declares
eligibility for additional disaster assistance
under paragraph (9)), under which the Administrator shall pay the contractor a fee
for each loan processed.
(B) LOAN LOSS VERIFICATION SERVICES.—
The Administrator may enter into an agreement with a qualified lender or loss verification professional, as determined by the Administrator, to verify losses for loans under
this subsection in the event of a major disaster (including any major disaster relating to
which the Administrator declares eligibility
for additional disaster assistance under
paragraph (9)), under which the Administrator shall pay the lender or verification
professional a fee for each loan for which
such lender or verification professional verifies losses.
(7) DISASTER ASSISTANCE EMPLOYEES.—
(A) IN GENERAL.—In carrying out this section, the Administrator may, where practicable, ensure that the number of full-time
equivalent employees—
(i) in the Office of the Disaster Assistance is not fewer than 800; and
(ii) in the Disaster Cadre of the Administration is not fewer than 1,000.
(B) REPORT.—In carrying out this subsection, if the number of full-time employees
for either the Office of Disaster Assistance
or the Disaster Cadre of the Administration
is below the level described in subparagraph
(A) for that office, not later than 21 days
after the date on which that staffing level
decreased below the level described in subparagraph (A), the Administrator shall submit to the Committee on Appropriations and
the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Appropriations and Committee on
Small Business of the House of Representatives, a report—
(i) detailing staffing levels on that date;
(ii) requesting, if practicable and determined appropriate by the Administrator,

§ 636

additional funds for additional employees;
and
(iii) containing such additional information, as determined appropriate by the Administrator.
(8) INCREASED LOAN CAPS.—
(A) AGGREGATE LOAN AMOUNTS.—Except as
provided in subparagraph (B), and notwithstanding any other provision of law, the aggregate loan amount outstanding and committed to a borrower under this subsection
may not exceed $2,000,000.
(B) WAIVER AUTHORITY.—The Administrator may, at the discretion of the Administrator, increase the aggregate loan amount
under subparagraph (A) for loans relating to
a disaster to a level established by the Administrator, based on appropriate economic
indicators for the region in which that disaster occurred.
(9) DECLARATION OF ELIGIBILITY FOR ADDITIONAL DISASTER ASSISTANCE.—
(A) IN GENERAL.—If the President declares
a major disaster, the Administrator may declare eligibility for additional disaster assistance in accordance with this paragraph.
(B) THRESHOLD.—A major disaster for
which the Administrator declares eligibility
for additional disaster assistance under this
paragraph shall—
(i) have resulted in extraordinary levels
of casualties or damage or disruption severely affecting the population (including
mass evacuations), infrastructure, environment, economy, national morale, or
government functions in an area;
(ii) be comparable to the description of a
catastrophic incident in the National Response Plan of the Administration, or any
successor thereto, unless there is no successor to such plan, in which case this
clause shall have no force or effect; and
(iii) be of such size and scope that—
(I) the disaster assistance programs
under the other paragraphs under this
subsection are incapable of providing
adequate and timely assistance to individuals or business concerns located
within the disaster area; or
(II) a significant number of business
concerns outside the disaster area have
suffered disaster-related substantial economic injury as a result of the incident.
(C) ADDITIONAL ECONOMIC INJURY DISASTER
LOAN ASSISTANCE.—
(i) IN GENERAL.—If the Administrator declares eligibility for additional disaster assistance under this paragraph, the Administrator may make such loans under this
subparagraph (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as
the Administrator determines appropriate
to eligible small business concerns located
anywhere in the United States.
(ii) PROCESSING TIME.—
(I) IN GENERAL.—If the Administrator
determines that the average processing
time for applications for disaster loans

§ 636

TITLE 15—COMMERCE AND TRADE
under this subparagraph relating to a
specific major disaster is more than 15
days, the Administrator shall give priority to the processing of such applications
submitted by eligible small business concerns located inside the disaster area,
until the Administrator determines that
the average processing time for such applications is not more than 15 days.
(II) SUSPENSION OF APPLICATIONS FROM
OUTSIDE DISASTER AREA.—If the Administrator determines that the average processing time for applications for disaster
loans under this subparagraph relating
to a specific major disaster is more than
30 days, the Administrator shall suspend
the processing of such applications submitted by eligible small business concerns located outside the disaster area,
until the Administrator determines that
the average processing time for such applications is not more than 15 days.
(iii) LOAN TERMS.—A loan under this subparagraph shall be made on the same
terms as a loan under paragraph (2).
(D) DEFINITIONS.—In this paragraph—
(i) the term ‘‘disaster area’’ means the
area for which the applicable major disaster was declared;
(ii) the term ‘‘disaster-related substantial economic injury’’ means economic
harm to a business concern that results in
the inability of the business concern to—
(I) meet its obligations as it matures;
(II) meet its ordinary and necessary
operating expenses; or
(III) market, produce, or provide a
product or service ordinarily marketed,
produced, or provided by the business
concern because the business concern relies on materials from the disaster area
or sells or markets in the disaster area;
and
(iii) the term ‘‘eligible small business
concern’’ means a small business concern—
(I) that has suffered disaster-related
substantial economic injury as a result
of the applicable major disaster; and
(II)(aa) for which not less than 25 percent of the market share of that small
business concern is from business transacted in the disaster area;
(bb) for which not less than 25 percent
of an input into a production process of
that small business concern is from the
disaster area; or
(cc) that relies on a provider located in
the disaster area for a service that is not
readily available elsewhere.

No loan under this subsection, including renewals and extensions thereof, may be made for
a period or periods exceeding thirty years: Provided, That the Administrator may consent to a
suspension in the payment of principal and interest charges on, and to an extension in the
maturity of, the Federal share of any loan under
this subsection for a period not to exceed five
years, if (A) the borrower under such loan is a

Page 736

homeowner or a small business concern, (B) the
loan was made to enable (i) such homeowner to
repair or replace his home, or (ii) such concern
to repair or replace plant or equipment which
was damaged or destroyed as the result of a disaster meeting the requirements of clause (A) or
(B) of paragraph (2) of this subsection, and (C)
the Administrator determines such action is
necessary to avoid severe financial hardship:
Provided further, That the provisions of paragraph (1) of subsection (d) of this section shall
not be applicable to any such loan having a maturity in excess of twenty years. Notwithstanding any other provision of law, and except as
provided in subsection (d), the interest rate on
the Administration’s share of any loan made
under subsection (b) shall not exceed the average annual interest rate on all interest-bearing
obligations of the United States then forming a
part of the public debt as computed at the end
of the fiscal year next preceding the date of the
loan and adjusted to the nearest one-eighth of 1
per centum plus one-quarter of 1 per centum:
Provided, however, That the interest rate for
loans made under paragraphs (1) and (2) hereof
shall not exceed the rate of interest which is in
effect at the time of the occurrence of the disaster. In agreements to participate in loans on a
deferred basis under this subsection, such participation by the Administration shall not be in
excess of 90 per centum of the balance of the
loan outstanding at the time of disbursement.
Notwithstanding any other provision of law, the
interest rate on the Administration’s share of
any loan made pursuant to paragraph (1) of this
subsection to repair or replace a primary residence and/or replace or repair damaged or destroyed personal property, less the amount of
compensation by insurance or otherwise, with
respect to a disaster occurring on or after July
1, 1976, and prior to October 1, 1978, shall be: 1
per centum on the amount of such loan not exceeding $10,000, and 3 per centum on the amount
of such loan over $10,000 but not exceeding
$40,000. The interest rate on the Administration’s share of the first $250,000 of all other loans
made pursuant to paragraph (1) of this subsection, with respect to a disaster occurring on
or after July 1, 1976, and prior to October 1, 1978,
shall be 3 per centum. All repayments of principal on the Administration’s share of any loan
made under the above provisions shall first be
applied to reduce the principal sum of such loan
which bears interest at the lower rates provided
in this paragraph. The principal amount of any
loan made pursuant to paragraph (1) in connection with a disaster which occurs on or after
April 1, 1977, but prior to January 1, 1978, may be
increased by such amount, but not more than
$2,000, as the Administration determines to be
reasonable in light of the amount and nature of
loss, damage, or injury sustained in order to finance the installation of insulation in the property which was lost, damaged, or injured, if the
uninsured, damaged portion of the property is 10
per centum or more of the market value of the
property at the time of the disaster. Not later
than June 1, 1978, the Administration shall prepare and transmit to the Select Committee on
Small Business of the Senate, the Committee on
Small Business of the House of Representatives,

Page 737

TITLE 15—COMMERCE AND TRADE

and the Committees of the Senate and House of
Representatives having jurisdiction over measures relating to energy conservation, a report on
its activities under this paragraph, including
therein an evaluation of the effect of such activities on encouraging the installation of insulation in property which is repaired or replaced
after a disaster which is subject to this paragraph, and its recommendations with respect to
the continuation, modification, or termination
of such activities.
In the administration of the disaster loan program under paragraphs (1) and (2) of this subsection, in the case of property loss or damage
or injury resulting from a major disaster as determined by the President or a disaster as determined by the Administrator which occurs on or
after January 1, 1971, and prior to July 1, 1973,
the Small Business Administration, to the extent such loss or damage or injury is not compensated for by insurance or otherwise—
(A) may make any loan for repair, rehabilitation, or replacement of property damaged or
destroyed without regard to whether the required financial assistance is otherwise available from private sources;
(B) may, in the case of the total destruction
or substantial property damage of a home or
business concern, refinance any mortgage or
other liens outstanding against the destroyed
or damaged property if such property is to be
repaired, rehabilitated, or replaced, except
that (1) in the case of a business concern, the
amount refinanced shall not exceed the
amount of the physical loss sustained, and (2)
in the case of a home, the amount of each
monthly payment of principal and interest on
the loan after refinancing under this clause
shall not be less than the amount of each such
payment made prior to such refinancing;
(C) may, in the case of a loan made under
clause (A) or a mortgage or other lien refinanced under clause (B) in connection with
the destruction of, or substantial damage to,
property owned and used as a residence by an
individual who by reason of retirement, disability, or other similar circumstances relies
for support on survivor, disability, or retirement benefits under a pension, insurance, or
other programs, consent to the suspension of
the payments of the principal of that loan,
mortgage, or lien during the lifetime of that
individual and his spouse for so long as the Administration determines that making such
payments would constitute a substantial hardship;
(D) shall notwithstanding the provisions of
any other law and upon presentation by the
applicant of proof of loss or damage or injury
and a bona fide estimate of cost of repair, rehabilitation, or replacement, cancel the principal of any loan made to cover a loss or damage or injury resulting from such disaster, except that—
(i) with respect to a loan made in connection with a disaster occurring on or after
January 1, 1971 but prior to January 1, 1972,
the total amount so canceled shall not exceed $2,500, and the interest on the balance
of the loan shall be at a rate of 3 per centum
per annum; and

§ 636

(ii) with respect to a loan made in connection with a disaster occurring on or after
January 1, 1972 but prior to July 1, 1973, the
total amount so canceled shall not exceed
$5,000 and the interest on the balance of the
loan shall be at a rate of 1 percentum per
annum.
(E) 8 A State grant made on or prior to July
1, 1979, shall not be considered compensation
for the purpose of applying the provisions of
section 312(a) of the Disaster Relief and Emergency Assistance Act [42 U.S.C. 5155(a)] to a
disaster loan under paragraph (1) (2) 9 of this
subsection.
With respect to any loan referred to in clause
(D) which is outstanding on August 16, 1972, the
Administrator shall—
(i) make such change in the interest rate on
the balance of such loan as is required under
that clause effective as of August 16, 1972; and
(ii) in applying the limitation set forth in
that clause with respect to the total amount
of such loan which may be canceled, consider
as part of the amount so canceled any part of
such loan which was previously canceled pursuant to section 231 of the Disaster Relief Act
of 1970 [15 U.S.C. 636a].
Whoever wrongfully misapplies the proceeds of
a loan obtained under this subsection shall be
civilly liable to the Administrator in an amount
equal to one-and-one half times the original
principal amount of the loan.
(c) Private disaster loans
(1) Definitions
In this subsection—
(A) the term ‘‘disaster area’’ means any
area for which the President declared a
major disaster relating to which the Administrator declares eligibility for additional
disaster assistance under subsection (b)(9),
during the period of that major disaster declaration;
(B) the term ‘‘eligible individual’’ means
an individual who is eligible for disaster assistance under subsection (b)(1) relating to a
major disaster relating to which the Administrator declares eligibility for additional
disaster assistance under subsection (b)(9);
(C) the term ‘‘eligible small business concern’’ means a business concern that is—
(i) a small business concern, as defined
under this chapter; or
(ii) a small business concern, as defined
in section 103 of the Small Business Investment Act of 1958 [15 U.S.C. 662];
(D) the term ‘‘preferred lender’’ means a
lender participating in the Preferred Lender
Program;
(E) the term ‘‘Preferred Lender Program’’
has the meaning given that term in subsection (a)(2)(C)(ii); and
(F) the term ‘‘qualified private lender’’
means any privately-owned bank or other
lending institution that—
(i) is not a preferred lender; and
8 See
9 So

1980 Amendment note below.
in original. Probably should be ‘‘or (2)’’.

§ 636

TITLE 15—COMMERCE AND TRADE

(ii) the Administrator determines meets
the criteria established under paragraph
(10).
(2) Program required
The Administrator shall carry out a program, to be known as the Private Disaster Assistance program, under which the Administration may guarantee timely payment of
principal and interest, as scheduled, on any
loan made to an eligible small business concern located in a disaster area and to an eligible individual.
(3) Use of loans
A loan guaranteed by the Administrator
under this subsection may be used for any purpose authorized under subsection (b).
(4) Online applications
(A) Establishment
The Administrator may establish, directly
or through an agreement with another entity, an online application process for loans
guaranteed under this subsection.
(B) Other Federal assistance
The Administrator may coordinate with
the head of any other appropriate Federal
agency so that any application submitted
through an online application process established under this paragraph may be considered for any other Federal assistance program for disaster relief.
(C) Consultation
In establishing an online application process under this paragraph, the Administrator
shall consult with appropriate persons from
the public and private sectors, including private lenders.
(5) Maximum amounts
(A) Guarantee percentage
The Administrator may guarantee not
more than 85 percent of a loan under this
subsection.
(B) Loan amount
The maximum amount of a loan guaranteed under this subsection shall be $2,000,000.
(6) Terms and conditions
A loan guaranteed under this subsection
shall be made under the same terms and conditions as a loan under subsection (b).
(7) Lenders
(A) In general
A loan guaranteed under this subsection
made to—
(i) a qualified individual may be made by
a preferred lender; and
(ii) a qualified small business concern
may be made by a qualified private lender
or by a preferred lender that also makes
loans to qualified individuals.
(B) Compliance
If the Administrator determines that a
preferred lender knowingly failed to comply
with the underwriting standards for loans
guaranteed under this subsection or violated

Page 738

the terms of the standard operating procedure agreement between that preferred lender and the Administration, the Administrator shall do 1 or more of the following:
(i) Exclude the preferred lender from participating in the program under this subsection.
(ii) Exclude the preferred lender from
participating in the Preferred Lender Program for a period of not more than 5 years.
(8) Fees
(A) In general
The Administrator may not collect a guarantee fee under this subsection.
(B) Origination fee
The Administrator may pay a qualified
private lender or preferred lender an origination fee for a loan guaranteed under this
subsection in an amount agreed upon in advance between the qualified private lender
or preferred lender and the Administrator.
(9) Documentation
A qualified private lender or preferred lender
may use its own loan documentation for a loan
guaranteed by the Administrator under this
subsection, to the extent authorized by the
Administrator. The ability of a lender to use
its own loan documentation for a loan guaranteed under this subsection shall not be considered part of the criteria for becoming a qualified private lender under the regulations promulgated under paragraph (10).
(10) Implementation regulations
(A) In general
Not later than 1 year after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008,
the Administrator shall issue final regulations establishing permanent criteria for
qualified private lenders.
(B) Report to Congress
Not later than 6 months after the date of
enactment of the Small Business Disaster
Response and Loan Improvements Act of
2008, the Administrator shall submit a report
on the progress of the regulations required
by subparagraph (A) to the Committee on
Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of Representatives.
(11) Authorization of appropriations
(A) In general
Amounts necessary to carry out this subsection shall be made available from
amounts appropriated to the Administration
to carry out subsection (b).
(B) Authority to reduce interest rates and
other terms and conditions
Funds appropriated to the Administration
to carry out this subsection,5 may be used by
the Administrator to meet the loan terms
and conditions specified in paragraph (6).
(12) Purchase of loans
The Administrator may enter into an agreement with a qualified private lender or pre-

Page 739

TITLE 15—COMMERCE AND TRADE

ferred lender to purchase any loan guaranteed
under this subsection.
(d) Extension or renewal of loans; purchase of
participations; assumption of obligations;
disaster loans; interest rates; loan amounts
(1) The Administration may further extend
the maturity of or renew any loan made pursuant to this section, or any loan transferred to
the Administration pursuant to Reorganization Plan Numbered 2 of 1954, or Reorganization Plan Numbered 1 of 1957, for additional
periods not to exceed ten years beyond the period stated therein, if such extension or renewal will aid in the orderly liquidation of
such loan.
(2) During any period in which principal and
interest charges are suspended on the Federal
share of any loan, as provided in subsection (b)
of this section, the Administrator shall, upon
the request of any person, firm, or corporation
having a participation in such loan, purchase
such participation, or assume the obligation of
the borrower, for the balance of such period, to
make principal and interest payments on the
non-Federal share of such loan: Provided, That
no such payments shall be made by the Administrator in behalf of any borrower unless
(i) the Administrator determines that such action is necessary in order to avoid a default,
and (ii) the borrower agrees to make payments
to the Administration in an aggregate amount
equal to the amount paid in its behalf by the
Administrator, in such manner and at such
times (during or after the term of the loan) as
the Administrator shall determine having due
regard to the purposes sought to be achieved
by this paragraph.
(3) With respect to a disaster occurring on or
after October 1, 1978, and prior 10 August 13,
1981, on the Administration’s share of loans
made pursuant to paragraph (1) of subsection
(b) of this section—
(A) if the loan proceeds are to repair or replace a primary residence and/or repair or
replace damaged or destroyed personal property, the interest rate shall be 3 percent on
the first $55,000 of such loan;
(B) if the loan proceeds are to repair or replace property damaged or destroyed and if
the applicant is a business concern which is
unable to obtain sufficient credit elsewhere,
the interest rate shall be as determined by
the Administration, but not in excess of 5
percent per annum; and
(C) if the loan proceeds are to repair or replace property damaged or destroyed and if
the applicant is a business concern which is
able to obtain sufficient credit elsewhere,
the interest rate shall not exceed the current average market yield on outstanding
marketable obligations of the United States
with remaining periods to maturity comparable to the average maturities of such
loans and adjusted to the nearest one-eighth
of 1 percent, and an additional amount as determined by the Administration, but not to
exceed 1 percent: Provided, That three years
after such loan is fully disbursed and every
10 So

in original. Probably should be ‘‘prior to’’.

§ 636

two years thereafter for the term of the
loan, if the Administration determines that
the borrower is able to obtain a loan from
non-Federal sources at reasonable rates and
terms for loans of similar purposes and periods of time, the borrower shall, upon request
by the Administration, apply for and accept
such a loan in sufficient amount to repay
the Administration: Provided further, That
no loan under subsection (b)(1) of this section shall be made, either directly or in cooperation with banks or other lending institutions through agreements to participate
on an immediate or deferred basis, if the
total amount outstanding and committed to
the borrower under such subsection would
exceed $500,000 for each disaster, unless an
applicant constitutes a major source of employment in an area suffering a disaster, in
which case the Administration, in its discretion, may waive the $500,000 limitation.
(4) Notwithstanding the provisions of any
other law, the interest rate on the Federal
share of any loan made under subsection (b) of
this section shall be—
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed
by the Administration but not more than
one-half the rate determined by the Secretary of the Treasury taking into consideration the current average market yield on
outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average maturities
of such loans plus an additional charge of
not to exceed 1 per centum per annum as determined by the Administrator, and adjusted
to the nearest one-eighth of 1 per centum
but not to exceed 8 per centum per annum;
(B) in the case of a homeowner able to secure credit elsewhere, the rate prescribed by
the Administration but not more than the
rate determined by the Secretary of the
Treasury taking into consideration the current average market yield on outstanding
marketable obligations of the United States
with remaining periods to maturity comparable to the average maturities of such
loans plus an additional charge of not to exceed 1 per centum per annum as determined
by the Administrator, and adjusted to the
nearest one-eighth of 1 per centum;
(C) in the case of a business concern unable to obtain credit elsewhere, not to exceed 8 per centum per annum;
(D) in the case of a business concern able
to obtain credit elsewhere, the rate prescribed by the Administration but not in excess of the rate prevailing in private market
for similar loans and not more than the rate
prescribed by the Administration as the
maximum interest rate for deferred participation (guaranteed) loans under subsection
(a) of this section. Loans under this subparagraph shall be limited to a maximum term
of three years.
(5) Notwithstanding the provisions of any
other law, the interest rate on the Federal
share of any loan made under subsection (b)(1)
and (b)(2) of this section on account of a disas-

§ 636

TITLE 15—COMMERCE AND TRADE

ter commencing on or after October 1, 1982,
shall be—
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed
by the Administration but not more than
one-half the rate determined by the Secretary of the Treasury taking into consideration the current average market yield on
outstanding marketable obligations of the
United States with remaining periods to maturity comparable to the average maturities
of such loan plus an additional charge of not
to exceed 1 per centum per annum as determined by the Administrator, and adjusted to
the nearest one-eighth of 1 per centum, but
not to exceed 4 per centum per annum;
(B) in the case of a homeowner able to secure credit elsewhere, the rate prescribed by
the Administration but not more than the
rate determined by the Secretary of the
Treasury taking into consideration the current average market yield on outstanding
marketable obligations of the United States
with remaining periods to maturity comparable to the average maturities of such
loans plus an additional charge of not to exceed 1 per centum per annum as determined
by the Administrator, and adjusted to the
nearest one-eighth of 1 per centum, but not
to exceed 8 per centum per annum;
(C) in the case of a business, private nonprofit organization, or other concern, including agricultural cooperatives, unable to obtain credit elsewhere, not to exceed 4 per
centum per annum;
(D) in the case of a business concern able
to obtain credit elsewhere, the rate prescribed by the Administration but not in excess of the lowest of (i) the rate prevailing in
the private market for similar loans, (ii) the
rate prescribed by the Administration as the
maximum interest rate for deferred participation (guaranteed) loans under subsection
(a) of this section, or (iii) 8 per centum per
annum. Loans under this subparagraph shall
be limited to a maximum term of 7 years.
(6) Notwithstanding the provisions of any
other law, such loans, subject to the reductions required by subparagraphs (A) and (B) of
subsection (b)(1) of this section, shall be in
amounts equal to 100 per centum of loss. The
interest rates for loans made under subsection
(b)(1) and (2) of this section, as determined
pursuant to paragraph (5), shall be the rate of
interest which is in effect on the date of the
disaster commenced: Provided, That no loan
under subsection (b)(1) and (2) of this section
shall be made, either directly or in cooperation with banks or other lending institutions
through agreements to participate on an immediate or deferred (guaranteed) basis, if the
total amount outstanding and committed to
the borrower under subsection (b) of this section would exceed $500,000 for each disaster unless an applicant constitutes a major source of
employment in an area suffering a disaster, in
which case the Administration, in its discretion, may waive the $500,000 limitation: Provided further, That the Administration, subject
to the reductions required by subparagraphs
(A) and (B) of subsection (b)(1) of this section,

Page 740

shall not reduce the amount of eligibility for
any homeowner on account of loss of real estate to less than $100,000 for each disaster nor
for any homeowner or lessee on account of loss
of personal property to less than $20,000 for
each disaster, such sums being in addition to
any eligible refinancing: Provided further, That
the Administration shall not require collateral for loans of $14,000 or less (or such higher
amount as the Administrator determines appropriate in the event of a major disaster)
which are made under paragraph (1) of subsection (b) of this section. Employees of concerns sharing a common business premises
shall be aggregated in determining ‘‘major
source of employment’’ status for nonprofit
applicants owning such premises.
With respect to any loan which is outstanding
on April 18, 1984, and which was made on account of a disaster commencing on or after October 1, 1982, the Administrator shall make such
change in the interest rate on the balance of
such loan as is required herein effective as of
April 18, 1984.
(7) The Administration shall not withhold
disaster assistance pursuant to this paragraph
to nurseries who are victims of drought disasters. As used in subsection (b)(2) of this section the term ‘‘an area affected by a disaster’’
includes any county, or county contiguous
thereto, determined to be a disaster by the
President, the Secretary of Agriculture or the
Administrator of the Small Business Administration.
(e) Funds for small business development centers under section 648 of this title
The Administration shall not fund any Small
Business Development Center or any variation
thereof, except as authorized in section 648 of
this title.
(f) Additional requirements for subsection (b)
loans
(1) 11 Increased deferment authorized
(A) In general
In making loans under subsection (b), the
Administrator may provide, to the person
receiving the loan, an option to defer repayment on the loan.
(B) Period
The period of a deferment under subparagraph (A) may not exceed 4 years.
(g) Net earnings clauses prohibited for subsection (b) loans
In making loans under subsection (b), the Administrator shall not require the borrower to
pay any non-amortized amount for the first five
years after repayment begins.
(h) Loans to handicapped persons and organizations for handicapped
(1) The Administration also is empowered,
where other financial assistance is not available
on reasonable terms, to make such loans (either
directly or in cooperation with Banks or other
lending institutions through agreements to par11 So

in original. No par. (2) has been enacted.

Page 741

TITLE 15—COMMERCE AND TRADE

ticipate on an immediate or deferred basis) as
the Administration may determine to be necessary or appropriate—
(A) to assist any public or private organization—
(i) which is organized under the laws of the
United States or of any State, operated in
the interest of handicapped individuals, the
net income of which does not inure in whole
or in part to the benefit of any shareholder
or other individual;
(ii) which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and
(iii) which, in the production of commodities and in the provision of services during
any fiscal year in which it receives financial
assistance under this subsection, employs
handicapped individuals for not less than 75
per centum of the man-hours required for
the production or provision of the commodities or services; or
(B) to assist any handicapped individual in
establishing, acquiring, or operating a small
business concern.
(2) The Administration’s share of any loan
made under this subsection shall not exceed
$350,000, nor may any such loan be made if the
total amount outstanding and committed (by
participation or otherwise) to the borrower from
the business loan and investment fund established by section 633(c)(1)(B) of this title would
exceed $350,000. In agreements to participate in
loans on a deferred basis under this subsection,
the Administration’s participation may total 100
per centum of the balance of the loan at the
time of disbursement. The Administration’s
share of any loan made under this subsection
shall bear interest at the rate of 3 per centum
per annum. The maximum term of any such
loan, including extensions and renewals thereof,
may not exceed fifteen years. All loans made
under this subsection shall be of such sound
value or so secured as reasonably to assure repayment: Provided, however, That any reasonable doubt shall be resolved in favor of the applicant.
(3) For purposes of this subsection, the term
‘‘handicapped individual’’ means a person who
has a physical, mental, or emotional impairment, defect, ailment, disease, or disability of a
permanent nature which in any way limits the
selection of any type of employment for which
the person would otherwise be qualified or qualifiable.
(i) Loans to small business concerns located in
urban or rural areas with high proportions
of unemployed or low-income individuals, or
owned by low-income individuals
(1) The Administration also is empowered to
make, participate (on an immediate basis) in, or
guarantee loans, repayable in not more than fifteen years, to any small business concern, or to
any qualified person seeking to establish such a
concern, when it determines that such loans will
further the policies established in section 631(b) 2
of this title, with particular emphasis on the
preservation or establishment of small business
concerns located in urban or rural areas with

§ 636

high proportions of unemployed or low-income
individuals, or owned by low-income individuals:
Provided, however, That no such loans shall be
made, participated in, or guaranteed if the total
of such Federal assistance to a single borrower
outstanding at any one time would exceed
$100,000. The Administration may defer payments on the principal of such loans for a grace
period and use such other methods as it deems
necessary and appropriate to assure the successful establishment and operation of such concern.
The Administration may, in its discretion, as a
condition of such financial assistance, require
that the borrower take steps to improve his
management skills by participating in a management training program approved by the Administration: Provided, however, That any management training program so approved must be
of sufficient scope and duration to provide reasonable opportunity for the individuals served
to develop entrepreneurial and managerial selfsufficiency.
(2) The Administration shall encourage, as far
as possible, the participation of the private business community in the program of assistance to
such concerns, and shall seek to stimulate new
private lending activities to such concerns
through the use of the loan guarantees, participations in loans, and pooling arrangements authorized by this subsection.
(3) To insure an equitable distribution between
urban and rural areas for loans between $3,500
and $100,000 made under this subsection, the Administration is authorized to use the agencies
and agreements and delegations developed under
title III of the Economic Opportunity Act of
1964, as amended [42 U.S.C. 2841 et seq.], as it
shall determine necessary.
(4) The Administration shall provide for the
continuing evaluation of programs under this
subsection, including full information on the location, income characteristics, and types of
businesses and individuals assisted, and on new
private lending activity stimulated, and the results of such evaluation together with recommendations shall be included in the report required by section 639(a) of this title.
(5) Loans made pursuant to this subsection
(including immediate participation in and guarantees of such loans) shall have such terms and
conditions as the Administration shall determine, subject to the following limitations—
(A) there is reasonable assurance of repayment of the loan;
(B) the financial assistance is not otherwise
available on reasonable terms from private
sources or other Federal, State, or local programs;
(C) the amount of the loan, together with
other funds available, is adequate to assure
completion of the project or achievement of
the purposes for which the loan is made;
(D) the loan bears interest at a rate not less
than (i) a rate determined by the Secretary of
the Treasury, taking into consideration the
average market yield on outstanding Treasury
obligations of comparable maturity, plus (ii)
such additional charge, if any, toward covering other costs of the program as the Administration may determine to be consistent with
its purposes: Provided, however, That the rate

§ 636

TITLE 15—COMMERCE AND TRADE

of interest charged on loans made in redevelopment areas designated under the Public
Works and Economic Development Act of 1965
[42 U.S.C. 3121 et seq.] shall not exceed the rate
currently applicable to new loans made under
section 201 of that Act [42 U.S.C. 3141]; and
(E) fees not in excess of amounts necessary
to cover administrative expenses and probable
losses may be required on loan guarantees.
(6) The Administration shall take such steps
as may be necessary to insure that, in any fiscal
year, at least 50 per centum of the amounts
loaned or guaranteed pursuant to this subsection are allotted to small business concerns
located in urban areas identified by the Administration as having high concentrations of unemployed or low-income individuals or to small
business concerns owned by low-income individuals. The Administration shall define the meaning of low income as it applies to owners of
small business concerns eligible to be assisted
under this subsection.
(7) No financial assistance shall be extended
pursuant to this subsection where the Administration determines that the assistance will be
used in relocating establishments from one area
to another if such relocation would result in an
increase in unemployment in the area of original location.
(j) Financial assistance for projects providing
technical or management assistance; areas of
high concentration of unemployment or lowincome; preferences; manner and method of
payment; accessible services; program evaluations; establishment of development program; coordination of policies
(1) The Administration shall provide financial
assistance to public or private organizations to
pay all or part of the cost of projects designed to
provide technical or management assistance to
individuals or enterprises eligible for assistance
under subsection (i) of this section, paragraph
(10) of this subsection; and section 637(a) of this
title, with special attention to small businesses
located in areas of high concentration of unemployed or low-income individuals, to small businesses eligible to receive contracts pursuant to
section 637(a) of this title.
(2) Financial assistance under this subsection
may be provided for projects, including, but not
limited to—
(A) planning and research, including feasibility studies and market research;
(B) the identification and development of
new business opportunities;
(C) the furnishing of centralized services
with regard to public services and Federal
Government programs including programs authorized under subsection (i) of this section;
paragraph (10) of this subsection, and section
637(a) of this title;
(D) the establishment and strengthening of
business service agencies, including trade associations and cooperatives; and
(E) the furnishing of business counseling,
management training, and legal and other related services, with special emphasis on the
development of management training programs using the resources of the business community, including the development of manage-

Page 742

ment training opportunities in existing business, and with emphasis in all cases upon providing management training of sufficient
scope and duration to develop entrepreneurial
and managerial self-sufficiency on the part of
the individuals served.
(3) The Administration shall encourage the
placement of subcontracts by businesses with
small business concerns located in areas of high
concentration of unemployed or low-income individuals, with small businesses owned by lowincome individuals, and with small businesses
eligible to receive contracts pursuant to section
637(a) of this title. The Administration may provide incentives and assistance to such businesses that will aid in the training and upgrading of potential subcontractors or other small
business concerns eligible for assistance under
subsections (i) and (j) of this section, and section 637(a) of this title.
(4) The Administration shall give preference to
projects which promote the ownership, participation in ownership, or management of small
businesses owned by low-income individuals and
small businesses eligible to receive contracts
pursuant to section 637(a) of this title.
(5) The financial assistance authorized for
projects under this subsection includes assistance advanced by grant, agreement, or contract.
(6) The Administration is authorized to make
payments under grants and contracts entered
into under this subsection in lump sum or installments, and in advance or by way of reimbursement, and in the case of grants, with necessary adjustments on account of overpayments
or underpayments.
(7) To the extent feasible, services under this
subsection shall be provided in a location which
is easily accessible to the individuals and small
business concerns served.
(8) Repealed. Pub. L. 101–574, title II, § 242(2),
Nov. 15, 1990, 104 Stat. 2827.
(9) The Administration shall take such steps
as may be necessary and appropriate, in coordination and cooperation with the heads of other
Federal departments and agencies, to insure
that contracts, subcontracts, and deposits made
by the Federal Government or with programs
aided with Federal funds are placed in such way
as to further the purposes of subsections (i) and
(j) of this section and section 637(a) of this title.
(10) There is established within the Administration a small business and capital ownership
development program (hereinafter referred to as
the ‘‘Program’’) which shall provide assistance
exclusively for small business concerns eligible
to receive contracts pursuant to section 637(a) of
this title. The program, and all other services
and activities authorized under this subsection
and section 637(a) of this title, shall be managed
by the Associate Administrator for Minority
Small Business and Capital Ownership Development under the supervision of, and responsible
to, the Administrator.
(A) The Program shall—
(i) assist small business concerns participating in the Program (either through public or private organizations) to develop and
maintain comprehensive business plans
which set forth the Program Participant’s
specific business targets, objectives, and

Page 743

TITLE 15—COMMERCE AND TRADE

goals developed and maintained in conformity with subparagraph (D).12
(ii) provide for such other nonfinancial
services as deemed necessary for the establishment, preservation, and growth of small
business concerns participating in the Program, including but not limited to (I) loan
packaging, (II) financial counseling, (III) accounting and bookkeeping assistance, (IV)
marketing assistance, and (V) management
assistance;
(iii) assist small business concerns participating in the Program to obtain equity and
debt financing;
(iv) establish regular performance monitoring and reporting systems for small business concerns participating in the Program
to assure compliance with their business
plans;
(v) analyze and report the causes of success and failure of small business concerns
participating in the Program; and
(vi) provide assistance necessary to help
small business concerns participating in the
Program to procure surety bonds, with such
assistance including, but not limited to, (I)
the preparation of application forms required to receive a surety bond, (II) special
management and technical assistance designed to meet the specific needs of small
business concerns participating in the Program and which have received or are applying to receive a surety bond, and (III) preparation of all forms necessary to receive a
surety bond guarantee from the Administration pursuant to title IV, part B of the Small
Business Investment Act of 1958 [15 U.S.C.
694a et seq.].
(B) Small business concerns eligible to receive contracts pursuant to section 637(a) of
this title shall participate in the Program.
(C)(i) A small business concern participating
in any program or activity conducted under
the authority of this paragraph or eligible for
the award of contracts pursuant to section
637(a) of this title on September 1, 1988, shall
be permitted continued participation and eligibility in such program or activity for a period of time which is the greater of—
(I) 9 years less the number of years since
the award of its first contract pursuant to
section 637(a) of this title; or
(II) its original fixed program participation term (plus any extension thereof) assigned prior to November 15, 1988, plus eighteen months.
(ii) Nothing contained in this subparagraph
shall be deemed to prevent the Administration
from instituting a termination or graduation
pursuant to subparagraph (F) or (H) for issues
unrelated to the expiration of any time period
limitation.
(D)(i) Promptly after certification under
paragraph (11) a Program Participant shall
submit a business plan (hereinafter referred to
as the ‘‘plan’’) as described in clause (ii) of
this subparagraph for review by the Business
Opportunity Specialist assigned to assist such
12 So

in original. The period probably should be a semicolon.

§ 636

Program Participant. The Business Opportunity Specialist shall have a Level I Federal
Acquisition Certification in Contracting (or
any successor certification) or the equivalent
Department of Defense certification, except
that a Business Opportunity Specialist serving
at the time of the date of enactment of the
National Defense Authorization Act for Fiscal
Year 2013 may continue to serve as a Business
Opportunity Specialist for a period of 5 years
beginning on that date of enactment without
such a certification. The plan may be a revision of a preliminary business plan submitted
by the Program Participant or required by the
Administration as a part of the application for
certification under this section and shall be
designed to result in the Program Participant
eliminating the conditions or circumstances
upon which the Administration determined
eligibility pursuant to section 637(a)(6) of this
title. Such plan, and subsequent modifications
submitted under clause (iii) of this subparagraph, shall be approved by the business opportunity specialist prior to the Program Participant being eligible for award of a contract
pursuant to section 637(a) of this title.
(ii) The plans submitted under this subparagraph shall include the following:
(I) An analysis of market potential, competitive environment, and other business
analyses estimating the Program Participant’s prospects for profitable operations
during the term of program participation
and after graduation.
(II) An analysis of the Program Participant’s strengths and weaknesses with particular attention to correcting any financial, managerial, technical, or personnel
conditions which are likely to impede the
small business concern from receiving contracts other than those awarded under section 637(a) of this title.
(III) Specific targets, objectives, and goals,
for the business development of the Program
Participant during the next and succeeding
years utilizing the results of the analyses
conducted pursuant to subclauses (I) and
(II).
(IV) A transition management plan outlining specific steps to assure profitable business operations after graduation (to be incorporated into the Program Participant’s
plan during the first year of the transitional
stage of Program participation).
(V) Estimates of contract awards pursuant
to section 637(a) of this title and from other
sources, which the Program Participant will
require to meet the specific targets, objectives, and goals for the years covered by its
plan. The estimates established shall be consistent with the provisions of subparagraph
(I) and section 637(a) of this title.
(iii) Each Program Participant shall annually review its currently approved plan with
its Business Opportunity Specialist and modify such plan as may be appropriate. Any
modified plan shall be submitted to the Administration for approval. The currently approved plan shall be considered valid until
such time as a modified plan is approved by
the Business Opportunity Specialist. Annual

§ 636

TITLE 15—COMMERCE AND TRADE

reviews pertaining to years in the transitional
stage of program participation shall require,
as appropriate, a written verification that
such Program Participant has complied with
the requirements of subparagraph (I) relating
to attaining business activity from sources
other than contracts awarded pursuant to section 637(a) of this title.
(iv) Each Program Participant shall annually forecast its needs for contract awards
under section 637(a) of this title for the next
program year and the succeeding program
year during the review of its business plan,
conducted pursuant to clause (iii). Such forecast shall be known as the section 8(a) [15
U.S.C. 637(a)] contract support level and shall
be included in the Program Participant’s business plan. Such forecast shall include—
(I) the aggregate dollar value of contract
support to be sought on a noncompetitive
basis under section 637(a) of this title, reflecting compliance with the requirements
of subparagraph (I) relating to attaining
business activity from sources other than
contracts awarded pursuant to section 637(a)
of this title,
(II) the types of contract opportunities
being sought, identified by Standard Industrial Classification (SIC) Code or otherwise,
(III) an estimate of the dollar value of contract support to be sought on a competitive
basis, and
(IV) such other information as may be requested by the Business Opportunity Specialist to provide effective business development assistance to the Program Participant.
(E) A small business concern participating
in the program conducted under the authority
of this paragraph and eligible for the award of
contracts pursuant to section 637(a) of this
title shall be denied all such assistance if such
concern—
(i) voluntarily elects not to continue participation;
(ii) completes the period of Program participation as prescribed by paragraph (15);
(iii) is terminated pursuant to a termination proceeding conducted in accordance
with section 637(a)(9) of this title; or
(iv) is graduated pursuant to a graduation
proceeding conducted in accordance with
section 637(a)(9) of this title.
(F) For purposes of this section and section
637(a) of this title, the term ‘‘terminated’’ and
the term ‘‘termination’’ means the total denial or suspension of assistance under this
paragraph or under section 637(a) of this title
prior to the graduation of the participating
small business concern or prior to the expiration of the maximum program participation
term. An action for termination shall be based
upon good cause, including—
(i) the failure by such concern to maintain
its eligibility for Program participation;
(ii) the failure of the concern to engage in
business practices that will promote its
competitiveness within a reasonable period
of time as evidenced by, among other indicators, a pattern of unjustified delinquent performance or terminations for default with

Page 744

respect to contracts awarded under the authority of section 637(a) of this title;
(iii) a demonstrated pattern of failing to
make required submissions or responses to
the Administration in a timely manner;
(iv) the willful violation of any rule or regulation of the Administration pertaining to
material issues;
(v) the debarment of the concern or its disadvantaged owners by any agency pursuant
to subpart 9.4 of title 48, Code of Federal
Regulations (or any successor regulation); or
(vi) the conviction of the disadvantaged
owner or an officer of the concern for any offense indicating a lack of business integrity
including any conviction for embezzlement,
theft, forgery, bribery, falsification or violation of section 645 of this title. For purposes
of this clause, no termination action shall be
taken with respect to a disadvantaged owner
solely because of the conviction of an officer
of the concern (who is other than a disadvantaged owner) unless such owner conspired
with, abetted, or otherwise knowingly acquiesced in the activity or omission that was
the basis of such officer’s conviction.
(G) The Director of the Division may initiate a termination proceeding by recommending such action to the Associate Administrator for Minority Small Business and Capital Ownership Development. Whenever the
Associate Administrator, or a designee of such
officer, determines such termination is appropriate, within 15 days after making such a determination the Program Participant shall be
provided a written notice of intent to terminate, specifying the reasons for such action.
No Program Participant shall be terminated
from the Program pursuant to subparagraph
(F) without first being afforded an opportunity
for a hearing in accordance with section
637(a)(9) of this title.
(H) For the purposes of this subsection and
section 637(a) of this title the term ‘‘graduated’’ or ‘‘graduation’’ means that the Program Participant is recognized as successfully
completing the program by substantially
achieving the targets, objectives, and goals
contained in the concern’s business plan thereby demonstrating its ability to compete in the
marketplace without assistance under this
section or section 637(a) of this title.
(I)(i) During the developmental stage of its
participation in the Program, a Program Participant shall take all reasonable efforts within its control to attain the targets contained
in its business plan for contracts awarded
other than pursuant to section 637(a) of this
title (hereinafter referred to as ‘‘business activity targets.’’). Such efforts shall be made a
part of the business plan and shall be sufficient in scope and duration to satisfy the Administration that the Program Participant
will engage a reasonable marketing strategy
that will maximize its potential to achieve its
business activity targets.
(ii) During the transitional stage of the Program a Program Participant shall be subject
to regulations regarding business activity targets that are promulgated by the Administration pursuant to clause (iii);

Page 745

TITLE 15—COMMERCE AND TRADE

(iii) The regulations referred to in clause (ii)
shall:
(I) establish business activity targets applicable to Program Participants during the
fifth year and each succeeding year of Program Participation; such targets, for such
period of time, shall reflect a reasonably
consistent increase in contracts awarded
other than pursuant to section 637(a) of this
title, expressed as a percentage of total
sales; when promulgating business activity
targets the Administration may establish
modified targets for Program Participants
that have participated in the Program for a
period of longer than four years on June 1,
1989;
(II) require a Program Participant to attain its business activity targets;
(III) provide that, before the receipt of any
contract to be awarded pursuant to section
637(a) of this title, the Program Participant
(if it is in the transitional stage) must certify that it has complied with the regulations promulgated pursuant to subclause
(II), or that it is in compliance with such remedial measures as may have been ordered
pursuant to regulations issued under subclause (V);
(IV) require the Administration to review
each Program Participant’s performance regarding attainment of business activity targets during periodic reviews of such Participant’s business plan; and
(V) authorize the Administration to take
appropriate remedial measures with respect
to a Program Participant that has failed to
attain a required business activity target for
the purpose of reducing such Participant’s
dependence on contracts awarded pursuant
to section 637(a) of this title; such remedial
actions may include, but are not limited to
assisting the Program Participant to expand
the dollar volume of its competitive business
activity or limiting the dollar volume of
contracts awarded to the Program Participant pursuant to section 637(a) of this title;
except for actions that would constitute a
termination, remedial measures taken pursuant to this subclause shall not be reviewable pursuant to section 637(a)(9) of this
title.
(J)(i) The Administration shall conduct an
evaluation of a Program Participant’s eligibility for continued participation in the Program whenever it receives specific and credible information alleging that such Program
Participant no longer meets the requirements
for Program eligibility. Upon making a finding that a Program Participant is no longer
eligible, the Administration shall initiate a
termination proceeding in accordance with
subparagraph (F). A Program Participant’s
eligibility for award of any contract under the
authority of section 637(a) of this title may be
suspended pursuant to subpart 9.4 of title 48,
Code of Federal Regulations (or any successor
regulation).
(ii)(I) Except as authorized by subclauses (II)
or (III), no award shall be made pursuant to
section 637(a) of this title to a concern other
than a small business concern.

§ 636

(II) In determining the size of a small business concern owned by a socially and economically disadvantaged Indian tribe (or a wholly
owned business entity of such tribe), each
firm’s size shall be independently determined
without regard to its affiliation with the tribe,
any entity of the tribal government, or any
other business enterprise owned by the tribe,
unless the Administrator determines that one
or more such tribally owned business concerns
have obtained, or are likely to obtain, a substantial unfair competitive advantage within
an industry category.
(III) Any joint venture established under the
authority of section 602(b) of Public Law
100–656, the ‘‘Business Opportunity Development Reform Act of 1988’’, shall be eligible for
award of a contract pursuant to section 637(a)
of this title.
(11)(A) The Associate Administrator for Minority Small Business and Capital Ownership
Development shall be responsible for coordinating and formulating policies relating to Federal assistance to small business concerns eligible for assistance under subsection (i) of this
section and small business concerns eligible to
receive contracts pursuant to section 637(a) of
this title.
(B)(i) Except as provided in clause (iii), no individual who was determined pursuant to section 637(a) of this title to be socially and economically disadvantaged before August 15, 1989,
shall be permitted to assert such disadvantage
with respect to any other concern making application for certification after August 15, 1989.
(ii) Except as provided in clause (iii), any individual upon whom eligibility is based pursuant
to section 637(a)(4) of this title shall be permitted to assert such eligibility for only one
small business concern.
(iii) A socially and economically disadvantaged Indian tribe may own more than one small
business concern eligible for assistance pursuant
to paragraph (10) and section 637(a) of this title
if—
(I) the Indian tribe does not own another
firm in the same industry which has been determined to be eligible to receive contracts
under this program, and
(II) the individuals responsible for the management and daily operations of the concern
do not manage more than two Program Participants.
(C) No concern, previously eligible for the
award of contracts pursuant to section 637(a) of
this title, shall be subsequently recertified for
program participation if its prior participation
in the program was concluded for any of the reasons described in paragraph (10)(E).
(D) A concern eligible for the award of contracts pursuant to this subsection shall remain
eligible for such contracts if there is a transfer
of ownership and control (as defined pursuant to
section 637(a)(4) of this title) to individuals who
are determined to be socially and economically
disadvantaged pursuant to section 637(a) of this
title. In the event of such a transfer, the concern, if not terminated or graduated, shall be eligible for a period of continued participation in
the program not to exceed the time limitations
prescribed in paragraph (15).

§ 636

TITLE 15—COMMERCE AND TRADE

(E) There is established a Division of Program
Certification and Eligibility (hereinafter referred to in this paragraph as the ‘‘Division’’)
that shall be made part of the Office of Minority
Small Business and Capital Ownership Development. The Division shall be headed by a Director who shall report directly to the Associate
Administrator for Minority Small Business and
Capital Ownership Development. The Division
shall establish field offices within such regional
offices of the Administration as may be necessary to perform efficiently its functions and
responsibilities.
(F) Subject to the provisions of section
637(a)(9) of this title, the functions and responsibility of the Division are to—
(i) receive, review and evaluate applications
for certification pursuant to paragraphs (4),
(5), (6) and (7) of section 637(a) of this title;
(ii) advise each program applicant within 15
days after the receipt of an application as to
whether such application is complete and suitable for evaluation and, if not, what matters
must be rectified;
(iii) render recommendations on such applications to the Associate Administrator for Minority Small Business and Capital Ownership
Development;
(iv) review and evaluate financial statements and other submissions from concerns
participating in the program established by
paragraph (10) to ascertain continued eligibility to receive subcontracts pursuant to section 637(a) of this title;
(v) make a request for the initiation of termination or graduation proceedings, as appropriate, to the Associate Administrator for Minority Small Business and Capital Ownership
Development;
(vi) make recommendations to the Associate
Administrator for Minority Small Business
and Capital Ownership Development concerning protests from applicants that have been
denied program admission;
(vii) decide protests regarding the status of
a concern as a disadvantaged concern for purposes of any program or activity conducted
under the authority of subsection (d) of section 637 of this title, or any other provision of
Federal law that references such subsection
for a definition of program eligibility; and
(viii) implement such policy directives as
may be issued by the Associate Administrator
for Minority Small Business and Capital Ownership Development pursuant to subparagraph
(I) regarding, among other things, the geographic distribution of concerns to be admitted to the program and the industrial make-up
of such concerns.
(G) An applicant shall not be denied admission
into the program established by paragraph (10)
due solely to a determination by the Division
that specific contract opportunities are unavailable to assist in the development of such concern unless—
(i) the Government has not previously procured and is unlikely to procure the types of
products or services offered by the concern; or
(ii) the purchases of such products or services by the Federal Government will not be in
quantities sufficient to support the develop-

Page 746

mental needs of the applicant and other Program Participants providing the same or similar items or services.
(H) Not later than 90 days after receipt of a
completed application for Program certification, the Associate Administrator for Minority Small Business and Capital Ownership Development shall certify a small business concern
as a Program Participant or shall deny such application.
(I) Thirty days before the conclusion of each
fiscal year, the Director of the Division shall review all concerns that have been admitted into
the Program during the preceding 12-month period. The review shall ascertain the number of
entrants, their geographic distribution and industrial classification. The Director shall also
estimate the expected growth of the Program
during the next fiscal year and the number of
additional Business Opportunity Specialists, if
any, that will be needed to meet the anticipated
demand for the Program. The findings and conclusions of the Director shall be reported to the
Associate Administrator for Minority Small
Business and Capital Ownership Development by
September 30 of each year. Based on such report
and such additional data as may be relevant, the
Associate Administrator shall, by October 31 of
each year, issue policy and program directives
applicable to such fiscal year that—
(i) establish priorities for the solicitation of
program applications from underrepresented
regions and industry categories;
(ii) assign staffing levels and allocate other
program resources as necessary to meet program needs; and
(iii) establish priorities in the processing
and admission of new Program Participants as
may be necessary to achieve an equitable geographic distribution of concerns and a distribution of concerns across all industry categories in proportions needed to increase significantly contract awards to small business
concerns owned and controlled by socially and
economically disadvantaged individuals. When
considering such increase the Administration
shall give due consideration to those industrial categories where Federal purchases have
been substantial but where the participation
rate of such concerns has been limited.
(12)(A) The Administration shall segment the
Capital Ownership Development Program into
two stages: a developmental stage; and a transitional stage.
(B) The developmental stage of program participation shall be designed to assist the concern
in its effort to overcome its economic disadvantage by providing such assistance as may be necessary and appropriate to access its markets and
to strengthen its financial and managerial
skills.
(C) The transitional stage of program participation shall be designed to overcome, insofar as
practicable, the remaining elements of economic
disadvantage and to prepare such concern for
graduation from the program.
(13) A Program Participant, if otherwise eligible, shall be qualified to receive the following

Page 747

TITLE 15—COMMERCE AND TRADE

assistance during the stages of program participation specified in paragraph 12: 13
(A) Contract support pursuant to section
637(a) of this title.
(B) Financial assistance pursuant to subsection (a)(20) of this section.
(C) A maximum of two exemptions from the
requirements of section 35(a) 2 of title 41,
which exemptions shall apply only to contracts awarded pursuant to section 637(a) of
this title and shall only be used to allow for
contingent agreements by a small business
concern to acquire the machinery, equipment,
facilities, or labor needed to perform such contracts. No exemption shall be made pursuant
to this subparagraph if the contract to which
it pertains has an anticipated value in excess
of $10,000,000. This subparagraph shall cease to
be effective on October 1, 1992.
(D) A maximum of five exemptions from the
requirements of sections 3131 and 3133 of title
40, which exemptions shall apply only to contracts awarded pursuant to section 637(a) of
this title, except that, such exemptions may
be granted under this subparagraph only if—
(i) the Administration finds that such concern is unable to obtain the requisite bond
or bonds from a surety and that no surety is
willing to issue a bond subject to the guarantee provision of title IV of the Small Business Investment Act of 1958 (15 U.S.C. 692 et
seq.);
(ii) the Administration and the agency
providing the contracting opportunity have
provided for the protection of persons furnishing materials or labor to the Program
Participant by arranging for the direct disbursement of funds due to such persons by
the procuring agency or through any bank
the deposits of which are insured by the Federal Deposit Insurance Corporation; and
(iii) the contract to which it pertains does
not exceed $3,000,000 in amount. This subparagraph shall cease to be effective on October 1, 1994.
(E) Financial assistance whereby the Administration may purchase in whole or in part,
and on behalf of such concerns, skills training
or upgrading for employees or potential employees of such concerns. Such assistance may
be made without regard to section 647(a) of
this title. Assistance may be made by direct
payment to the training provider or by reimbursing the Program Participant or the Participant’s employee, if such reimbursement is
found to be reasonable and appropriate. For
purposes of this subparagraph the term ‘‘training provider’’ shall mean an institution of
higher education, a community or vocational
college, or an institution eligible to provide
skills training or upgrading under title I of
the Workforce Investment Act of 1998 [29
U.S.C. 2801 et seq.]. The Administration shall,
in consultation with the Secretary of Labor,
promulgate rules and regulations to implement this subparagraph that establish acceptable training and upgrading performance
standards and provide for such monitoring or
13 So

in original. Probably should be paragraph ‘‘(12):’’.

§ 636

audit requirements as may be necessary to ensure the integrity of the training effort. No financial assistance shall be granted under the
subparagraph unless the Administrator determines that—
(i) such concern has documented that it
has first explored the use of existing costfree or cost-subsidized training programs offered by public and private sector agencies
working with programs of employment and
training and economic development;
(ii) no more than five employees or potential employees of such concern are recipients
of any benefits under this subparagraph at
any one time;
(iii) no more than $2,500 shall be made
available for any one employee or potential
employee;
(iv) the length of training or upgrading financed by this subparagraph shall be no less
than one month nor more than six months;
(v) such concern has given adequate assurance it will employ the trainee or upgraded
employee for at least six months after the
training or upgrading financed by this subparagraph has been completed and each
trainee or upgraded employee has provided a
similar assurance to remain within the employ of such concern for such period; if such
concern, trainee, or upgraded employee
breaches this agreement, the Administration
shall be entitled to and shall make diligent
efforts to obtain from the violating party
the repayment of all funds expended on behalf of the violating party, such repayment
shall be made to the Administration together with such interest and costs of collection as may be reasonable; the violating
party shall be barred from receiving any further assistance under this subparagraph;
(vi) the training to be financed may take
place either at such concern’s facilities or at
those of the training provider; and
(vii) such concern will maintain such
records as the Administration deems appropriate to ensure that the provisions of this
paragraph and any other applicable law have
not been violated.
(F) The transfer of technology or surplus
property owned by the United States to such a
concern. Activities designed to effect such
transfer shall be developed in cooperation with
the heads of Federal agencies and shall include
the transfer by grant, license, or sale of such
technology or property to such a concern.
Such property may be transferred to Program
Participants on a priority basis. Technology
or property transferred under this subparagraph shall be used by the concern during the
normal conduct of its business operation and
shall not be sold or transferred to any other
party (other than the Government) during
such concern’s term of participation in the
Program and for one year thereafter.
(G) Training assistance whereby the Administration shall conduct training sessions to assist individuals and enterprises eligible to receive contracts under section 637(a) of this
title in the development of business principles
and strategies to enhance their ability to successfully compete for contracts in the marketplace.

§ 636

TITLE 15—COMMERCE AND TRADE

(H) Joint ventures, leader-follower arrangements, and teaming agreements between the
Program Participant and other Program Participants and other business concerns with respect to contracting opportunities for the research, development, full-scale engineering or
production of major systems. Such activities
shall be undertaken on the basis of programs
developed by the agency responsible for the
procurement of the major system, with the assistance of the Administration.
(I) Transitional management business planning training and technical assistance.
(J) Program Participants in the developmental stage of Program participation shall
be eligible for the assistance provided by subparagraphs (A), (B), (C), (D), (E), (F), and (G).
(14) Program Participants in the transitional
stage of Program participation shall be eligible
for the assistance provided by subparagraphs
(A), (B), (F), (G), (H), and (I) of paragraph (13).
(15) Subject to the provisions of paragraph
(10)(C), a small business concern may receive developmental assistance under the Program and
contracts under section 637(a) of this title for a
total period of not longer than nine years, measured from the date of its certification under the
authority of such section, of which—
(A) no more than four years may be spent in
the developmental stage of Program Participation; and
(B) no more than five years may be spent in
the transitional stage of Program Participation.
(16)(A) The Administrator shall develop and
implement a process for the systematic collection of data on the operations of the Program
established pursuant to paragraph (10).
(B) Not later than April 30 of each year, the
Administrator shall submit a report to the Congress on the Program that shall include the following:
(i) The average personal net worth of individuals who own and control concerns that
were initially certified for participation in the
Program during the immediately preceding
fiscal year. The Administrator shall also indicate the dollar distribution of net worths, at
$50,000 increments, of all such individuals
found to be socially and economically disadvantaged. For the first report required pursuant to this paragraph the Administrator
shall also provide the data specified in the preceding sentence for all eligible individuals in
the Program as of November 15, 1988.
(ii) A description and estimate of the benefits and costs that have accrued to the economy and the Government in the immediately
preceding fiscal year due to the operations of
those business concerns that were performing
contracts awarded pursuant to section 637(a)
of this title.
(iii) A compilation and evaluation of those
business concerns that have exited the Program during the immediately preceding three
fiscal years. Such compilation and evaluation
shall detail the number of concerns actively
engaged in business operations, those that
have ceased or substantially curtailed such operations, including the reasons for such ac-

Page 748

tions, and those concerns that have been acquired by other firms or organizations owned
and controlled by other than socially and economically disadvantaged individuals. For
those businesses that have continued operations after they exited from the Program, the
Administrator shall also separately detail the
benefits and costs that have accrued to the
economy during the immediately preceding
fiscal year due to the operations of such concerns.
(iv) A listing of all participants in the Program during the preceding fiscal year identifying, by State and by Region, for each firm: the
name of the concern, the race or ethnicity,
and gender of the disadvantaged owners, the
dollar value of all contracts received in the
preceding year, the dollar amount of advance
payments received by each concern pursuant
to contracts awarded under section 637(a) of
this title, and a description including (if appropriate) an estimate of the dollar value of
all benefits received pursuant to paragraphs
(13) and (14) and subsection (a)(20) of this section during such year.
(v) The total dollar value of contracts and
options awarded during the preceding fiscal
year pursuant to section 637(a) of this title and
such amount expressed as a percentage of
total sales of (I) all firms participating in the
Program during such year; and (II) of firms in
each of the nine years of program participation.
(vi) A description of such additional resources or program authorities as may be required to provide the types of services needed
over the next two-year period to service the
expected portfolio of firms certified pursuant
to section 637(a) of this title.
(vii) The total dollar value of contracts and
options awarded pursuant to section 637(a) of
this title, at such dollar increments as the Administrator deems appropriate, for each four
digit standard industrial classification code
under which such contracts and options were
classified.
(C) The first report required by subparagraph
(B) shall pertain to fiscal year 1990.
(k) Functions relating to loans and financial assistance for projects providing technical or
management assistance to individuals or enterprises eligible for assistance as small business concerns located in urban or rural
areas with high proportions of unemployed
or low-income individuals, or owned by lowincome individuals
In carrying out its functions under subsections
(i) and (j) of this section and section 637(a) of
this title, the Administration is authorized—
(1) to utilize, with their consent, the services
and facilities of Federal agencies without reimbursement, and, with the consent of any
State or political subdivision of a State, accept and utilize the services and facilities of
such State or subdivision without reimbursement;
(2) to accept, in the name of the Administration, and employ or dispose of in furtherance
of the purposes of this chapter, any money or
property, real, personal, or mixed, tangible, or

Page 749

TITLE 15—COMMERCE AND TRADE

intangible, received by gift, devise, bequest, or
otherwise;
(3) to accept voluntary and uncompensated
services, notwithstanding the provisions of
section 1342 of title 31; and
(4) to employ experts and consultants or organizations thereof as authorized by section
3109 of title 5, except that no individual may
be employed under the authority of this subsection for more than one hundred days in any
fiscal year; to compensate individuals so employed at rates not in excess of the daily
equivalent of the highest rate payable under
section 5332 of title 5, including traveltime;
and to allow them, while away from their
homes or regular places of business, travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of title 5
for persons in the Government service employed intermittently, while so employed: Provided, however, That contracts for such employment may be renewed annually.
(l) Small business intermediary lending pilot
program
(1) Definitions
In this subsection—
(A) the term ‘‘eligible intermediary’’—
(i) means a private, nonprofit entity
that—
(I) seeks or has been awarded a loan
from the Administrator to make loans to
small business concerns under this subsection; and
(II) has not less than 1 year of experience making loans to startup, newly established, or growing small business concerns; and
(ii) includes—
(I) a private, nonprofit community development corporation;
(II) a consortium of private, nonprofit
organizations or nonprofit community
development corporations; and
(III) an agency of or nonprofit entity
established by a Native American Tribal
Government; and
(B) the term ‘‘Program’’ means the small
business intermediary lending pilot program
established under paragraph (2).
(2) Establishment
There is established a 3-year small business
intermediary lending pilot program, under
which the Administrator may make direct
loans to eligible intermediaries, for the purpose of making loans to startup, newly established, and growing small business concerns.
(3) Purposes
The purposes of the Program are—
(A) to assist small business concerns in
areas suffering from a lack of credit due to
poor economic conditions or changes in the
financial market; and
(B) to establish a loan program under
which the Administrator may provide loans
to eligible intermediaries to enable the eligible intermediaries to provide loans to startup, newly established, and growing small
business concerns for working capital, real

§ 636

estate, or the acquisition of materials, supplies, or equipment.
(4) Loans to eligible intermediaries
(A) Application
Each eligible intermediary desiring a loan
under this subsection shall submit an application to the Administrator that describes—
(i) the type of small business concerns to
be assisted;
(ii) the size and range of loans to be
made;
(iii) the interest rate and terms of loans
to be made;
(iv) the geographic area to be served and
the economic, poverty, and unemployment
characteristics of the area;
(v) the status of small business concerns
in the area to be served and an analysis of
the availability of credit; and
(vi) the qualifications of the applicant to
carry out this subsection.
(B) Loan limits
No loan may be made to an eligible intermediary under this subsection if the total
amount outstanding and committed to the
eligible intermediary by the Administrator
would, as a result of such loan, exceed
$1,000,000 during the participation of the eligible intermediary in the Program.
(C) Loan duration
Loans made by the Administrator under
this subsection shall be for a term of 20
years.
(D) Applicable interest rates
Loans made by the Administrator to an eligible intermediary under the Program shall
bear an annual interest rate equal to 1.00
percent.
(E) Fees; collateral
The Administrator may not charge any
fees or require collateral with respect to any
loan made to an eligible intermediary under
this subsection.
(F) Delayed payments
The Administrator shall not require the
repayment of principal or interest on a loan
made to an eligible intermediary under the
Program during the 2-year period beginning
on the date of the initial disbursement of
funds under that loan.
(G) Maximum participants and amounts
During each of fiscal years 2011, 2012, and
2013, the Administrator may make loans
under the Program—
(i) to not more than 20 eligible intermediaries; and
(ii) in a total amount of not more than
$20,000,000.
(5) Loans to small business concerns
(A) In general
The Administrator, through an eligible
intermediary, shall make loans to startup,
newly established, and growing small business concerns for working capital, real estate, and the acquisition of materials, supplies, furniture, fixtures, and equipment.

§ 636

TITLE 15—COMMERCE AND TRADE

(B) Maximum loan
An eligible intermediary may not make a
loan under this subsection of more than
$200,000 to any 1 small business concern.
(C) Applicable interest rates
A loan made by an eligible intermediary to
a small business concern under this subsection, may have a fixed or a variable interest rate, and shall bear an interest rate specified by the eligible intermediary in the application of the eligible intermediary for a
loan under this subsection.
(D) Review restrictions
The Administrator may not review individual loans made by an eligible intermediary to a small business concern before
approval of the loan by the eligible intermediary.
(6) Termination
The authority of the Administrator to make
loans under the Program shall terminate 3
years after September 27, 2010.
(m) Microloan Program
(1)(A) Purposes
The purposes of the Microloan Program
are—
(i) to assist women, low-income, veteran
(within the meaning of such term under section 632(q) of this title), and minority entrepreneurs and business owners and other such
individuals possessing the capability to operate successful business concerns;
(ii) to assist small business concerns in
those areas suffering from a lack of credit
due to economic downturns;
(iii) to establish a microloan program to
be administered by the Small Business Administration—
(I) to make loans to eligible intermediaries to enable such intermediaries to
provide small-scale loans, particularly
loans in amounts averaging not more than
$10,000, to startup, newly established, or
growing small business concerns for working capital or the acquisition of materials,
supplies, or equipment;
(II) to make grants to eligible intermediaries that, together with non-Federal
matching funds, will enable such intermediaries to provide intensive marketing,
management, and technical assistance to
microloan borrowers;
(III) to make grants to eligible nonprofit
entities that, together with non-Federal
matching funds, will enable such entities
to provide intensive marketing, management, and technical assistance to assist
low-income entrepreneurs and other lowincome individuals obtain private sector
financing for their businesses, with or
without loan guarantees; and
(IV) to report to the Committees on
Small Business of the Senate and the
House of Representatives on the effectiveness of the microloan program and the advisability and feasibility of implementing
such a program nationwide; and
(iv) to establish a welfare-to-work microloan initiative, which shall be administered

Page 750

by the Administration, in order to test the
feasibility of supplementing the technical
assistance grants provided under clauses (ii)
and (iii) of subparagraph (B) to individuals
who are receiving assistance under the State
program funded under part A of title IV of
the Social Security Act (42 U.S.C. 601 et
seq.), or under any comparable State funded
means tested program of assistance for lowincome individuals, in order to adequately
assist those individuals in—
(I) establishing small businesses; and
(II) eliminating their dependence on that
assistance.
(B) Establishment
There is established a microloan program,
under which the Administration may—
(i) make direct loans to eligible intermediaries, as provided under paragraph (3),
for the purpose of making short-term, fixed
interest rate microloans to startup, newly
established, and growing small business concerns under paragraph (6);
(ii) in conjunction with such loans and
subject to the requirements of paragraph (4),
make grants to such intermediaries for the
purpose of providing intensive marketing,
management, and technical assistance to
small business concerns that are borrowers
under this subsection; and
(iii) subject to the requirements of paragraph (5), make grants to nonprofit entities
for the purpose of providing marketing,
management, and technical assistance to
low-income individuals seeking to start or
enlarge their own businesses, if such assistance includes working with the grant recipient to secure loans in amounts not to exceed
$50,000 from private sector lending institutions, with or without a loan guarantee from
the nonprofit entity.
(2) Eligibility for participation
An intermediary shall be eligible to receive
loans and grants under subparagraphs (B)(i)
and (B)(ii) of paragraph (1) if it—
(A) meets the definition in paragraph (10); 2
and
(B) has at least 1 year of experience making microloans to startup, newly established, or growing small business concerns
and providing, as an integral part of its
microloan program, intensive marketing,
management, and technical assistance to its
borrowers.
(3) Loans to intermediaries
(A) Intermediary applications
(i) In general
As part of its application for a loan, each
intermediary shall submit a description to
the Administration of—
(I) the type of businesses to be assisted;
(II) the size and range of loans to be
made;
(III) the geographic area to be served
and its economic, poverty, and unemployment characteristics;
(IV) the status of small business concerns in the area to be served and an

Page 751

TITLE 15—COMMERCE AND TRADE

analysis of their credit and technical assistance needs;
(V) any marketing, management, and
technical assistance to be provided in
connection with a loan made under this
subsection;
(VI) the local economic credit markets, including the costs associated with
obtaining credit locally;
(VII) the qualifications of the applicant to carry out the purpose of this subsection; and
(VIII) any plan to involve other technical assistance providers (such as counselors from the Service Corps of Retired
Executives or small business development centers) or private sector lenders
in assisting selected business concerns.
(ii) Selection of intermediaries
In selecting intermediaries to participate in the program established under this
subsection, the Administration shall give
priority to those applicants that provide
loans in amounts averaging not more than
$10,000.
(B) Intermediary contribution
As a condition of any loan made to an
intermediary under subparagraph (B)(i) of
paragraph (1), the Administrator shall require the intermediary to contribute not
less than 15 percent of the loan amount in
cash from non-Federal sources.
(C) Loan limits
Notwithstanding subsection (a)(3) of this
section, no loan shall be made under this
subsection if the total amount outstanding
and committed to one intermediary (excluding outstanding grants) from the business
loan and investment fund established by this
chapter would, as a result of such loan, exceed $750,000 in the first year of such
intermediary’s participation in the program,
and $5,000,000 in the remaining years of the
intermediary’s participation in the program.
(D)(i) In general
The Administrator shall, by regulation, require each intermediary to establish a loan
loss reserve fund, and to maintain such reserve fund until all obligations owed to the
Administration under this subsection are repaid.
(ii) Level of loan loss reserve fund
(I) In general
Subject to subclause (III), the Administrator shall require the loan loss reserve
fund of an intermediary to be maintained
at a level equal to 15 percent of the outstanding balance of the notes receivable
owed to the intermediary.
(II) Review of loan loss reserve
After the initial 5 years of an
intermediary’s participation in the program authorized by this subsection, the
Administrator shall, at the request of the
intermediary, conduct a review of the annual loss rate of the intermediary. Any
intermediary in operation under this sub-

§ 636

section prior to October 1, 1994, that requests a reduction in its loan loss reserve
shall be reviewed based on the most recent
5-year period preceding the request.
(III) Reduction of loan loss reserve
Subject to the requirements of clause
IV,14 the Administrator may reduce the
annual loan loss reserve requirement of an
intermediary to reflect the actual average
loan loss rate for the intermediary during
the preceding 5-year period, except that in
no case shall the loan loss reserve be reduced to less than 10 percent of the outstanding balance of the notes receivable
owed to the intermediary.
(IV) Requirements
The Administrator may reduce the annual loan loss reserve requirement of an
intermediary only if the intermediary
demonstrates to the satisfaction of the Administrator that—
(aa) the average annual loss rate for
the intermediary during the preceding 5year period is less than 15 percent; and
(bb) that 15 no other factors exist that
may impair the ability of the intermediary to repay all obligations owed to
the Administration under this subsection.
(E) Unavailability of comparable credit
An intermediary may make a loan under
this subsection of more than $20,000 to a
small business concern only if such small
business concern demonstrates that it is unable to obtain credit elsewhere at comparable interest rates and that it has good
prospects for success. In no case shall an
intermediary make a loan under this subsection of more than $50,000, or have outstanding or committed to any 1 borrower
more than $50,000.
(F) Loan duration; interest rates
(i) Loan duration
Loans made by the Administration under
this subsection shall be for a term of 10
years.
(ii) Applicable interest rates
Except as provided in clause (iii), loans
made by the Administration under this
subsection to an intermediary shall bear
an interest rate equal to 1.25 percentage
points below the rate determined by the
Secretary of the Treasury for obligations
of the United States with a period of maturity of 5 years, adjusted to the nearest oneeighth of 1 percent.
(iii) Rates applicable to certain small loans
Loans made by the Administration to an
intermediary that makes loans to small
business concerns and entrepreneurs averaging not more than $7,500, shall bear an
interest rate that is 2 percentage points
below the rate determined by the Secretary of the Treasury for obligations of
14 So
15 So

in original. Probably should be ‘‘subclause (IV),’’.
in original. The word ‘‘that’’ probably should not appear.

§ 636

TITLE 15—COMMERCE AND TRADE

the United States with a period of maturity of 5 years, adjusted to the nearest oneeighth of 1 percent.
(iv) Rates applicable to multiple sites or offices
The interest rate prescribed in clause (ii)
or (iii) shall apply to each separate loanmaking site or office of 1 intermediary
only if such site or office meets the requirements of that clause.
(v) Rate basis
The applicable rate of interest under this
paragraph shall—
(I) be applied retroactively for the first
year of an intermediary’s participation
in the program, based upon the actual
lending practices of the intermediary as
determined by the Administration prior
to the end of such year; and
(II) be based in the second and subsequent years of an intermediary’s participation in the program, upon the actual
lending practices of the intermediary
during the term of the intermediary’s
participation in the program.
(vii) 16 Covered intermediaries
The interest rates prescribed in this subparagraph shall apply to all loans made to
intermediaries under this subsection on or
after October 28, 1991.
(G) Delayed payments
The Administration shall not require repayment of interest or principal of a loan
made to an intermediary under this subsection during the first year of the loan.
(H) Fees; collateral
Except as provided in subparagraphs (B)
and (D), the Administration shall not charge
any fees or require collateral other than an
assignment of the notes receivable of the
microloans with respect to any loan made to
an intermediary under this subsection.
(4) Marketing, management and technical assistance grants to intermediaries
Grants made in accordance with subparagraph (B)(ii) of paragraph (1) shall be subject
to the following requirements:
(A) Grant amounts
Except as otherwise provided in subparagraph (C) and subject to subparagraph (B),
each intermediary that receives a loan under
subparagraph (B)(i) of paragraph (1) shall be
eligible to receive a grant to provide marketing, management, and technical assistance to small business concerns that are borrowers under this subsection. Except as provided in subparagraph (C), each intermediary meeting the requirements of subparagraph (B) may receive a grant of not
more than 25 percent of the total outstanding balance of loans made to it under this
subsection.
(B) Contribution
As a condition of a grant made under subparagraph (A), the Administrator shall re16 So

in original. Probably should be ‘‘(vi)’’.

Page 752

quire the intermediary to contribute an
amount equal to 25 percent of the amount of
the grant, obtained solely from non-Federal
sources. In addition to cash or other direct
funding, the contribution may include indirect costs or in-kind contributions paid for
under non-Federal programs.
(C) Additional technical assistance grants for
making certain loans
(i) In general
Each intermediary that has a portfolio
of loans made under this subsection that
averages not more than $10,000 during the
period of the intermediary’s participation
in the program shall be eligible to receive
a grant equal to 5 percent of the total outstanding balance of loans made to the
intermediary under this subsection, in addition to grants made under subparagraph
(A).
(ii) Purposes
A grant awarded under clause (i) may be
used to provide marketing, management,
and technical assistance to small business
concerns that are borrowers under this
subsection.
(iii) Contribution exception
The contribution requirements in subparagraph (B) do not apply to grants made
under this subparagraph.
(D) Eligibility for multiple sites or offices
The eligibility for a grant described in subparagraph (A),5 or (C) shall be determined
separately for each loan-making site or office of 1 intermediary.
(E) Assistance to certain small business concerns
(i) In general
Each intermediary may expend an
amount not to exceed 25 percent of the
grant funds received under paragraph
(1)(B)(ii) to provide information and technical assistance to small business concerns
that are prospective borrowers under this
subsection.
(ii) Technical assistance
An intermediary may expend not more
than 25 percent of the funds received under
paragraph (1)(B)(ii) to enter into third
party contracts for the provision of technical assistance.
(F) Supplemental grant
(i) In general
The Administration may accept any
funds transferred to the Administration
from other departments or agencies of the
Federal Government to make grants in accordance with this subparagraph and section 202(b) of the Small Business Reauthorization Act of 1997 to participating intermediaries and technical assistance providers under paragraph (5), for use in accordance with clause (iii) to provide additional
technical assistance and related services
to recipients of assistance under a State

Page 753

TITLE 15—COMMERCE AND TRADE

program described in paragraph (1)(A)(iv)
at the time they initially apply for assistance under this subparagraph.
(ii) Eligible recipients; grant amounts
In making grants under this subparagraph, the Administration may select,
from among participating intermediaries
and technical assistance providers described in clause (i), not more than 20
grantees in fiscal year 1998, not more than
25 grantees in fiscal year 1999, and not
more than 30 grantees in fiscal year 2000,
each of whom may receive a grant under
this subparagraph in an amount not to exceed $200,000 per year.
(iii) Use of grant amounts
Grants under this subparagraph—
(I) are in addition to other grants provided under this subsection and shall not
require the contribution of matching
amounts as a condition of eligibility;
and
(II) may be used by a grantee—
(aa) to pay or reimburse a portion of
child care and transportation costs of
recipients of assistance described in
clause (i), to the extent such costs are
not otherwise paid by State block
grants under the Child Care Development Block Grant Act of 1990 (42 U.S.C.
9858 et seq.) or under part A of title IV
of the Social Security Act (42 U.S.C.
601 et seq.); and
(bb) for marketing, management, and
technical assistance to recipients of
assistance described in clause (i).
(iv) Memorandum of Understanding
Prior to accepting any transfer of funds
under clause (i) from a department or
agency of the Federal Government, the
Administration shall enter into a Memorandum of Understanding with the department or agency, which shall—
(I) specify the terms and conditions of
the grants under this subparagraph; and
(II) provide for appropriate monitoring
of expenditures by each grantee under
this subparagraph and each recipient of
assistance described in clause (i) who receives assistance from a grantee under
this subparagraph, in order to ensure
compliance with this subparagraph by
those grantees and recipients of assistance.
(5) Private sector borrowing technical assistance grants
Grants made in accordance with subparagraph (B)(iii) of paragraph (1) shall be subject
to the following requirements:
(A) Grant amounts
Subject to the requirements of subparagraph (B), the Administration may make not
more than 55 grants annually, each in
amounts not to exceed $200,000 for the purposes specified in subparagraph (B)(iii) of
paragraph (1).
(B) Contribution
As a condition of any grant made under
subparagraph (A), the Administration shall

§ 636

require the grant recipient to contribute an
amount equal to 20 percent of the amount of
the grant, obtained solely from non-Federal
sources. In addition to cash or other direct
funding, the contribution may include indirect costs or in-kind contributions paid for
under non-Federal programs.
(6) Loans to small business concerns from eligible intermediaries
(A) In general
An eligible intermediary shall make shortterm, fixed rate loans to startup, newly established, and growing small business concerns from the funds made available to it
under subparagraph (B)(i) of paragraph (1)
for working capital and the acquisition of
materials, supplies, furniture, fixtures, and
equipment.
(B) Portfolio requirement
To the extent practicable, each intermediary that operates a microloan program
under this subsection shall maintain a
microloan portfolio with an average loan
size of not more than $15,000.
(C) Interest limit
Notwithstanding any provision of the laws
of any State or the constitution of any State
pertaining to the rate or amount of interest
that may be charged, taken, received, or reserved on a loan, the maximum rate of interest to be charged on a microloan funded
under this subsection shall not exceed the
rate of interest applicable to a loan made to
an intermediary by the Administration—
(i) in the case of a loan of more than
$7,500 made by the intermediary to a small
business concern or entrepreneur by more
than 7.75 percentage points; and
(ii) in the case of a loan of not more than
$7,500 made by the intermediary to a small
business concern or entrepreneur by more
than 8.5 percentage points.
(D) Review restriction
The Administration shall not review individual microloans made by intermediaries
prior to approval.
(E) Establishment of child care or transportation businesses
In addition to other eligible small businesses concerns, borrowers under any program under this subsection may include individuals who will use the loan proceeds to
establish for-profit or nonprofit child care
establishments or businesses providing forprofit transportation services.
(7) Program funding for microloans
(A) Number of participants
Under the program authorized by this subsection, the Administration may fund, on a
competitive basis, not more than 300 intermediaries.
(B) Allocation
(i) Minimum allocation
Subject to the availability of appropriations, of the total amount of new loan

§ 636

TITLE 15—COMMERCE AND TRADE
funds made available for award under this
subsection in each fiscal year, the Administration shall make available for award in
each State (including the District of Columbia, the Commonwealth of Puerto
Rico, the United States Virgin Islands,
Guam, and American Samoa) an amount
equal to the sum of—
(I) the lesser of—
(aa) $800,000; or
(bb) 1⁄55 of the total amount of new
loan funds made available for award
under this subsection for that fiscal
year; and

(II) any additional amount, as determined by the Administration.
(ii) Redistribution
If, at the beginning of the third quarter
of a fiscal year, the Administration determines that any portion of the amount
made available to carry out this subsection is unlikely to be made available
under clause (i) during that fiscal year, the
Administration may make that portion
available for award in any one or more
States (including the District of Columbia,
the Commonwealth of Puerto Rico, the
United States Virgin Islands, Guam, and
American Samoa) without regard to clause
(i).
(8) Equitable distribution of intermediaries
In approving microloan program applicants
and providing funding to intermediaries under
this subsection, the Administration shall select and provide funding to such intermediaries as will ensure appropriate availability of loans for small businesses in all industries located throughout each State, particularly those located in urban and in rural areas.
(9) Grants for management, marketing, technical assistance, and related services
(A) In general
The Administration may procure technical
assistance for intermediaries participating
in the Microloan Program to ensure that
such intermediaries have the knowledge,
skills, and understanding of microlending
practices necessary to operate successful
microloan programs.
(B) Assistance amount
The Administration shall transfer 7 percent of its annual appropriation for loans
and loan guarantees under this subsection to
the Administration’s Salaries and Expense
Account for the specific purpose of providing
1 or more technical assistance grants to experienced microlending organizations and
national and regional nonprofit organizations that have demonstrated experience in
providing training support for microenterprise development and financing.17 to
achieve the purpose set forth in subparagraph (A).
(C) Welfare-to-work microloan initiative
Of amounts made available to carry out
the welfare-to-work microloan initiative
17 So

in original. The period probably should not appear.

Page 754

under paragraph (1)(A)(iv) in any fiscal year,
the Administration may use not more than 5
percent to provide technical assistance, either directly or through contractors, to welfare-to-work microloan initiative grantees,
to ensure that, as grantees, they have the
knowledge, skills, and understanding of
microlending and welfare-to-work transition, and other related issues, to operate a
successful welfare-to-work microloan initiative.
(10) Report to Congress
On November 1, 1995, the Administration
shall submit to the Committees on Small
Business of the Senate and the House of Representatives a report, including the Administration’s evaluation of the effectiveness of the
first 31⁄2 years of the microloan program and
the following:
(A) the numbers and locations of the intermediaries funded to conduct microloan programs;
(B) the amounts of each loan and each
grant to intermediaries;
(C) a description of the matching contributions of each intermediary;
(D) the numbers and amounts of microloans made by the intermediaries to small
business concern borrowers;
(E) the repayment history of each intermediary;
(F) a description of the loan portfolio of
each intermediary including the extent to
which it provides microloans to small business concerns in rural areas; and
(G) any recommendations for legislative
changes that would improve program operations.
(11) Definitions
For purposes of this subsection—
(A) the term ‘‘intermediary’’ means—
(i) a private, nonprofit entity;
(ii) a private, nonprofit community development corporation;
(iii) a consortium of private, nonprofit
organizations or nonprofit community development corporations;
(iv) a quasi-governmental economic development entity (such as a planning and
development district), other than a State,
county, municipal government, or any
agency thereof, if—
(I) no application is received from an
eligible nonprofit organization; or
(II) the Administration determines
that the needs of a region or geographic
area are not adequately served by an existing, eligible nonprofit organization
that has submitted an application; or
(v) an agency of or nonprofit entity established by a Native American Tribal
Government,
that seeks to borrow or has borrowed funds
from the Administration to make microloans to small business concerns under this
subsection;
(B) the term ‘‘microloan’’ means a shortterm, fixed rate loan of not more than
$50,000, made by an intermediary to a start-

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TITLE 15—COMMERCE AND TRADE

up, newly established, or growing small business concern;
(C) the term ‘‘rural area’’ means any political subdivision or unincorporated area—
(i) in a nonmetropolitan county (as defined by the Secretary of Agriculture) or
its equivalent thereof; or
(ii) in a metropolitan county or its
equivalent that has a resident population
of less than 20,000 if the Small Business
Administration has determined such political subdivision or area to be rural.
(12) Deferred participation loan pilot
In lieu of making direct loans to intermediaries as authorized in paragraph (1)(B),
during fiscal years 1998 through 2000, the Administration may, on a pilot program basis,
participate on a deferred basis of not less than
90 percent and not more than 100 percent on
loans made to intermediaries by a for-profit or
nonprofit entity or by alliances of such entities, subject to the following conditions:
(A) Number of loans
In carrying out this paragraph, the Administration shall not participate in providing
financing on a deferred basis to more than 10
intermediaries in urban areas or more than
10 intermediaries in rural areas.
(B) Term of loans
The term of each loan shall be 10 years.
During the first year of the loan, the intermediary shall not be required to repay any
interest or principal. During the second
through fifth years of the loan, the intermediary shall be required to pay interest
only. During the sixth through tenth years
of the loan, the intermediary shall be required to make interest payments and fully
amortize the principal.
(C) Interest rate
The interest rate on each loan shall be the
rate specified by paragraph (3)(F) for direct
loans.
(13) Evaluation of welfare-to-work microloan
initiative
On January 31, 1999, and annually thereafter,
the Administration shall submit to the Committees on Small Business of the House of
Representatives and the Senate a report on
any monies distributed pursuant to paragraph
(4)(F).
(n) Repayment deferred for active duty reservists
(1) Definitions
In this subsection:
(A) Eligible reservist
The term ‘‘eligible reservist’’ means a
member of a reserve component of the
Armed Forces ordered to active duty during
a period of military conflict.
(B) Essential employee
The term ‘‘essential employee’’ means an
individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful

§ 636

day-to-day operations of that small business
concern.
(C) Period of military conflict
The term ‘‘period of military conflict’’
means—
(i) a period of war declared by the Congress;
(ii) a period of national emergency declared by the Congress or by the President;
or
(iii) a period of a contingency operation,
as defined in section 101(a) of title 10.
(D) Qualified borrower
The term ‘‘qualified borrower’’ means—
(i) an individual who is an eligible reservist and who received a direct loan
under subsection (a) or (b) of this section
before being ordered to active duty; or
(ii) a small business concern that received a direct loan under subsection (a) or
(b) of this section before an eligible reservist, who is an essential employee, was ordered to active duty.
(2) Deferral of direct loans
(A) In general
The Administration shall, upon written request, defer repayment of principal and interest due on a direct loan made under subsection (a) or (b) of this section, if such loan
was incurred by a qualified borrower.
(B) Period of deferral
The period of deferral for repayment under
this paragraph shall begin on the date on
which the eligible reservist is ordered to active duty and shall terminate on the date
that is 180 days after the date such eligible
reservist is discharged or released from active duty.
(C) Interest rate reduction during deferral
Notwithstanding any other provision of
law, during the period of deferral described
in subparagraph (B), the Administration
may, in its discretion, reduce the interest
rate on any loan qualifying for a deferral
under this paragraph.
(3) Deferral of loan guarantees and other financings
The Administration shall—
(A) encourage intermediaries participating
in the program under subsection (m) of this
section to defer repayment of a loan made
with proceeds made available under that
subsection, if such loan was incurred by a
small business concern that is eligible to
apply for assistance under subsection (b)(3)
of this section; and
(B) not later than 30 days after August 17,
1999, establish guidelines to—
(i) encourage lenders and other intermediaries to defer repayment of, or provide other relief relating to, loan guarantees under subsection (a) of this section
and financings under section 697a of this
title that were incurred by small business
concerns that are eligible to apply for assistance under subsection (b)(3) of this section, and loan guarantees provided under

§ 636

TITLE 15—COMMERCE AND TRADE
subsection (m) of this section if the intermediary provides relief to a small business
concern under this paragraph; and
(ii) implement a program to provide for
the deferral of repayment or other relief to
any intermediary providing relief to a
small business borrower under this paragraph.

(Pub. L. 85–536, § 2[7], July 18, 1958, 72 Stat. 387;
Pub. L. 85–699, title VI, § 602(c), Aug. 21, 1958, 72
Stat. 698; Pub. L. 86–367, § 2, Sept. 22, 1959, 73
Stat. 647; Pub. L. 87–70, title III, § 305[a], June 30,
1961, 75 Stat. 167; Pub. L. 87–305, § 9, Sept. 26, 1961,
75 Stat. 668; Pub. L. 88–264, § 1, Feb. 5, 1964, 78
Stat. 7; Pub. L. 88–560, title III, § 319, Sept. 2,
1964, 78 Stat. 794; Pub. L. 89–59, § 1(a), (b), June
30, 1965, 79 Stat. 206; Pub. L. 89–409, § 3(a), May 2,
1966, 80 Stat. 133; Pub. L. 89–769, § 7(b), Nov. 6,
1966, 80 Stat. 1319; Pub. L. 90–104, title I, §§ 103,
104, Oct. 11, 1967, 81 Stat. 268; Pub. L. 90–448, title
XI, § 1106(a), Aug. 1, 1968, 82 Stat. 567; Pub. L.
90–495, § 31, Aug. 23, 1968, 82 Stat. 835; Pub. L.
91–173, title V, § 504(a), (b), Dec. 30, 1969, 83 Stat.
802; Pub. L. 91–596, § 28(a), (b), Dec. 29, 1970, 84
Stat. 1618; Pub. L. 91–597, § 25(a), (b), Dec. 29, 1970,
84 Stat. 1633, 1634; Pub. L. 92–385, §§ 1(a), 2(a),
Aug. 16, 1972, 86 Stat. 554, 555; Pub. L. 92–500,
§ 8(a), Oct. 18, 1972, 86 Stat. 898; Pub. L. 92–595,
§ 3(b), Oct. 27, 1972, 86 Stat. 1316; Pub. L. 93–237,
§§ 2(a), (b), 3(a), 5, 6, Jan. 2, 1974, 87 Stat. 1023,
1024; Pub. L. 93–386, §§ 2(a)(4), 3(2), 8, 9, 12, Aug.
23, 1974, 88 Stat. 742, 746, 748, 749; Pub. L. 94–305,
title I, §§ 108(b), 109, 111, 112(c), (d), 114, June 4,
1976, 90 Stat. 666, 667; Pub. L. 95–89, title I,
§ 101(d), (e), title III, §§ 301, 302, title IV, §§ 402–405,
Aug. 4, 1977, 91 Stat. 553, 558–560; Pub. L. 95–315,
§§ 2, 3, July 4, 1978, 92 Stat. 377, 378; Pub. L.
95–507, title II, §§ 204, 205, 231, Oct. 24, 1978, 92
Stat. 1764, 1766, 1772; Pub. L. 95–510, § 104, Oct. 24,
1978, 92 Stat. 1782; Pub. L. 96–38, title I, § 101(a),
(b), July 25, 1979, 93 Stat. 118; Pub. L. 96–302, title
I, §§ 119(a), (b), 122–124, title II, § 203, title V, § 505,
July 2, 1980, 94 Stat. 840, 841, 843, 848, 852; Pub. L.
96–481, title I, §§ 104, 106(a), 107, 112, Oct. 21, 1980,
94 Stat. 2322, 2323; Pub. L. 97–35, title XIX, §§ 1902,
1910–1912, 1913(a), (c), 1914, Aug. 13, 1981, 95 Stat.
767, 778–780; Pub. L. 98–270, title III, §§ 301, 304,
308, 309, 311, Apr. 18, 1984, 98 Stat. 159–161; Pub. L.
98–395, § 5, Aug. 21, 1984, 98 Stat. 1368; Pub. L.
99–272, title XVIII, §§ 18006(a)(1), (2), 18007, 18013,
Apr. 7, 1986, 100 Stat. 366, 370; Pub. L. 99–514, § 2,
Oct. 22, 1986, 100 Stat. 2095; Pub. L. 100–418, title
VIII, §§ 8005, 8007(a), Aug. 23, 1988, 102 Stat. 1557,
1559; Pub. L. 100–533, title III, § 302(a), Oct. 25,
1988, 102 Stat. 2693; Pub. L. 100–590, title I,
§§ 102(a), 103, 111(c), 119(a), 120–122, Nov. 3, 1988,
102 Stat. 2992, 2995, 2999, 3000; Pub. L. 100–656,
title II, §§ 201(a), 202, 203, 205, 206, 208, title III,
§§ 301–303(a), title IV, § 408, title V, § 505(h), Nov.
15, 1988, 102 Stat. 3856, 3858, 3859, 3861, 3862,
3865–3868, 3877, 3887; Pub. L. 100–707, title I,
§ 109(f), Nov. 23, 1988, 102 Stat. 4708; Pub. L.
101–37, §§ 4–6(a), 7(a), 8–10(b), June 15, 1989, 103
Stat. 70–73; Pub. L. 101–162, title V, (1), (2), Nov.
21, 1989, 103 Stat. 1024, 1025; Pub. L. 101–574, title
II, §§ 202, 204(a), 206, 242, 245, title III, § 307, Nov.
15, 1990, 104 Stat. 2818–2820, 2827, 2830; Pub. L.
102–140, title VI, § 609(b), (h), Oct. 28, 1991, 105
Stat. 825, 827; Pub. L. 102–191, § 4, Dec. 5, 1991, 105
Stat. 1591; Pub. L. 102–366, title I, §§ 104, 113(a),
title II, § 211, Sept. 4, 1992, 106 Stat. 988, 989, 997;

Page 756

Pub. L. 102–564, title III, § 307(b), (c), Oct. 28, 1992,
106 Stat. 4263, 4264; Pub. L. 103–81, §§ 4, 5(a), 8,
Aug. 13, 1993, 107 Stat. 781, 782; Pub. L. 103–403,
title II, §§ 201, 202, 204–208(b), 209–211, title VI,
§§ 603–605(a), Oct. 22, 1994, 108 Stat. 4180–4183, 4202,
4203; Pub. L. 104–36, §§ 2–4(a), 5, Oct. 12, 1995, 109
Stat. 295–297; Pub. L. 104–208, div. D, title I,
§§ 103(a)–(d), (f), 105, 107, 111, Sept. 30, 1996, 110
Stat. 3009–726, 3009–727, 3009–731 to 3009–733; Pub.
L. 105–135, title II, §§ 201, 202(a), 231, title VII,
§ 706, Dec. 2, 1997, 111 Stat. 2597, 2598, 2606, 2637;
Pub. L. 105–277, div. A, § 101(f) [title VIII,
§ 405(d)(10), (f)(9)], Oct. 21, 1998, 112 Stat. 2681–337,
2681–420, 2681–430; Pub. L. 106–8, § 3(a), (c), Apr. 2,
1999, 113 Stat. 13, 16; Pub. L. 106–22, §§ 2, 3, Apr.
27, 1999, 113 Stat. 36, 37; Pub. L. 106–24, § 1(a), Apr.
27, 1999, 113 Stat. 39; Pub. L. 106–50, title IV,
§§ 401(b), 402(a), (b), 403, 404, Aug. 17, 1999, 113
Stat. 244–246; Pub. L. 106–554, § 1(a)(9) [title II,
§§ 202–208(a), 210, title VIII, § 802(a)], Dec. 21, 2000,
114 Stat. 2763, 2763A–681 to 2763A–684, 2763A–702;
Pub. L. 107–100, § 6(a), Dec. 21, 2001, 115 Stat. 970;
Pub. L. 108–447, div. K, title I, §§ 101(a), 102,
103(a), 107(a), (b), Dec. 8, 2004, 118 Stat. 3442–3446;
Pub. L. 109–163, div. A, title VIII, § 845(a)(2), (c),
Jan. 6, 2006, 119 Stat. 3390, 3391; Pub. L. 110–140,
title XII, §§ 1201, 1202, Dec. 19, 2007, 121 Stat. 1764,
1765; Pub. L. 110–186, title II, §§ 201(a), 203, 204,
208, Feb. 14, 2008, 122 Stat. 627, 629, 631; Pub. L.
110–234, title XII, §§ 12061, 12063(a), (c)(2), 12065,
12066(a),
12068(a),
(b)(2),
12070,
12074(a),
12077–12078(b)(1), (c), 12081–12083(a), May 22, 2008,
122 Stat. 1406, 1407, 1409–1411, 1414–1418; Pub. L.
110–246, § 4(a), title XII, §§ 12061, 12063(a), (c)(2),
12065, 12066(a), 12068(a), (b)(2), 12070, 12074(a),
12077–12078(b)(1), (c), 12081–12083(a), June 18, 2008,
122 Stat. 1664, 2168, 2169, 2171–2173, 2176–2180; Pub.
L. 111–240, title I, §§ 1111, 1113, 1131(a), 1133, 1135,
1206(a)–(g), 1401(a), (c)(1), Sept. 27, 2010, 124 Stat.
2507, 2508, 2512, 2514, 2520, 2530–2532, 2547, 2549;
Pub. L. 112–74, div. C, title V, § 531, Dec. 23, 2011,
125 Stat. 922; Pub. L. 112–239, div. A, title XVI,
§ 1622(c), Jan. 2, 2013, 126 Stat. 2069.)
AMENDMENT OF SUBSECTION (a)
Pub. L. 111–240, title I, § 1133(b), Sept. 27,
2010, 124 Stat. 2515, provided that, effective
Sept. 30, 2013, subsection (a) of this section is
amended by striking paragraph (34) and redesignating paragraph (35), as added by section
1206 of Pub. L. 111–240, as paragraph (34). See
2010 Amendment notes below.
REFERENCES IN TEXT
Subsections (b) and (c) of section 631 of this title, referred to in subsecs. (a)(11) and (i)(1), were redesignated
subsections (c) and (d), respectively, and a new subsection (b) was added by Pub. L. 100–418, title VIII,
§ 8002, Aug. 23, 1988, 102 Stat. 1553.
The Small Business Investment Act of 1958, referred
to in subsecs. (a)(13) and (j)(10)(A)(vi), (13)(D)(i), is Pub.
L. 85–699, Aug. 21, 1958, 72 Stat. 689. Title IV, part B of
title IV, and title V of the Act are classified generally
to subchapter IV–A (§ 692 et seq.), part B (§ 694a et seq.)
of subchapter IV–A, and subchapter V (§ 695 et seq.), respectively, of chapter 14B of this title. For complete
classification of this Act to the Code, see Short Title
note set out under section 661 of this title and Tables.
The Trade Act of 1974, referred to in subsec. (a)(16)(E),
is Pub. L. 93–618, Jan. 3, 1975, 88 Stat. 1978. Chapter 3 of
title II of the Act is classified generally to part 3 (§ 2341
et seq.) of subchapter II of chapter 12 of Title 19, Customs Duties. For complete classification of this Act to
the Code, see section 2101 of Title 19 and Tables.

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The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (b), is Pub.
L. 93–288, May 22, 1974, 88 Stat. 143, formerly known as
the Disaster Relief and Emergency Assistance Act,
which is classified principally to chapter 68 (§ 5121 et
seq.) of Title 42, The Public Health and Welfare. For
complete classification of this Act to the Code, see
Short Title note set out under section 5121 of Title 42
and Tables.
Section 231 of the Disaster Relief Act of 1970 [15
U.S.C. 636a], referred to in penultimate par. of subsec.
(b), was repealed by Pub. L. 97–35, title XIX, § 1917, Aug.
13, 1981, 95 Stat. 781.
The date of enactment of the Small Business Disaster
Response and Loan Improvements Act of 2008, referred
to in subsec. (c)(10), is the date of enactment of subtitle
B (§§ 12051–12091) of title XII of Pub. L. 110–246, which
was approved June 18, 2008.
Reorganization Plan Numbered 2 of 1954, referred to
in subsec. (d)(1), is set out in the Appendix to Title 5,
Government Organization and Employees.
Reorganization Plan Numbered 1 of 1957, referred to
in subsec. (d)(1), is set out in the Appendix to Title 5.
The Economic Opportunity Act of 1964, referred to in
subsec. (i)(3), is Pub. L. 88–452, Aug. 20, 1964, 78 Stat. 508.
Title III of the Act was classified generally to subchapter III (§ 2841 et seq.) of chapter 34 of Title 42, The
Public Health and Welfare, prior to its repeal by Pub.
L. 97–35, title VI, § 683(a), Aug. 13, 1981, 95 Stat. 519. For
complete classification of this Act to the Code, see
Tables.
The Public Works and Economic Development Act of
1965, referred to in subsec. (i)(5)(D), is Pub. L. 89–136,
Aug. 26, 1965, 79 Stat. 552, which is classified generally
to chapter 38 (§ 3121 et seq.) of Title 42. For complete
classification of this Act to the Code, see Short Title
note set out under section 3121 of Title 42 and Tables.
The date of enactment of the National Defense Authorization Act for Fiscal Year 2013, referred to in subsec. (j)(10)(D)(i), is the date of enactment of Pub. L.
112–239, which was approved Jan. 2, 2013.
Section 602(b) of Public Law 100–656, the ‘‘Business
Opportunity Development Reform Act of 1988’’, referred
to in subsec. (j)(10)(J)(ii)(III), is set out as a note under
section 637 of this title.
Section 35(a) of title 41, referred to in subsec.
(j)(13)(C), was struck out and former section 35(b) of
title 41 redesignated section 35(a) by Pub. L. 103–355,
title VII, § 7201(1), Oct. 13, 1994, 108 Stat. 3378. Section 35
of title 41 was subsequently repealed and restated as
sections 6501(1) and 6502 of Title 41, Public Contracts,
by Pub. L. 111–350, §§ 3, 7(b), Jan. 4, 2011, 124 Stat. 3677,
3855. For disposition of sections of former Title 41, see
Disposition Table preceding section 101 of Title 41.
The Workforce Investment Act of 1998, referred to in
subsec. (j)(13)(E), is Pub. L. 105–220, Aug. 7, 1998, 112
Stat. 936. Title I of the Act is classified principally to
chapter 30 (§ 2801 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short
Title note set out under section 9201 of Title 20, Education, and Tables.
The Social Security Act, referred to in subsec.
(m)(1)(A)(iv), (4)(F)(iii)(II)(aa), is act Aug. 14, 1935, ch.
531, 49 Stat. 620. Part A of title IV of the Act is classified generally to part A (§ 601 et seq.) of subchapter IV
of chapter 7 of Title 42, The Public Health and Welfare.
For complete classification of this Act to the Code, see
section 1305 of Title 42 and Tables.
Paragraph (10), referred to in subsec. (m)(2)(A), was
redesignated paragraph (11) by Pub. L. 102–366, title I,
§ 113(a)(8), Sept. 4, 1992, 106 Stat. 992.
Section 202(b) of the Small Business Reauthorization
Act of 1997, referred to in subsec. (m)(4)(F)(i), is section
202(b) of Pub. L. 105–135, which is set out as a note
below.
The Child Care and Development Block Grant Act of
1990, referred to in subsec. (m)(4)(F)(iii)(II)(aa), is subchapter C (§§ 658A–658R) of chapter 8 of subtitle A of
title VI of Pub. L. 97–35, as added by Pub. L. 101–508,
title V, § 5082(2), Nov. 5, 1990, 104 Stat. 1388–236, which is

classified generally to subchapter II–B (§ 9858 et seq.) of
chapter 105 of Title 42, The Public Health and Welfare.
For complete classification of this Act to the Code, see
Short Title note set out under section 9801 of Title 42
and Tables.
CODIFICATION
September 30, 1996, referred to in subsec. (a)(25)(C),
was in the original ‘‘the date of enactment of this subsection’’ which was translated as meaning the date of
enactment of Pub. L. 104–208, which enacted par. (25) of
subsec. (a), to reflect the probable intent of Congress.
In subsec. (d)(3), ‘‘August 13, 1981’’ substituted for
‘‘the effective date of this Act’’, such words having
been inserted in place of ‘‘to October 1, 1983’’ by section
1914 of Pub. L. 97–35. ‘‘This Act’’ probably meant the
Small Business Budget Reconciliation and Loan Consolidation/Improvement Act of 1981 (title XIX of Pub.
L. 97–35) rather than the Small Business Act (Pub. L.
85–536). See Effective Date of 1981 Amendment note set
out under section 631 of this title.
In subsec. (j)(11)(B)(i), as enacted by the amendments
made by Pub. L. 101–37, ‘‘August 15, 1989’’ substituted
for ‘‘the effective date of this subparagraph’’ and ‘‘such
effective date’’. Section 32 of Pub. L. 101–37 provided
that the amendments made by Pub. L. 101–37 shall
apply as if included in Pub. L. 100–656. Section
803(b)(1)(A) of Pub. L. 100–656 provided that the amendment made by section 201(a) thereof to subsec. (j)(11)
shall take effect on June 1, 1989. Section 31 of Pub. L.
101–37 amended section 803(b) of Pub. L. 100–656 to make
such amendments effective on August 15, 1989, in place
of June 1, 1989. See 1988 and 1989 Effective Date of
Amendment notes below.
‘‘Sections 3131 and 3133 of title 40’’ substituted in subsec. (j)(13)(D) for ‘‘the Act entitled ‘An Act requiring
contracts for the construction, alteration and repair of
any public building or public work of the United States
to be accompanied by a performance bond protecting
the United States and by an additional bond for the
protection of persons furnishing material and labor for
the construction, alteration, or repair of said public
buildings or public works’, approved August 24, 1935 (49
Stat. 793)’’ on authority of Pub. L. 107–217, § 5(c), Aug.
21, 2002, 116 Stat. 1303, the first section of which enacted
Title 40, Public Buildings, Property, and Works.
In subsec. (k)(3), ‘‘section 1342 of title 31’’ substituted
for ‘‘section 3679(b) of the Revised Statutes (31 U.S.C.
665(b))’’ on authority of Pub. L. 97–258, § 4(b), Sept. 13,
1982, 96 Stat. 1067, the first section of which enacted
Title 31, Money and Finance.
Section 3109 of title 5, referred to in subsec. (k)(4),
substituted for ‘‘section 15 of the Administrative Expenses Act of 1946 (5 U.S.C. 55a)’’ on authority of Pub.
L. 89–554, § 7(b), Sept. 6, 1966, 80 Stat. 631, the first section of which enacted Title 5, Government Organization
and Employees.
Section 5703 of title 5, referred to in subsec. (k)(4),
substituted for ‘‘section 5 of such Act (5 U.S.C. 73b–2)’’
on authority of section 7(b) of Pub. L. 89–554, Sept. 6,
1966, 80 Stat. 631, section 1 of which enacted Title 5.
Pub. L. 110–234 and Pub. L. 110–246 made identical
amendments to this section. The amendments by Pub.
L. 110–234 were repealed by section 4(a) of Pub. L.
110–246.
PRIOR PROVISIONS
Provisions similar to those comprising subsec. (e) of
this section were contained in section 2(a) and (b) of
Pub. L. 87–550, July 25, 1962, 76 Stat. 221 (formerly classified to section 637a(a) and (b) of this title) prior to repeal thereof by section 3(b) of Pub. L. 89–409.
Prior similar provisions were contained in section 207
of act July 30, 1953, ch. 282, title II, 67 Stat. 235, as
amended by acts Aug. 9, 1955, ch. 628, §§ 2, 5, 69 Stat. 547;
Feb. 2, 1956, ch. 29, §§ 2, 3, 70 Stat. 10; Pub. L. 85–335, Feb.
22, 1958, 72 Stat. 27, which was previously classified to
this section. See Codification note set out under section 631 of this title.

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TITLE 15—COMMERCE AND TRADE
AMENDMENTS

2013—Subsec. (j)(10)(D)(i). Pub. L. 112–239 inserted
‘‘The Business Opportunity Specialist shall have a
Level I Federal Acquisition Certification in Contracting (or any successor certification) or the equivalent
Department of Defense certification, except that a
Business Opportunity Specialist serving at the time of
the date of enactment of the National Defense Authorization Act for Fiscal Year 2013 may continue to serve
as a Business Opportunity Specialist for a period of 5
years beginning on that date of enactment without
such a certification.’’ after ‘‘to assist such Program
Participant.’’
2011—Subsec. (d)(5)(D). Pub. L. 112–74 substituted ‘‘7
years’’ for ‘‘three years’’.
2010—Subsec. (a)(2)(A). Pub. L. 111–240, § 1206(a)(2)(A),
substituted ‘‘subparagraphs (B), (D), and (E)’’ for ‘‘subparagraph (B)’’ in introductory provisions.
Subsec. (a)(2)(A)(i). Pub. L. 111–240, § 1111(b)(1)(A), substituted ‘‘75 percent’’ for ‘‘90 percent’’.
Pub. L. 111–240, § 1111(a)(1)(A), substituted ‘‘90 percent’’ for ‘‘75 percent’’.
Subsec. (a)(2)(A)(ii). Pub. L. 111–240, § 1111(b)(1)(B),
substituted ‘‘85 percent’’ for ‘‘90 percent’’.
Pub. L. 111–240, § 1111(a)(1)(B), substituted ‘‘90 percent’’ for ‘‘85 percent’’.
Subsec. (a)(2)(C)(ii), (iii). Pub. L. 111–240, § 1206(e),
added cl. (ii) and redesignated former cl. (ii) as (iii).
Subsec. (a)(2)(D). Pub. L. 111–240, § 1206(d)(1), substituted ‘‘be’’ for ‘‘not exceed’’.
Pub. L. 111–240, § 1206(a)(2)(B), substituted ‘‘In’’ for
‘‘Notwithstanding subparagraph (A), in’’.
Subsec. (a)(2)(E). Pub. L. 111–240, § 1206(a)(2)(C), added
subpar. (E).
Subsec. (a)(3)(A). Pub. L. 111–240, § 1111(b)(2), substituted ‘‘$3,750,000’’ for ‘‘$4,500,000’’.
Pub. L. 111–240, § 1111(a)(2), substituted ‘‘$4,500,000 (or
if the gross loan amount would exceed $5,000,000’’ for
‘‘$1,500,000 (or if the gross loan amount would exceed
$2,000,000’’.
Subsec. (a)(3)(B). Pub. L. 111–240, § 1206(a)(1), substituted ‘‘$4,500,000 (or if the gross loan amount would
exceed $5,000,000), of which not more than $4,000,000’’ for
‘‘$1,750,000, of which not more than $1,250,000’’.
Subsec. (a)(14). Pub. L. 111–240, § 1206(d)(2), inserted
par. (14) and subpar. (A) headings, substituted ‘‘The Administrator’’ for ‘‘The Administration’’ in subpar. (A),
added subpar. (B), redesignated former subpars. (B) and
(C) as (C) and (D), respectively, and inserted headings,
and substituted ‘‘The Administrator’’ for ‘‘The Administration’’ in subpar. (D) as redesignated.
Subsec. (a)(16)(A). Pub. L. 111–240, § 1206(b)(1), struck
out ‘‘in’’ before dash at end of introductory provisions.
Subsec. (a)(16)(A)(i). Pub. L. 111–240, § 1206(b)(2), inserted ‘‘in’’ after cl. (i) designation and struck out ‘‘or’’
at end.
Subsec. (a)(16)(A)(ii). Pub. L. 111–240, § 1206(b)(3), inserted ‘‘in’’ after cl. (ii) designation and substituted
‘‘, including any debt that qualifies for refinancing
under any other provision of this subsection; or’’ for period at end.
Subsec. (a)(16)(A)(iii). Pub. L. 111–240, § 1206(b)(4),
added cl. (iii).
Subsec. (a)(16)(B). Pub. L. 111–240, § 1206(c), designated
existing provisions as cl. (i), inserted cl. (i) heading,
substituted ‘‘Except as provided in clause (ii), each
loan’’ for ‘‘Each loan’’, and added cl. (ii).
Subsec. (a)(16)(F). Pub. L. 111–240, § 1206(g), added subpar. (F).
Subsec. (a)(31)(D). Pub. L. 111–240, § 1135(b), substituted ‘‘$350,000’’ for ‘‘$1,000,000’’.
Pub. L. 111–240, § 1135(a), substituted ‘‘$1,000,000’’ for
‘‘$350,000’’.
Subsec. (a)(32), (33). Pub. L. 111–240, § 1133(a)(1), redesignated par. (32), relating to increased veteran participation program, as (33).
Subsec. (a)(34). Pub. L. 111–240, § 1133(b), redesignated
par. (35) as (34) and struck out former par. (34) which related to floor plan financing program.

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Pub. L. 111–240, § 1133(a)(2), added par. (34).
Subsec. (a)(35). Pub. L. 111–240, § 1206(f), added par.
(35).
Pub. L. 111–240, § 1133(b)(2), redesignated par. (35) as
(34).
Subsec. (l). Pub. L. 111–240, § 1131(a), added subsec. (l)
and struck out former subsec. (l) which read ‘‘[RESERVED]’’.
Subsec. (m)(1)(B)(iii). Pub. L. 111–240, § 1113(1), substituted ‘‘$50,000’’ for ‘‘$35,000’’.
Subsec. (m)(3)(B). Pub. L. 111–240, § 1401(c)(1)(A),
struck out cl. (i) designation and heading, substituted
‘‘As’’ for ‘‘Subject to clause (ii), as’’, and struck out cl.
(ii) relating to waiver of non-Federal share.
Pub. L. 111–240, § 1401(a)(1), designated existing provisions as cl. (i) and inserted cl. (i) heading, substituted
‘‘Subject to clause (ii), as a condition’’ for ‘‘As a condition’’ and ‘‘the Administrator’’ for ‘‘the Administration’’, and added cl. (ii).
Subsec. (m)(3)(C). Pub. L. 111–240, § 1113(2)(A), substituted ‘‘$5,000,000’’ for ‘‘$3,500,000’’.
Subsec. (m)(3)(E). Pub. L. 111–240, § 1113(2)(B), substituted ‘‘$50,000’’ for ‘‘$35,000’’ in two places.
Subsec. (m)(4)(B). Pub. L. 111–240, § 1401(c)(1)(B),
struck out cl. (i) designation and heading, substituted
‘‘As’’ for ‘‘Subject to clause (ii), as’’, and struck out cl.
(ii) relating to waiver of non-Federal share.
Pub. L. 111–240, § 1401(a)(2), designated existing provisions as cl. (i), inserted cl. (i) heading, substituted
‘‘Subject to clause (ii), as a condition of a grant made
under subparagraph (A), the Administrator shall require’’ for ‘‘As a condition of any grant made under
subparagraph (A), the Administration shall require’’,
and added cl. (ii).
Subsec. (m)(11)(B). Pub. L. 111–240, § 1113(3), substituted ‘‘$50,000’’ for ‘‘$35,000’’.
2008—Subsec. (a)(32). Pub. L. 110–186, § 208, added par.
(32) relating to increased veteran participation program.
Subsec. (b). Pub. L. 110–246, § 12078(c)(2), in concluding
provisions substituted ‘‘paragraphs (1) and (2)’’ for
‘‘paragraphs (1), (2), and (4)’’ and ‘‘paragraph (1) (2)’’ for
‘‘paragraph (1), (2), or (4)’’.
Pub. L. 110–246, § 12078(c)(1), substituted ‘‘the Administration’’ for ‘‘the, Administration’’ in introductory
provisions.
Pub. L. 110–246, § 12068(b)(2)(B), which directed amendment of ‘‘the undesignated matter following paragraph
(3)’’ by substituting ‘‘Notwithstanding any other provision of law, and except as provided in subsection (d),
the interest rate on the Administration’s share of any
loan made under subsection (b)’’ for ‘‘Notwithstanding
the provisions of any other law the interest rate on the
Administration’s share of any loan made under subsection (b) except as provided in subsection (c),’’ was
executed by making the substitution for ‘‘Notwithstanding the provisions of any other law, the interest
rate on the Administration’s share of any loan made
under subsection (b), except as provided in subsection
(c),’’ in concluding provisions after par. (6), to reflect
the probable intent of Congress and the addition of
pars. (4) to (6) by Pub. L. 110–246, §§ 12063(a), 12066(a). See
below.
Pub. L. 110–246, § 12068(b)(2)(A), which directed amendment of ‘‘the undesignated matter following paragraph
(3)’’ by substituting ‘‘That the provisions of paragraph
(1) of subsection (d)’’ for ‘‘That the provisions of paragraph (1) of subsection (c)’’, was executed by making
the substitution in concluding provisions after par. (6),
to reflect the probable intent of Congress and the addition of pars. (4) to (6) by Pub. L. 110–246, §§ 12063(a),
12066(a). See below.
Subsec. (b)(1)(A). Pub. L. 110–246, § 12078(b)(1), inserted
‘‘of the aggregate costs of such damage or destruction
(whether or not compensated for by insurance or otherwise)’’ after ‘‘20 per centum’’.
Subsec. (b)(2). Pub. L. 110–246, § 12061(a)(1), in introductory provisions inserted ‘‘, private nonprofit organization,’’ after ‘‘small business concern’’ and ‘‘, the organization,’’ after ‘‘the concern’’.

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Subsec. (b)(2)(A). Pub. L. 110–246, § 12063(c)(2), substituted ‘‘Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.)’’ for ‘‘Disaster Relief and Emergency Assistance Act’’.
Subsec. (b)(2)(D). Pub. L. 110–246, § 12061(a)(2), inserted
‘‘, private nonprofit organizations,’’ after ‘‘small business concerns’’.
Subsec. (b)(3)(C). Pub. L. 110–186, § 201(a), substituted
‘‘1 year’’ for ‘‘90 days’’ and inserted at end ‘‘The Administrator may, when appropriate (as determined by the
Administrator), extend the ending date specified in the
preceding sentence by not more than 1 year.’’
Subsec. (b)(3)(E). Pub. L. 110–246, § 12077, inserted ‘‘, or
have become due to changed economic circumstances,’’
after ‘‘constitutes’’.
Subsec. (b)(3)(G), (H). Pub. L. 110–186, §§ 203, 204, added
subpars. (G) and (H).
Subsec. (b)(4), (5). Pub. L. 110–246, § 12063(a), added
pars. (4) and (5).
Subsec. (b)(6). Pub. L. 110–246, § 12066(a), added par. (6).
Subsec. (b)(7). Pub. L. 110–246, § 12074(a), added par. (7).
Subsec. (b)(8). Pub. L. 110–246, § 12078(a), added par. (8).
Subsec. (b)(9). Pub. L. 110–246, § 12081, added par. (9).
Subsec. (b)(9)(C), (D). Pub. L. 110–246, § 12082, added
subpars. (C) and (D).
Subsec. (c). Pub. L. 110–246, § 12083(a), added subsec.
(c).
Pub. L. 110–246, § 12068(a)(1), redesignated subsec. (c)
as (d).
Subsec. (c)(5)(C). Pub. L. 110–246, § 12061(b), inserted
‘‘, private nonprofit organization,’’ after ‘‘business’’.
Subsec. (c)(6). Pub. L. 110–246, § 12065, substituted
‘‘$14,000 or less (or such higher amount as the Administrator determines appropriate in the event of a major
disaster)’’ for ‘‘$10,000 or less’’.
Subsecs. (d) to (f). Pub. L. 110–246, § 12068(a), redesignated subsecs. (c) and (d) as (d) and (e), respectively,
and added subsec. (f).
Subsec. (g). Pub. L. 110–246, § 12070, added subsec. (g).
2007—Subsec. (a)(31)(F). Pub. L. 110–140, § 1201, added
subpar. (F).
Subsec. (a)(32). Pub. L. 110–140, § 1202, added par. (32).
2006—Subsec. (b)(2). Pub. L. 109–163, § 845(a)(2)(A), in
introductory provisions, inserted ‘‘(including drought),
with respect to both farm-related and nonfarm-related
small business concerns,’’ before ‘‘if the Administration’’.
Subsec. (b)(2)(B). Pub. L. 109–163, § 845(a)(2)(B), substituted ‘‘section 1961 of title 7, in which case, assistance under this paragraph may be provided to farm-related and nonfarm-related small business concerns,
subject to the other applicable requirements of this
paragraph’’ for ‘‘the Consolidated Farmers Home Administration Act of 1961 (7 U.S.C. 1961)’’.
Subsec. (b)(2)(D). Pub. L. 109–163, § 845(c), substituted
‘‘Not later than 30 days after the date of receipt of such
certification by a Governor of a State, the Administration shall respond in writing to that Governor on its
determination and the reasons therefore, and may’’ for
‘‘Upon receipt of such certification, the Administration
may’’.
2004—Subsec. (a)(3)(A). Pub. L. 108–447, § 103(a), substituted ‘‘$1,500,000’’ for ‘‘$1,000,000’’.
Subsec. (a)(3)(B). Pub. L. 108–447, § 107(b), substituted
‘‘$1,750,000’’ for ‘‘$1,250,000’’ and ‘‘$1,250,000’’ for
‘‘$750,000’’.
Subsec. (a)(16). Pub. L. 108–447, § 107(a), inserted heading and amended par. (16) generally. Prior to amendment, par. (16) provided that the Administration could
guarantee loans to assist any eligible small business
concern in an industry engaged in or adversely affected
by international trade in the financing of the acquisition, construction, renovation, modernization, improvement or expansion of productive facilities or
equipment to be used in the United States in the production of goods and services involved in international
trade.
Subsec. (a)(18)(A). Pub. L. 108–447, § 102(a), amended
heading and text of subpar. (A) generally. Prior to
amendment, text read as follows: ‘‘With respect to each

§ 636

loan guaranteed under this subsection (other than a
loan that is repayable in 1 year or less), the Administration shall collect a guarantee fee, which shall be
payable by the participating lender, and may be
charged to the borrower, as follows:
‘‘(i) A guarantee fee equal to 2 percent of the deferred participation share of a total loan amount that
is not more than $150,000.
‘‘(ii) A guarantee fee equal to 3 percent of the deferred participation share of a total loan amount that
is more than $150,000, but not more than $700,000.
‘‘(iii) A guarantee fee equal to 3.5 percent of the deferred participation share of a total loan amount that
is more than $700,000.’’
Subsec. (a)(18)(C). Pub. L. 108–447, § 102(b), struck out
heading and text of subpar. (C). Text read as follows:
‘‘With respect to loans approved during the 2-year period beginning on October 1, 2002, the guarantee fee
under subparagraph (A) shall be as follows:
‘‘(i) A guarantee fee equal to 1 percent of the deferred participation share of a total loan amount that
is not more than $150,000.
‘‘(ii) A guarantee fee equal to 2.5 percent of the deferred participation share of a total loan amount that
is more than $150,000, but not more than $700,000.
‘‘(iii) A guarantee fee equal to 3.5 percent of the deferred participation share of a total loan amount that
is more than $700,000.’’
Subsec. (a)(23). Pub. L. 108–447, § 102(c)(1), substituted
‘‘Yearly’’ for ‘‘Annual’’ in heading.
Subsec. (a)(23)(A). Pub. L. 108–447, § 102(c)(2), added
subpar. (A) and struck out heading and text of former
subpar. (A). Text read as follows: ‘‘With respect to each
loan guaranteed under this subsection, the Administration shall, in accordance with such terms and procedures as the Administration shall establish by regulation, assess and collect an annual fee in an amount
equal to 0.5 percent of the outstanding balance of the
deferred participation share of the loan. With respect
to loans approved during the 2-year period beginning on
October 1, 2002, the annual fee assessed and collected
under the preceding sentence shall be in an amount
equal to 0.25 percent of the outstanding balance of the
deferred participation share of the loan.’’
Subsec. (a)(23)(B). Pub. L. 108–447, § 102(c)(3), substituted ‘‘yearly’’ for ‘‘annual’’.
Subsec. (a)(23)(C). Pub. L. 108–447, § 102(c)(4), added
subpar. (C).
Subsec. (a)(31). Pub. L. 108–447, § 101(a), added par. (31).
2001—Subsec. (a)(18)(C). Pub. L. 107–100, § 6(a)(1), added
subpar. (C).
Subsec. (a)(23)(A). Pub. L. 107–100, § 6(a)(2), inserted at
end ‘‘With respect to loans approved during the 2-year
period beginning on October 1, 2002, the annual fee assessed and collected under the preceding sentence shall
be in an amount equal to 0.25 percent of the outstanding balance of the deferred participation share of the
loan.’’
2000—Subsec. (a)(2)(A)(i). Pub. L. 106–554, § 1(a)(9)
[title II, § 202(1)], substituted ‘‘$150,000’’ for ‘‘$100,000’’.
Subsec. (a)(2)(A)(ii). Pub. L. 106–554, § 1(a)(9) [title II,
§ 202(2)], substituted ‘‘85 percent’’ for ‘‘80 percent’’ and
‘‘$150,000’’ for ‘‘$100,000’’.
Subsec. (a)(3)(A). Pub. L. 106–554, § 1(a)(9) [title II,
§ 203], substituted ‘‘$1,000,000 (or if the gross loan
amount would exceed $2,000,000),’’ for ‘‘$750,000,’’.
Subsec. (a)(4). Pub. L. 106–554, § 1(a)(9) [title II,
§ 205(1)], inserted heading and struck out former heading ‘‘Interest rates and fees.—’’.
Subsec. (a)(4)(B)(iii). Pub. L. 106–554, § 1(a)(9) [title II,
§ 204], added cl. (iii).
Subsec. (a)(4)(C). Pub. L. 106–554, § 1(a)(9) [title II,
§ 205(2)], added subpar. (C).
Subsec. (a)(18). Pub. L. 106–554, § 1(a)(9) [title II, § 206],
amended heading and text of par. (18) generally, substituting present provisions for provisions which had
authorized guarantee fee in an amount equal to sum of
3 percent of amount of deferred participation share of
loan that was less than or equal to $250,000, if deferred
participation share of loan exceeded $250,000, plus 3.5

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TITLE 15—COMMERCE AND TRADE

percent of difference between $500,000 or total deferred
participation share of loan, whichever was less, and
$250,000, plus, if deferred participation share of loan exceeded $500,000, 3.875 percent of difference between total
deferred participation share of loan and $500,000, and
set forth provisions relating to exception for certain
loans.
Subsec. (a)(28). Pub. L. 106–554, § 1(a)(9) [title II, § 207],
added par. (28).
Subsec. (a)(29). Pub. L. 106–554, § 1(a)(9) [title II,
§ 208(a)], added par. (29).
Subsec. (a)(30). Pub. L. 106–554, § 1(a)(9) [title VIII,
§ 802(a)], added par. (30).
Subsec. (m)(1)(A)(iii)(I). Pub. L. 106–554, § 1(a)(9) [title
II, § 210(a)(2)], substituted ‘‘$10,000’’ for ‘‘$7,500’’.
Subsec. (m)(1)(B)(iii). Pub. L. 106–554, § 1(a)(9) [title II,
§ 210(a)(1)], substituted ‘‘$35,000’’ for ‘‘$25,000’’.
Subsec. (m)(3)(A)(ii). Pub. L. 106–554, § 1(a)(9) [title II,
§ 210(a)(2)], substituted ‘‘$10,000’’ for ‘‘$7,500’’.
Subsec. (m)(3)(E). Pub. L. 106–554, § 1(a)(9) [title II,
§ 210(a)(1), (3)], substituted ‘‘$20,000’’ for ‘‘$15,000’’ and
‘‘$35,000’’ for ‘‘$25,000’’ in two places.
Subsec. (m)(4)(C)(i). Pub. L. 106–554, § 1(a)(9) [title II,
§ 210(a)(2)], which directed the amendment of subsec.
(m)(4)(C)(i)(II) by substituting ‘‘$10,000’’ for ‘‘$7,500’’,
was executed by making the substitution in subsec.
(m)(4)(C)(i) to reflect the probable intent of Congress
and the termination of the temporary amendment by
Pub. L. 103–403, § 208(a)(2), (c). See 1994 Amendment note
and Effective and Termination Dates of 1994 Amendment note below.
Subsec. (m)(5)(A). Pub. L. 106–554, § 1(a)(9) [title II,
§ 210(a)(4)], substituted ‘‘55 grants’’ for ‘‘25 grants’’ and
‘‘$200,000’’ for ‘‘$125,000’’.
Subsec. (m)(6)(B). Pub. L. 106–554, § 1(a)(9) [title II,
§ 210(a)(5)], substituted ‘‘$15,000’’ for ‘‘$10,000’’.
Subsec. (m)(7)(A). Pub. L. 106–554, § 1(a)(9) [title II,
§ 210(a)(6)], added subpar. (A) and struck out heading
and text of former subpar. (A). Text read as follows:
‘‘During the program authorized by this subsection, the
Administration may fund, on a competitive basis, not
more than 200 microloan programs.’’
Subsec. (m)(11)(B). Pub. L. 106–554, § 1(a)(9) [title II,
§ 210(b)], substituted ‘‘$35,000’’ for ‘‘$25,000’’.
1999—Subsec. (a)(10). Pub. L. 106–50, § 401(b), inserted
‘‘guaranteed’’ after ‘‘provide’’ and ‘‘, including servicedisabled veterans,’’ after ‘‘handicapped individual’’.
Subsec. (a)(21)(A)(ii). Pub. L. 106–50, § 404, inserted ‘‘or
a veteran’’ after ‘‘qualified individual’’.
Subsec. (a)(27). Pub. L. 106–8, § 3(a), (c), temporarily
added par. (27) relating to Year 2000 computer problem
program. See Effective and Termination Dates of 1999
Amendments note below.
Subsec. (b)(1)(C). Pub. L. 106–24, § 1(a), added subpar.
(C).
Subsec. (b)(3). Pub. L. 106–50, § 402(b), added par. (3).
Subsec. (m)(1)(A)(i). Pub. L. 106–50, § 403, inserted
‘‘veteran (within the meaning of such term under section 632(q) of this title),’’ after ‘‘low-income,’’.
Subsec. (m)(3)(D). Pub. L. 106–22, § 3, struck out subpar. (D) heading and amended text generally. Prior to
amendment, text read as follows: ‘‘The Administration
shall, by regulation, require each intermediary to establish a loan loss reserve fund, and to maintain such
reserve fund until all obligations owed to the Administration under this subsection are repaid. The Administration shall require the loan loss reserve fund to be
maintained—
‘‘(i) during the initial 5 years of the intermediary’s
participation in the program under this subsection,
at a level equal to not more than 15 percent of the
outstanding balance of the notes receivable owed to
the intermediary; and
‘‘(ii) in each year of participation thereafter, at a
level equal to not more than the greater of—
‘‘(I) 2 times an amount reflecting the total losses
of the intermediary as a result of participation in
the program under this subsection, as determined
by the Administrator on a case-by-case basis; or
‘‘(II) 10 percent of the outstanding balance of the
notes receivable owed to the intermediary.’’

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Subsec. (m)(7)(B). Pub. L. 106–22, § 2(1), added subpar.
(B) and struck out heading and text of former subpar.
(B). Text read as follows: ‘‘During any fiscal year, a
State shall not receive new loan funds from the Administration that exceed 125 percent of the State’s pro rata
share of the microloan program authorization during
such fiscal year, such share to be based on the population of the State, as compared to the total population
of the United States. If, however, at the beginning of
the fourth quarter of a fiscal year the Administration
determines that a portion of appropriated microloan
funds are unlikely to be awarded during that year, the
Administration may make additional funds available
to a State in excess of 125 percent of the pro rata share
of that State.’’
Subsec. (m)(8). Pub. L. 106–22, § 2(2), inserted ‘‘and
providing funding to intermediaries’’ after ‘‘program
applicants’’ and ‘‘and provide funding to’’ after ‘‘shall
select’’.
Subsec. (n). Pub. L. 106–50, § 402(a), added subsec. (n).
1998—Subsec. (j)(13)(E). Pub. L. 105–277, § 101(f) [title
VIII, § 405(f)(9)], struck out ‘‘the Job Training Partnership Act or’’ before ‘‘title I of the Workforce’’ in introductory provisions.
Pub. L. 105–277, § 101(f) [title VIII, § 405(d)(10)], substituted ‘‘the Job Training Partnership Act or title I of
the Workforce Investment Act of 1998’’ for ‘‘the Job
Training Partnership Act (29 U.S.C. 1501 et seq.)’’.
1997—Subsec. (a). Pub. L. 105–135, § 231(1), inserted
heading.
Subsec. (a)(1). Pub. L. 105–135, § 231(2), inserted heading, designated existing provisions as subpar. (A) and
inserted heading, and added subpar. (B).
Subsec. (a)(8). Pub. L. 105–135, § 706, added par. (8).
Subsec. (m). Pub. L. 105–135, § 201(c), struck out
‘‘Demonstration’’ and ‘‘demonstration’’ wherever appearing in heading and text.
Subsec. (m)(1)(A)(iv). Pub. L. 105–135, § 202(a)(1), added
cl. (iv).
Subsec. (m)(3)(C). Pub. L. 105–135, § 201(a), substituted
‘‘$3,500,000’’ for ‘‘$2,500,000’’.
Subsec. (m)(3)(D)(i), (ii). Pub. L. 105–135, § 201(b),
added cls. (i) and (ii) and struck out former cls. (i) and
(ii) which read as follows:
‘‘(i) in the first year of the intermediary’s participation in the demonstration program, at a level equal to
not more than 15 percent of the outstanding balance of
the notes receivable owed to the intermediary; and
‘‘(ii) in each year of participation thereafter, at a
level reflecting the intermediary’s total losses as a result of participation in the demonstration program, as
determined by the Administration on a case-by-case
basis, but in no case shall the required level exceed 15
percent of the outstanding balance of the notes receivable owed to the intermediary under the program.’’
Subsec. (m)(4)(E). Pub. L. 105–135, § 201(d)(1), designated existing provisions as cl. (i), inserted heading,
substituted ‘‘25 percent’’ for ‘‘15 percent’’, and added cl.
(ii).
Subsec. (m)(4)(F). Pub. L. 105–135, § 202(a)(2), added
subpar. (F).
Subsec. (m)(5)(A). Pub. L. 105–135, § 201(d)(2), struck
out ‘‘in each of the 5 years of the demonstration program established under this subsection,’’ after ‘‘requirements of subparagraph (B),’’ and substituted ‘‘annually’’ for ‘‘for terms of up to 5 years’’.
Subsec. (m)(6)(E). Pub. L. 105–135, § 202(a)(3), added
subpar. (E).
Subsec. (m)(9). Pub. L. 105–135, § 202(a)(4)(A), substituted ‘‘Grants for management, marketing, technical assistance, and related services’’ for ‘‘Technical
assistance for intermediaries’’ in heading.
Subsec. (m)(9)(C). Pub. L. 105–135, § 202(a)(4)(B), added
subpar. (C).
Subsec. (m)(12). Pub. L. 105–135, § 201(c)(4), substituted
‘‘1998 through 2000’’ for ‘‘1995 through 1997’’.
Subsec. (m)(13). Pub. L. 105–135, § 202(a)(5), added par.
(13).
1996—Subsec. (a)(2)(C)(ii)(II). Pub. L. 104–208, § 103(a),
amended subcl. (II) generally. Prior to amendment,

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subcl. (II) read as follows: ‘‘authority to service and liquidate such loans.’’
Subsec. (a)(2)(D). Pub. L. 104–208, § 111, added subpar.
(D).
Subsec. (a)(4). Pub. L. 104–208, § 103(f), inserted par. (4)
heading, designated existing text as subpar. (A) and inserted heading, and added subpar. (B).
Subsec. (a)(19)(C). Pub. L. 104–208, § 103(b), added subpar. (C).
Subsec. (a)(25). Pub. L. 104–208, § 103(c), added par. (25).
Subsec. (a)(26). Pub. L. 104–208, § 103(d), added par. (26).
Subsec. (d). Pub. L. 104–208, § 107(a), struck out ‘‘(1)’’
before ‘‘The Administration’’ and struck out par. (2)
which read as follows: ‘‘The Administration is authorized to hold seminars throughout the Nation to make
potential applicants aware of the opportunities available under this subsection and related government energy programs, and to make grants to qualified organizations to provide training seminars for small business
concerns regarding practical and easily implemented
methods for design, manufacture, installation, and
servicing of equipment and for providing services listed
in paragraph (1) of this subsection, except that recipients of loans made pursuant to this subsection shall
not subsequently be eligible for such grants.’’
Subsec. (e). Pub. L. 104–208, § 107(b), amended subsec.
(e) generally, substituting ‘‘(e) [RESERVED]’’ for prior
provisions of subsec. (e) which read as follows: ‘‘The
Administration also is empowered to make loans (either directly or in cooperation with banks or other
lenders through agreements to participate on an immediate or deferred basis) to assist any firm to adjust to
changed economic conditions resulting from increased
competition from imported articles, but only if (1) an
adjustment proposal of such firm has been certified by
the Secretary of Commerce pursuant to the Trade Expansion Act of 1962, (2) the Secretary has referred such
proposal to the Administration under that Act and the
loan would provide part or all of the financial assistance necessary to carry out such proposal, and (3) the
Secretary’s certification is in force at the time the Administration makes the loan. With respect to loans
made under this subsection the Administration shall
apply the provisions of sections 314, 315, 316, 318, 319,
and 320 of the Trade Expansion Act of 1962 as though
such loans had been made under section 314 of that
Act.’’
Subsec. (f). Pub. L. 104–208, § 107(c), amended subsec.
(f) generally, substituting ‘‘(f) [RESERVED]’’ for prior
provisions of subsec. (f) which read as follows: ‘‘In the
administration of the disaster loan program under subsection (b)(1) of this section, in the case of property
loss or damage as a result of a disaster which is a
‘major disaster’ as defined in section 102(2) of the Disaster Relief and Emergency Assistance Act, the Small
Business Administration, to the extent such loss or
damage is not compensated for by insurance or otherwise, may lend to a privately owned college or university without regard to whether the required financial
assistance is otherwise available from private sources,
and may waive interest payments and defer principal
payments on such a loan for the first three years of the
term of the loan.’’
Subsec. (l). Pub. L. 104–208, § 107(c), amended subsec.
(l) generally, substituting ‘‘(l) [RESERVED]’’ for prior
provisions of subsec. (l) which consisted of 9 pars. authorizing loans to small business concerns for solar energy and energy conservation measures.
Subsec. (m)(7)(B). Pub. L. 104–208, § 105, inserted at
end ‘‘If, however, at the beginning of the fourth quarter
of a fiscal year the Administration determines that a
portion of appropriated microloan funds are unlikely to
be awarded during that year, the Administration may
make additional funds available to a State in excess of
125 percent of the pro rata share of that State.’’
1995—Subsec. (a)(2). Pub. L. 104–36, § 2, amended par.
(2) generally. Prior to amendment, par. (2) related to
percentage levels in loan participation agreements.
Subsec. (a)(18). Pub. L. 104–36, § 3(a), amended par. (18)
generally. Prior to amendment, par. (18) read as fol-

§ 636

lows: ‘‘The Administration shall collect a guarantee fee
equal to two percent of the amount of the deferred participation share of any loan under this subsection other
than a loan repayable in one year or less. The fee shall
be payable by the participating lending institution and
may be charged to the borrower.’’
Subsec. (a)(19)(B). Pub. L. 104–36, § 3(b)(1), substituted
‘‘shall develop’’ for ‘‘shall (i) develop’’ and struck out
at end ‘‘, and (ii) allow such lenders to retain one-half
of the fee collected pursuant to subsection (a)(18) of
this section on such loans. A participating lender may
not retain any fee pursuant to this paragraph if the
amount committed and outstanding to the applicant
would exceed $50,000 unless the amount in excess of
$50,000 is an amount not approved under the provisions
of this paragraph’’.
Subsec. (a)(19)(C). Pub. L. 104–36, § 3(b)(2), struck out
subpar. (C) which read as follows: ‘‘In order to encourage lending institutions and other entities making
loans authorized under this subsection to provide loans
to small business loan applicants located in rural areas,
such lenders shall be permitted to retain one-half of the
fee collected pursuant to paragraph (18) on loans of less
than $75,000. A participating lender may not retain any
fee pursuant to this subparagraph if the amount committed and outstanding to the applicant would exceed
$75,000 unless the amount in excess of $75,000 is an
amount not approved under the provisions of this subparagraph. This subparagraph shall cease to be effective on October 1, 1995.’’
Subsec. (a)(23). Pub. L. 104–36, § 4(a), added par. (23).
Subsec. (a)(24). Pub. L. 104–36, § 5, added par. (24).
1994—Subsec. (a)(2)(B)(iv). Pub. L. 103–403, § 211,
amended cl. (iv) generally. Prior to amendment, cl. (iv)
read as follows: ‘‘not less than 85 percent of the financing outstanding at the time of disbursement if such financing is a loan under paragraph (16).’’
Subsec. (a)(3)(B). Pub. L. 103–403, § 210, amended subpar. (B) generally. Prior to amendment, subpar. (B)
read as follows: ‘‘if the total amount outstanding and
committed (on a deferred basis) solely for the purposes
provided in paragraph (16) to the borrower from the
business loan and investment fund established by this
chapter would exceed $1,000,000, such amount to be in
addition to any financing solely for working capital,
supplies, or revolving lines of credit for export purposes
up to a maximum of $250,000; and’’.
Subsec. (a)(14)(A). Pub. L. 103–403, § 209, amended subpar. (A) generally. Prior to amendment, subpar. (A)
read as follows: ‘‘The Administration under this subsection may provide extensions and revolving lines of
credit for export purposes and financing to enable small
business concerns, including small business export
trading companies and small business export management companies, to develop foreign markets. No such
extension or revolving line of credit may be made for
a period or periods exceeding 3 years. A bank or participating lending institution may establish the rate of interest on extensions and revolving lines of credit as
may be legal and reasonable.’’
Subsec. (a)(21)(A). Pub. L. 103–403, § 605(a), inserted
‘‘on a guaranteed basis’’ before ‘‘under the authority’’.
Subsec. (a)(21)(E). Pub. L. 103–403, § 603, added subpar.
(E).
Subsec. (m)(3)(C). Pub. L. 103–403, § 206, substituted
‘‘$2,500,000’’ for ‘‘$1,250,000’’.
Subsec. (m)(4)(B). Pub. L. 103–403, § 208(a)(1), (c), temporarily inserted ‘‘except for a grant made to an intermediary that provides not less than 50 percent of its
loans to small business concerns located in or owned by
one or more residents of an economically distressed
area,’’ after ‘‘under subparagraph (A),’’. See Effective
and Termination Dates of 1994 Amendment note below.
Subsec. (m)(4)(C)(i). Pub. L. 103–403, § 208(a)(2), (c),
temporarily added cl. (i) which read as follows: ‘‘In addition to grants made under subparagraph (A), each
intermediary shall be eligible to receive a grant equal
to 5 percent of the total outstanding balance of loans
made to the intermediary under this subsection if—
‘‘(I) the intermediary provides not less than 25 percent of its loans to small business concerns located in

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TITLE 15—COMMERCE AND TRADE

or owned by one or more residents of an economically
distressed area; or
‘‘(II) the intermediary has a portfolio of loans made
under this subsection that averages not more than
$7,500 during the period of the intermediary’s participation in the program.’’
See Effective and Termination Dates of 1994 Amendment note below.
Subsec. (m)(4)(E). Pub. L. 103–403, § 207, added subpar.
(E).
Subsec. (m)(7). Pub. L. 103–403, § 204, amended par. (7)
generally, substituting present provisions for former
provisions relating to program funding, which provided
for: in subpar. (A), first year programs; in subpar. (B),
expanded programs; and in subpar. (C), State limitations.
Subsec. (m)(8). Pub. L. 103–403, § 205, amended heading
and text of par. (8) generally. Prior to amendment, text
read as follows: ‘‘In funding microloan programs, the
Administration shall ensure that at least one-half of
the programs funded under this subsection will provide
microloans to small business concerns located in rural
areas.’’
Subsec. (m)(9)(B). Pub. L. 103–403, § 604, inserted ‘‘and
loan guarantees’’ after ‘‘for loans’’ and ‘‘and national
and regional nonprofit organizations that have demonstrated experience in providing training support for
microenterprise development and financing.’’ after ‘‘experienced microlending organizations’’.
Subsec. (m)(11)(A)(v). Pub. L. 103–403, § 202, added cl.
(v).
Subsec. (m)(11)(D). Pub. L. 103–403, § 208(b), (c), temporarily added subpar. (D) which read as follows: ‘‘the
term ‘economically distressed area’, as used in paragraph (4), means a county or equivalent division of
local government of a State in which the small business concern is located, in which, according to the most
recent data available from the Bureau of the Census,
Department of Commerce, not less than 40 percent of
residents have an annual income that is at or below the
poverty level.’’. See Effective and Termination Dates of
1994 Amendment note below.
Subsec. (m)(12). Pub. L. 103–403, § 201, added par. (12).
1993—Subsec. (a)(2). Pub. L. 103–81, § 5(a)(2)–(4), in concluding provisions, substituted ‘‘less than the above
specified percentums’’ for ‘‘less than 85 percent under
subparagraph (B)’’ and ‘‘not less than 70 percent, unless
a lesser percent is required by clause (B)(ii) or upon
the’’ for ‘‘not less than 80 percent, except upon’’ and inserted after third sentence ‘‘The maximum interest
rate for a loan guaranteed under the Preferred Lenders
Program shall not exceed the maximum interest rate,
as determined by the Administration, which is made
applicable to other loan guarantees under subsection
(a) of this section.’’
Subsec. (a)(2)(B). Pub. L. 103–81, § 5(a)(1), struck out
‘‘and’’ at end of cl. (i), added cls. (ii) and (iii), and redesignated former cl. (ii) as (iv).
Subsec. (a)(22). Pub. L. 103–81, § 4, added par. (22).
Subsec. (m)(1)(B)(iii). Pub. L. 103–81, § 8(1), substituted
‘‘$25,000’’ for ‘‘$15,000’’.
Subsec. (m)(5)(A). Pub. L. 103–81, § 8(2), substituted
‘‘25 grants for terms of up to 5 years’’ for ‘‘6 grants’’.
Subsec. (m)(9)(B). Pub. L. 103–81, § 8(3), substituted ‘‘7
percent’’ for ‘‘3 percent’’.
1992—Subsec. (a)(4). Pub. L. 102–366, § 104, substituted
‘‘Notwithstanding the provisions of the constitution of
any State or the laws of any State limiting the rate or
amount of interest which may be charged, taken, received, or reserved, the maximum legal rate of interest
on any financing made on a deferred basis pursuant to
this subsection’’ for ‘‘The rate of interest on financings
made on a deferred basis shall be legal and reasonable
but’’.
Subsec. (a)(21). Pub. L. 102–366, § 211, added par. (21).
Subsec. (m)(1)(A)(i). Pub. L. 102–366, § 113(a)(1)(A),
amended cl. (i) generally, substituting ‘‘and business
owners and other such individuals’’ for ‘‘, business
owners, and other individuals’’.
Subsec. (m)(1)(A)(iii)(I). Pub. L. 102–366, § 113(a)(1)(B),
inserted ‘‘, particularly loans in amounts averaging
not more than $7,500,’’ after ‘‘small-scale loans’’.

Page 762

Subsec. (m)(3)(A). Pub. L. 102–366, § 113(a)(2), designated existing provisions as cl. (i) and inserted heading, redesignated cls. (i) to (viii) as subcls. (I) to (VIII),
respectively, substituted ‘‘economic, poverty, and unemployment’’ for ‘‘economic and unemployment’’ in
subcl. (III), amended subcl. (VIII) generally, and added
cl. (ii). Prior to amendment, subcl. (VIII) read as follows: ‘‘any plan to involve private sector lenders in assisting selected small business concerns.’’
Subsec. (m)(3)(F). Pub. L. 102–366, § 113(a)(3), amended
subpar. (F) generally. Prior to amendment, subpar. (F)
read as follows: ‘‘Loans made by the Administration
under this subsection shall be for a term of 10 years and
at an interest rate equal to the rate determined by the
Secretary of the Treasury for obligations of the United
States with a period of maturity of 5 years, adjusted to
the nearest one-eighth of 1 percent.’’
Subsec. (m)(4)(A). Pub. L. 102–366, § 113(a)(4)(B), added
subpar. (A) and struck out former subpar. (A) which
read as follows: ‘‘Except as otherwise provided in subparagraph (C) and subject to the requirements of subparagraph (B), each intermediary that receives a loan
under subparagraph (B)(i) of paragraph (1) shall be eligible to receive a grant to provide marketing, management, and technical assistance to small business concerns that are borrowers under this subsection. In the
first and second years of an intermediary’s program
participation, each intermediary meeting the requirement of subparagraph (B) may receive a grant of not
more than 20 percent of the total outstanding balance
of loans made to it under this subsection. In the third
and subsequent years of an intermediary’s program
participation, each intermediary meeting the requirements of subparagraph (B) may receive a grant of not
more than 10 percent of the total outstanding balance
of loans made to it under this subsection.’’
Pub. L. 102–366, § 113(a)(4)(A), substituted ‘‘Except as
otherwise provided in subparagraph (C) and subject to’’
for ‘‘Subject to’’.
Subsec. (m)(4)(B). Pub. L. 102–366, § 113(a)(4)(C), substituted ‘‘25 percent’’ for ‘‘one-half’’.
Subsec. (m)(4)(C), (D). Pub. L. 102–366, § 113(a)(4)(D),
added subpars. (C) and (D).
Subsec. (m)(5)(A). Pub. L. 102–366, § 113(a)(5), substituted ‘‘6 grants’’ for ‘‘2 grants’’.
Subsec. (m)(6)(C). Pub. L. 102–366, § 113(a)(6), amended
subpar. (C) generally. Prior to amendment, subpar. (C)
read as follows: ‘‘Notwithstanding any provision of the
laws of any State or the constitution of any State pertaining to the rate or amount of interest that may be
charged, taken, received or reserved on a loan, the
maximum rate of interest to be charged on a microloan
funded under this subsection shall be not more than 4
percentage points above the prime lending rate, as
identified by the Administration and published in the
Federal Register on a quarterly basis.’’
Subsec. (m)(7)(A). Pub. L. 102–564, § 307(b)(1), inserted
at end: ‘‘If, at the end of fiscal year 1992, the Administration has funded less than 50 microloan programs
under this subparagraph, the Administration may, in
fiscal year 1993, fund a number of additional microloan
programs equal to the difference between 50 and the
number of microloan programs actually funded in fiscal
year 1992.’’
Pub. L. 102–366, § 113(a)(7)(A), substituted ‘‘60 microloan programs’’ for ‘‘35 microloan programs’’.
Subsec. (m)(7)(B). Pub. L. 102–564, § 307(b)(2), substituted ‘‘In addition to any microloan programs authorized to be funded in fiscal year 1993 in accordance
with subparagraph (A), in the second’’ for ‘‘In the second’’.
Pub. L. 102–366, § 113(a)(7)(B), substituted ‘‘50 additional’’ for ‘‘25 additional’’.
Subsec. (m)(7)(C)(i). Pub. L. 102–366, § 113(a)(7)(C),
amended cl. (i) generally. Prior to amendment, cl. (i)
read as follows: ‘‘be awarded more than 2 microloan
programs in any year of the demonstration program;’’.
Subsec.
(m)(7)(C)(ii),
(iii).
Pub.
L.
102–366,
§ 113(a)(7)(D),
(E),
substituted
‘‘$1,500,000’’
for
‘‘$1,000,000’’ in cl. (ii) and ‘‘$2,500,000’’ for ‘‘$1,500,000’’ in
cl. (iii).

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TITLE 15—COMMERCE AND TRADE

Subsec. (m)(9), (10). Pub. L. 102–366, § 113(a)(8), (9),
added par. (9) and redesignated former par. (9) as (10).
Former par. (10) redesignated (11).
Subsec. (m)(11). Pub. L. 102–564, § 307(c), inserted ‘‘private,’’ before ‘‘nonprofit’’ in subpar. (A)(ii).
Pub. L. 102–366, § 113(a)(8), (10), redesignated par. (10)
as (11) and amended subpar. (A) generally. Prior to
amendment, subpar. (A) read as follows: ‘‘the term
‘intermediary’ means a private, nonprofit entity or a
nonprofit community development corporation that
seeks to borrow or has borrowed funds from the Small
Business Administration to make microloans to small
business concerns under this subsection;’’.
1991—Subsec. (a)(18). Pub. L. 102–140, § 609(b), struck
out ‘‘or a loan under paragraph (13)’’ after ‘‘one year or
less’’.
Subsec. (a)(19)(B). Pub. L. 102–191 struck out ‘‘during
fiscal years 1989, 1990, and 1991,’’ after ‘‘small business
loan applicants,’’.
Subsec. (m). Pub. L. 102–140, § 609(h), added subsec.
(m).
1990—Subsec. (a)(14)(A). Pub. L. 101–574, § 202, struck
out ‘‘pre-export’’ before ‘‘financing’’ and substituted ‘‘3
years’’ for ‘‘18 months’’.
Subsec. (a)(16)(A). Pub. L. 101–574, § 245, struck out at
end ‘‘The lender shall agree to sell the loan in the secondary market as authorized in sections 634(f) and
634(g) of this title within 180 days of the date of disbursement.’’
Subsec. (a)(19)(C). Pub. L. 101–574, § 307, added subpar.
(C).
Subsec. (j)(3)(A). Pub. L. 101–574, § 242(1), struck out
subpar. (A), which was previously struck out by Pub. L.
100–656, § 505(h). See 1988 Amendment note below.
Subsec. (j)(3)(B). Pub. L. 101–574, § 242(1), struck out
subpar. (B) which read as follows: ‘‘The General Accounting Office shall evaluate the activities taken by
the Administration to achieve the purpose of this paragraph and evaluate the success of these activities in
achieving the purposes of this paragraph. The General
Accounting Office shall report to the Congress by January 1, 1981, and at any time thereafter at the discretion
of the Comptroller General, on the findings of this evaluation and shall make recommendations on actions
needed to improve the Administration’s performance
pursuant to this paragraph.’’
Subsec. (j)(8). Pub. L. 101–574, § 242(2), struck out par.
(8) which read as follows: ‘‘The General Accounting Office shall provide for an independent and continuing
evaluation of programs under subsections (i) and (j) of
this section and section 637(a) of this title, including
full information on, and analysis of, the character and
impact of managerial assistance provided, the location,
income characteristics, and extent to which private resources and skills have been involved in these programs. Such evaluation together with any recommendations deemed advisable by the Comptroller General shall be reported to the Congress by January 1,
1981, and at any time thereafter at the discretion of the
Comptroller General.’’
Subsec. (j)(10)(J)(ii). Pub. L. 101–574, § 204(a), amended
cl. (ii) generally. Prior to amendment, cl. (ii) read as
follows: ‘‘Except as provided under section 602 of the
Business Opportunity Development Reform Act of 1988,
no award shall be made pursuant to section 637(a) of
this title to other than a small business concern.’’
Subsec. (j)(13)(D)(iii). Pub. L. 101–574, § 206, substituted ‘‘October 1, 1994’’ for ‘‘October 1, 1992’’.
1989—Subsec. (a)(2). Pub. L. 101–162, title V, (1),
amended par. (2) generally. Prior to amendment, par.
(2) read as follows: ‘‘In agreements to participate in
loans on a deferred basis under this subsection, such
participation by the Administration, except as provided in paragraph (6), shall be:
‘‘(A) not less than 90 per centum of the balance of
the financing outstanding at the time of disbursement if such financing does not exceed $155,000; and
‘‘(B) subject to the limitation in paragraph (3)—
‘‘(i) not less than 70 per centum nor more than 85
per centum of the financing outstanding at the

§ 636

time of disbursement if such financing exceeds
$155,000 but is less than $714,285,
‘‘(ii) less than 70 per centum of the financing outstanding at the time of disbursement if such financing exceeds $714,285;
‘‘(iii) not less than 85 per centum of the financing
outstanding at the time of disbursement if such financing is a loan under paragraph (16) and is less
than $1,176,470; and
‘‘(iv) less than 85 per centum of the financing outstanding at the time of disbursement if such financing is a loan under paragraph (16) and exceeds
$1,176,470;
Provided, That the Administration shall not use the per
centum of guarantee requested as a criterion to establish priorities in approving guarantee requests nor
shall the Administration reduce the per centum guaranteed to less than 85 per centum pursuant to subparagraph (B) other than by a determination made on each
application: Provided, further, That the Administration
may reduce its participation below the per centums
stated in this paragraph if the lender requests the reduction under the preferred lenders program or any
successor thereto, but any such reduction shall not exceed five points. As used in this sentence the term ‘preferred lenders program’ means a program under which,
pursuant to a written agreement between the lender
and the Administration, the lender has been delegated
(1) complete authority to make and close loans with a
guarantee from the Administration without obtaining
the prior specific approval of the Administration, and
(2) authority to service and liquidate such loans.’’
Subsec. (a)(19). Pub. L. 101–162, title V, (2), amended
par. (19) generally. Prior to amendment, par. (19) read
as follows: ‘‘During fiscal years 1989, 1990, and 1991, in
addition to the preferred lenders program authorized by
the proviso in section 634(b)(7) of this title, the Administration is authorized to establish a certified loan program for lenders who establish their knowledge of Administration laws and regulations concerning the loan
guarantees program and their proficiency in program
requirements. In order to encourage certified lenders
and preferred lenders to provide loans of $50,000 or less
in guarantees to eligible small business loan applicants, the Administration (A) shall develop and shall
allow participating lenders in the certified loan program and in the preferred loan program to solely utilize a uniform and simplified loan form for such loans
and (B) shall allow such lenders to retain one-half of
the fee collected pursuant to subsection (a)(16) of this
section on such loans: Provided, That a participating
lender may not retain any fee pursuant to this paragraph if the amount committed and outstanding to the
applicant would exceed $50,000 unless such excess
amount was not approved under the provisions of this
paragraph. The designation of a lender as a certified
lender shall be suspended or revoked at any time that
the Administration determines that the lender is not
adhering to its rules and regulations or if the Administration determines that the loss experience of the lender is excessive as compared to other lenders: Provided
further, That any suspension or revocation of the designation shall not affect any outstanding guarantee:
And, provided further, That the Administration may not
reduce the per centum of guarantee as a criterion of
eligibility for participation in this program, except as
otherwise provided by law.’’
Subsec. (a)(20)(C)(iv). Pub. L. 101–37, § 9, inserted ‘‘is’’
before ‘‘amortized’’.
Subsec. (j)(10)(A)(i). Pub. L. 101–37, § 5(a), substituted
‘‘which set forth’’ for ‘‘which sets forth’’.
Subsec. (j)(10)(D)(i). Pub. L. 101–37, § 5(b)(1), substituted ‘‘Business Opportunity Specialist’’ for ‘‘business opportunity specialist’’.
Subsec. (j)(10)(D)(ii)(II). Pub. L. 101–37, § 5(b)(2), substituted ‘‘the small business concern’’ for ‘‘small business concerns’’.
Subsec. (j)(10)(D)(iii). Pub. L. 101–37, § 5(b)(3), inserted
‘‘relating to attaining business activity from sources
other than contracts awarded pursuant to section 637(a)
of this title’’ after ‘‘subparagraph (I)’’.

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TITLE 15—COMMERCE AND TRADE

Subsec. (j)(10)(D)(iv). Pub. L. 101–37, § 5(b)(4), substituted ‘‘contract awards’’ for ‘‘contact awards’’.
Subsec. (j)(10)(D)(iv)(I). Pub. L. 101–37, § 5(b)(5), inserted ‘‘relating to attaining business activity from
sources other than contracts awarded pursuant to section 637(a) of this title’’ after ‘‘subparagraph (I)’’.
Subsec. (j)(10)(E)(ii). Pub. L. 101–37, § 7(a)(1), substituted ‘‘completes the period of Program participation as prescribed by paragraph (15)’’ for ‘‘participates
in the Program for a period in excess of the time limits
prescribed by paragraph (15)’’.
Subsec. (j)(10)(F). Pub. L. 101–37, § 7(a)(2), struck out
subpar. (F) appearing first, which read as follows: ‘‘For
the purposes of this subsection and section 637(a) of
this title, the terms ‘terminated’ or ‘termination’ shall
mean the total denial’’.
Pub. L. 101–37, § 7(a)(3), in subpar. (F) appearing second, inserted first sentence and struck out former first
sentence which read as follows: ‘‘For the purposes of
this chapter, this subsection and section 637(a) of this
title, the terms ‘terminated’ or ‘termination’ shall
mean the total denial or suspension of assistance provided pursuant to this paragraph or section 637(a) of
this title prior to the graduation of the participating
small business concern pursuant to subparagraph (H) or
the expiration of the maximum program participation
in terms prescribed by paragraph (15).’’
Subsec. (j)(10)(I). Pub. L. 101–37, § 10(b), designated as
subpar. (I) the undesignated subpar. which followed
subpar. (H).
Pub. L. 101–37, § 10(a), made technical correction to directory language of Pub. L. 100–656, § 303(a), see 1988
Amendment note below.
Subsec. (j)(10)(J)(i). Pub. L. 101–37, § 6(a), substituted
‘‘suspended’’ for ‘‘suspended or terminated’’.
Subsec. (j)(11)(B). Pub. L. 101–37, § 4(1), added subpar.
(B) and struck out former subpar. (B) which read as follows: ‘‘Except as provided in section 602(d) of the Business Opportunity Development Reform Act of 1988, any
individual upon whom eligibility is based pursuant to
section 637(a)(4) of this title, shall be permitted to assert such eligibility for only one small business concern. Notwithstanding the provisions of the preceding
sentence, no individual who was determined pursuant
to section 637(a) of this title to be socially and economically disadvantaged before June 1, 1989, shall be
permitted to assert such disadvantage with respect to
any other concern making application for certification
after June 1, 1989.’’
Subsec. (j)(11)(E). Pub. L. 101–37, § 4(2), (3), substituted
‘‘Office of Minority Small Business’’ for ‘‘Office of the
Associate Administrator for Minority Small Business’’
and ‘‘the Associate Administrator for Minority Small
Business and Capital Ownership Development’’ for
‘‘such Associate Administrator’’.
Subsec. (j)(11)(F)(v). Pub. L. 101–37, § 4(4), substituted
‘‘to the Associate Administrator’’ for ‘‘with the Associate Administrator’’.
Subsec. (j)(11)(F)(vi). Pub. L. 101–37, § 4(5), added cl.
(vi) and struck out former cl. (vi) which read as follows:
‘‘decide protests from applicants that have been denied
program admission;’’.
Subsec. (j)(11)(F)(viii). Pub. L. 101–37, § 4(6), substituted ‘‘subparagraph (I)’’ for ‘‘subparagraph (H)’’.
Subsec. (j)(11)(G)(ii). Pub. L. 101–37, § 4(7), substituted
‘‘Participants’’ for ‘‘participants’’.
Subsec. (j)(11)(H), (I). Pub. L. 101–37, § 4(9), added subpar. (H) and redesignated former subpar. (H) as (I).
Subsec. (j)(12)(A). Pub. L. 101–37, § 8(a)(1), substituted
‘‘developmental’’ for ‘‘development’’.
Subsec. (j)(12)(B). Pub. L. 101–37, § 8(a)(2), inserted ‘‘in
its effort’’ after ‘‘to assist the concern’’.
Subsec. (j)(13)(E). Pub. L. 101–37, § 8(b), inserted second sentence and struck out former second sentence
which read as follows: ‘‘Such financial assistance may
be made without regard to section 647(a) of this title,
shall be made by way of reimbursement to the training
provider, and shall have such adjustments as may be
necessary to provide for overpayments or underpayments.’’

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1988—Subsec. (a)(2). Pub. L. 100–590, § 103, inserted
‘‘, but any such reduction shall not exceed five points’’
after ‘‘any successor thereto’’ in second proviso.
Subsec. (a)(2)(B)(iii), (iv). Pub. L. 100–418, § 8007(a)(1),
added cls. (iii) and (iv).
Subsec. (a)(3). Pub. L. 100–418, § 8007(a)(2), amended
par. (3) generally. Prior to amendment, par. (3) read as
follows: ‘‘No loan under this subsection shall be made
if the total amount outstanding and committed (by
participation or otherwise) to the borrower from the
business loan and investment fund established by this
chapter would exceed $500,000: Provided, That no such
loan made or effected either directly or in cooperation
with banks or other lending institutions through agreements to participate on an immediate basis shall exceed $350,000.’’
Subsec. (a)(12). Pub. L. 100–590, § 111(c), designated existing provisions as subpar. (A) and added subpar.
(b)[(B)].
Subsec. (a)(14). Pub. L. 100–418, § 8005, amended par.
(14) generally. Prior to amendment, par. (14) read as
follows: ‘‘The Administration under this subsection
may provide extensions and revolving lines of credit for
export purposes to enable small business concerns to
develop foreign markets and for preexport financing:
Provided, however, That no such extension or revolving
line of credit may be made for a period or periods exceeding eighteen months. A bank or participating lending institution may establish the rate of interest on extensions and revolving lines of credit as may be legal
and reasonable.’’
Subsec. (a)(16) to (18). Pub. L. 100–418, § 8007(a)(3), (4),
added pars. (16) and (17) and redesignated former par.
(16) as (18).
Subsec. (a)(19). Pub. L. 100–533 and Pub. L. 100–590,
§ 102(a), made identical amendments adding par. (19).
Subsec. (a)(20). Pub. L. 100–656, § 302, added par. (20).
Subsec. (b)(1)(A). Pub. L. 100–590, §§ 119(a), 121, substituted ‘‘natural or other disasters’’ for ‘‘floods, riots
or civil disorders, or other catastrophes’’ and inserted
proviso that Administration may increase loan up to
additional 20 per centum to protect damaged or destroyed property from possible future disasters.
Subsec. (b)(2)(A). Pub. L. 100–707, § 109(f)(1), substituted ‘‘the Disaster Relief and Emergency Assistance Act’’ for ‘‘the Act entitled ‘An Act to authorize
Federal assistance to States and local governments in
major disasters, and for other purposes’, approved September 30, 1950, as amended (42 U.S.C. 1855–1855g)’’.
Subsec. (b)(E). Pub. L. 100–707, § 109(f)(2), substituted
‘‘section 312(a) of the Disaster Relief and Emergency
Assistance Act’’ for ‘‘subsection (b) of section 315 of
Public Law 93–288 (42 U.S.C. 5155)’’.
Subsec. (c)(5)(C). Pub. L. 100–590, § 120(b), substituted
‘‘business or other concern, including agricultural cooperatives,’’ for ‘‘business concern’’.
Subsec. (c)(6). Pub. L. 100–590, § 122, substituted ‘‘refinancing: Provided further, That the Administration
shall not require collateral for loans of $10,000 or less
which are made under paragraph (1) of subsection (b) of
this section’’. for ‘‘refinancing’’.
Subsec. (c)(7). Pub. L. 100–590, § 120(a), added par. (7).
Subsec. (f). Pub. L. 100–707, § 109(f)(3), substituted
‘‘section 102(2) of the Disaster Relief and Emergency
Assistance Act’’ for ‘‘section 2(a) of the Act of September 30, 1950 (42 U.S.C. 1855a(a))’’.
Subsec. (j)(3)(A). Pub. L. 100–656, § 505(h), struck out
subpar. (A) which read as follows: ‘‘An advisory committee composed of five high-level officers from five
United States businesses and five representatives of
minority small businesses shall be created to facilitate
the achievement of the purposes of this paragraph. The
members of the advisory committee shall be appointed
by the President. The chairman of the advisory committee, who shall be designated by the President shall
report annually to the President and to the Congress on
the activities of the advisory committee.’’
Subsec. (j)(10)(A)(i). Pub. L. 100–656, § 205(a), amended
cl. (i) generally. Prior to amendment, cl. (i) read as follows: ‘‘assist small business concerns participating in

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the Program to develop comprehensive business plans
with specific business targets, objectives, and goals for
correcting the impairment of such concern’s ability to
compete, as determined for such concern pursuant to
section 637(a)(6) of this title, within a fixed period of
time as mutually agreed upon by the applicant and the
Administrator prior to acceptance in such program:
Provided, That not less than one year prior to the expiration of such period, and upon the request of such concern, the Administration shall review such period and
may extend such period as necessary and appropriate:
Provided further, That no determination made under
this paragraph shall be considered a denial of total participation for the purposes of section 637(a)(9) of this
title;’’.
Subsec. (j)(10)(C). Pub. L. 100–656, § 205(b)(1), (2), redesignated subpar. (D) as (C) and struck out former subpar. (C) which read as follows: ‘‘No small business concern shall receive a contract pursuant to section 637(a)
of this title unless—
‘‘(i) the business plan required pursuant to paragraph (10)(A)(i) is approved by the Administration;
and
‘‘(ii) the program is able to provide such concern
with, but not limited to, such management, technical
and financial services as may be necessary to achieve
the targets, objectives, and goals of such business.’’
Subsec. (j)(10)(D). Pub. L. 100–656, § 205(b)(2), (3), added
subpar. (D). Former subpar. (D) redesignated (C).
Pub. L. 100–656, § 203, added subpar. (D).
Subsec. (j)(10)(E) to (H). Pub. L. 100–656, § 208, added
subpars. (E) to (H).
Subsec. (j)(10)[(I)]. Pub. L. 100–656, § 303(a), as amended
by Pub. L. 101–37, § 10(a), added new subpar. without
subpar. designation, but which probably was intended
to be subpar. (I). See 1989 Amendment note above.
Subsec. (j)(10)(J). Pub. L. 100–656, § 206, added subpar.
(J).
Subsec. (j)(11). Pub. L. 100–656, § 201(a), designated existing provisions as subpar. (A) and added subpars. (B)
to (H).
Subsec. (j)(12). Pub. L. 100–656, § 301(a), added par. (12).
Subsec. (j)(13). Pub. L. 100–656, § 301(b), added par. (13).
Subsec. (j)(14). Pub. L. 100–656, § 301(c), added par. (14).
Subsec. (j)(15). Pub. L. 100–656, § 202, added par. (15).
Subsec. (j)(16). Pub. L. 100–656, § 408, added par. (16).
1986—Subsec. (a)(2). Pub. L. 99–272, § 18013, in subpar.
(A) substituted ‘‘$155,000’’ for ‘‘$100,000’’, in subpar.
(B)(i) substituted ‘‘$155,000’’ for ‘‘$100,000’’ and ‘‘85’’ for
‘‘90’’, in proviso following subpar. (B) substituted ‘‘85’’
for ‘‘90’’, and inserted a second proviso relating to reduction by the Administration of its participation
below the per centum stated in this paragraph and defining ‘‘preferred lenders program’’.
Subsec. (a)(15)(B)(i). Pub. L. 99–514 substituted ‘‘Internal Revenue Code of 1986’’ for ‘‘Internal Revenue Code
of 1954’’, which for purposes of codification was translated as ‘‘title 26’’ thus requiring no change in text.
Subsec. (a)(16). Pub. L. 99–272, § 18007, added par. (16).
Subsec. (b). Pub. L. 99–272, § 18006(a)(1), in provision
preceding par. (1) substituted ‘‘Except as to agricultural enterprises as defined in section 647(b)(1) of this
title, the,’’ for ‘‘The’’, struck out par. (3) which authorized loans, each one not to exceed $500,000, to any small
business concern to effect continuation of, additions to,
alterations in, or reestablishment in the same or a new
location of its plant, facilities, or methods or operation
caused by direct action of the Federal Government or
as a consequence of Federal Government action provided that the applicant was unable to obtain credit
elsewhere, and struck out par. (4) which authorized disaster loans, each one not to exceed $100,000, to any
small business concern located in an area of economic
dislocation that was the result of the drastic fluctuation in the value of the currency of a country contiguous to the United States and adjustments in the regulation of its monetary system if such concern was unable to obtain credit elsewhere.
Subsec. (c)(4). Pub. L. 99–272, § 18006(a)(2), struck out
provision following subpar. (D) which provided that

§ 636

loans, subject to reductions under subpars. (A) and (B)
of par. (1), be in amounts equal to 100 percent of loss if
the applicant was a homeowner and 85 percent if the
applicant was a business or otherwise, the interest rate
for loans under pars. (1) and (2) be the rate of interest
in effect on the date the disaster commenced, and the
Administrator, in his discretion, waive the $500,000 limitation on the total amount outstanding and committed to the borrower under this subsection if the applicant constituted a major source of employment in an
area suffering a disaster.
1984—Subsec. (b)(2). Pub. L. 98–270, § 311(1), (3), substituted in provisions preceding subpar. (A) ‘‘small
business concern or small agricultural cooperative’’ for
‘‘small business concern’’ and ‘‘the concern or the cooperative’’ for ‘‘the concern’’.
Subsec. (b)(2)(D). Pub. L. 98–270, § 311(2), substituted
‘‘small business concerns or small agricultural cooperatives’’ for ‘‘small business concerns’’.
Subsec. (b)(3). Pub. L. 98–270, § 308, inserted ‘‘continuation of,’’ after ‘‘in effecting’’ and inserted provision directing that, for purposes of this paragraph, the impact
of the 1983 Payment-in-Kind Land Diversion program,
or any successor Payment-in-Kind program with a
similar impact on the small business community, be
deemed to be a consequence of Federal Government action.
Subsec. (b)(4). Pub. L. 98–270, § 304(2), added par. (4).
Subsec. (c). Pub. L. 98–270, § 301, added undesignated
par. following par. (6).
Subsec. (c)(5). Pub. L. 98–270, § 301, added par. (5).
Subsec. (c)(6). Pub. L. 98–270, § 301, added par. (6).
Pub. L. 98–270, § 309, inserted provision directing that
employees of concerns sharing common business premises be aggregated in determining ‘‘major source of employment’’ status for nonprofit applicants owning such
premises.
Subsec. (d)(1). Pub. L. 98–395 substituted provisions
stating that the Administration shall not fund any
Small Business Development Center except as authorized for former provisions which prohibited such funding only after October 1, 1980.
1981—Subsec. (a). Pub. L. 97–35, § 1902, substituted provisions empowering the Administration to the extent
and in such amounts as provided in advance in appropriation acts, for plant acquisition, construction, conversion, or expansion, including the acquisition of land,
material, supplies, equipment, and working capital,
and to make loans to qualified small business concerns
including those owned by qualified Indian tribes, for
purposes of this chapter, and that financing may be
made either directly or in cooperation with banks or
other financial institutions through agreements to participate on an immediate or deferred basis for provisions empowering the Administration to make loans to
enable small business concerns and such concerns wholly owned by Indian tribes to finance plant construction, conversion, or expansion, including the acquisition of land, or to finance residential or commercial
construction or rehabilitation, for sale, with a proviso
that such loans shall not be used primarily for the acquisition of land, or to finance the acquisition of equipment, facilities, machinery, supplies, or materials, or
to supply such concerns with working capital to be
used in the manufacture of articles, equipment, supplies, or materials for war, defense, or civilian production or as may be necessary to insure a well-balanced
national economy, and that such loans may be made or
effected either directly or in cooperation with banks or
other lending institutions through agreements to participate on an immediate or deferred basis.
Subsec. (a)(6)(C). Pub. L. 97–35, § 1910, repealed subpar.
(C) which read as follows: ‘‘the Administration shall
not decline to participate in a loan on a deferred basis
under this subsection solely because such loan will be
used to refinance all or any part of the existing indebtedness of a small business concern, unless the Administration determines that—
‘‘(i) the holder of such existing indebtedness is in a
position likely to sustain a loss if such refinancing is
not provided, and

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TITLE 15—COMMERCE AND TRADE

‘‘(ii) if the Administration provides such refinancing through an agreement to participate on a deferred basis, it will be in a position likely to sustain
part or all of any loss which would have otherwise
been sustained by the holder of the original indebtedness: Provided further, That the Administration may
decline to approve such refinancing if it determines
that the loan will not benefit the small business concern.’’
Subsec. (a)(8). Pub. L. 97–35, § 1910, repealed par. (8)
which read as follows: ‘‘(8)(A) Any loan made under the
authority of this subsection by the Administration in
cooperation with a bank or other lending institution
through an agreement to participate on a deferred
basis, may, upon the concurrence of the Administration, borrower and such bank or institution, have the
term of such loan extended or such loan refinanced
with an extension of its term: Provided, That the aggregate term of such extended or refinanced loan does not
exceed the term permitted pursuant to paragraph (5):
And provided further, That such extended loans, or refinancings shall be repaid in equal installments of principal and interest.
‘‘(B) An additional service fee not exceeding 1 per
centum of the outstanding amount of the principal may
be paid by the borrower to the lender in consideration
for such lender extending the term or refinancing of
such borrower’s indebtedness if such extension or refinancing results in the term of such indebtedness exceeding ten years.
‘‘(C) The authority provided in this paragraph shall
not be construed to otherwise limit the authority of
the Administration to set terms and conditions of the
loan.’’
Subsec. (b)(1). Pub. L. 97–35, § 1911, revised provisions
to specifically authorize loans only to repair, rehabilitate, or replace property, real or personal, damaged or
destroyed, and is not compensated for by insurance or
otherwise, and to refinance any mortgage or other lien
against a totally destroyed or substantially damaged
home or business concern upon finding that the applicant is not able to obtain credit elsewhere, that such
property is to be repaired, rehabilitated, or replaced,
that the amount refinanced shall not exceed the loss,
and that the amount shall be reduced to the extent
such mortgage or lien is satisfied by insurance or
otherwise.
Subsec. (b)(2). Pub. L. 97–35, § 1911, revised provisions
to continue to authorize loans to business concerns
which the Administration determines to have suffered
substantial economic injury as a result of a physical
disaster as declared under certain pertinent triggering
legislation.
Subsec. (b)(3) to (9). Pub. L. 97–35, § 1913(a), designated
existing provisions of par. (5) as (3) with minor changes,
and struck out pars. (3), (4), and (6) to (9) relating to
non-physical disaster loans.
Subsec. (c)(3). Pub. L. 97–35, § 1914, substituted ‘‘effective date of this Act’’ for ‘‘to October 1, 1983’’.
Subsec. (c)(4). Pub. L. 97–35, § 1912, added par. (4).
Subsec. (g). Pub. L. 97–35, § 1913(c), repealed subsec. (g)
which related to loans to small business concerns for
water pollution control facilities.
1980—Subsec. (a). Pub. L. 96–481, § 112, inserted provisions preceding par. (1) empowering the Administration
to the extent and in such amounts as are provided in
appropriation acts to make or effect either directly or
in cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred basis extensions and revolving lines of credit
for export purposes to enable small business concerns
to develop foreign markets and for preexport financing,
with proviso limiting the extension of credit or revolving line of credit to a period of eighteen months.
Subsec. (a)(8). Pub. L. 96–302, § 505, added par. (8).
Subsec. (b). Pub. L. 96–302, § 124, which directed that
cl. (E), respecting duplication of disaster benefits, be
added at end of subsec. (b), was executed by inserting
cl. (E) following cl. (D) in next to last par. of subsec. (b)
as the probable intent of Congress.

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Subsec. (b)(4). Pub. L. 96–302, § 123, substituted ‘‘other
causes’’ for ‘‘undetermined causes’’ and made the small
business concern ineligible for loan assistance when the
concern intentionally adulterates its product in attempting to establish eligibility under the loan assistance program.
Subsec. (b)(8). Pub. L. 96–302, § 122, authorized loans to
assist small business concern affected by a shortage of
coal or other energy-producing resource caused by a
strike, boycott, or embargo, unless the strike, boycott,
or embargo is directly against the small business concern.
Subsec. (c)(3). Pub. L. 96–302, § 119(a), (b), added subpar. (C) and extended disaster loans to disasters occurring prior to Oct. 1, 1983, instead of Oct. 1, 1982.
Subsec. (d)(1). Pub. L. 96–302, § 203, substituted provisions respecting: funding of small business development
centers under section 648 of this title on and after Oct.
1, 1980; operation of such centers funded prior to Oct. 1,
1979; and prescribing $300,000 limitation for fiscal year
1980, for such centers funded in fiscal year 1979, for provisions respecting grants for studies research, and
counseling concerning the managing, financing, and operation of small-business enterprises; study and research recommendation; and conditions, now covered
in section 648(a) of this title.
Subsec. (j)(10). Pub. L. 96–481, § 104, in opening paragraph substituted provision that the program and all
other services and activities authorized under this subsection and section 637(a) of this title shall be managed
by the Associate Administrator for Minority Small
Business and Capital Ownership Development under the
Supervision of, and responsible to the Administrator,
for provision that the management of the program
shall be vested in the Associate Administrator for Minority Small Business and Capital Ownership Development who shall also manage all other services and activities authorized under this subsection and section
637(a) of this title.
Subsec. (j)(10)(A)(i). Pub. L. 96–481, § 106(a), substituted ‘‘targets, objectives, and goals for correcting
the impairment of such concern’s ability to compete, as
determined for such concern pursuant to section
637(a)(6) of this title, within a fixed period of time as
mutually agreed upon by the applicant and the Administrator prior to acceptance in such program: Provided,
That not less than one year prior to the expiration of
such period, and upon the request of such concern, the
Administration shall review such period and may extend such period as necessary and appropriate; Provided
further, That no determination made under this paragraph shall be considered a denial of participation for
the purposes of section 637(a)(9) of this title’’ for ‘‘targets, objectives and goals’’.
Subsec. (j)(10)(C). Pub. L. 96–481, § 107, in the conditions required to receive a contract by a small business
concern, substituted provisions that the business plan
be approved by the Administration and that the program be able to provide the concern with management,
technical and financial services necessary to achieve
the targets, objectives and goals of such business, for
provision that the program be able to provide the concern with management, technical and financial services
as may be necessary to promote the competitive viability of the concern within a reasonable period of time.
1979—Subsec. (b) following par. (9). Pub. L. 96–38 inserted ‘‘, except as provided in subsection (c) of this
section,’’ after ‘‘the interest rate on the Administration’s share of any loan made under this subsection’’ in
first unnumbered paragraph.
Subsec. (c)(3). Pub. L. 96–38 added par. (3).
1978—Subsec. (a). Pub. L. 95–507, § 231, inserted provision including small-business concerns totally owned
and controlled by Indian tribes within the scope of this
section.
Subsec. (d). Pub. L. 95–315, § 3, designated existing
provisions as par. (1) and added par. (2).
Subsec. (j). Pub. L. 95–507, § 204, included individuals
and enterprises eligible for assistance under par. (10) of
this subsection and section 637(a) of this title among

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those eligible for assistance under this section, provided for the establishment of the small business and
capital ownership development program, and provided
for the coordination of certain Federal policies under
this section by the Associate Administrator for Minority Small Business and Capital Ownership Development.
Subsec. (k). Pub. L. 95–507, § 205, inserted reference to
section 637(a).
Subsec. (k)(4). Pub. L. 95–510 substituted ‘‘the daily
equivalent of the highest rate payable under section
5332 of title 5’’ for ‘‘$100 per diem’’.
Subsec. (l). Pub. L. 95–315, § 2, added subsec. (l).
1977—Subsec. (a). Pub. L. 95–89, § 301, authorized loans
to finance residential or commercial construction or
rehabilitation for sale, subject to restriction that such
loans be not used primarily for the acquisition of land.
Subsec. (a)(8). Pub. L. 95–89, § 101(d), repealed par. (8)
which required the Administrator to make direct loans
under subsec. (a) in an aggregate amount of not less
than $400,000,000 during fiscal year ending June 30, 1975.
Subsec. (b). Pub. L. 95–89, § 405, inserted following par.
(9) provisions respecting interest rate on loans to repair
or replace primary residence and/or replace or repair
damaged or destroyed personal property, including installation of insulation in connection with any disaster
occurring on or after April 1, 1977, and transmission of
a report to congressional committees respecting the activities under the provisions and the encouragement of
such insulation installations.
Subsec. (b)(2)(C) to (E). Pub. L. 95–89, § 403, added subpars. (C) to (E).
Subsec. (b)(3). Pub. L. 95–89, § 402, substituted ‘‘program or project constructed by or with funds provided
in whole or in part by the Federal Government or by a
program or project by a State or local government or
public service entity, providing such government or
public service entity has the authority to exercise the
right of eminent domain on such program or project’’
for ‘‘federally aided urban renewal program or a highway project or any other construction constructed by
or with funds provided in whole or in part by the Federal Government’’.
Subsec. (b)(5). Pub. L. 95–89, § 302, inserted ‘‘heretofore
or hereafter enacted’’ after ‘‘any Federal law’’.
Subsec. (b)(9). Pub. L. 95–89, § 404, added par. (9).
Subsec. (g)(4). Pub. L. 95–89, § 101(e), repealed par. (4)
which authorized appropriation of not to exceed
$800,000,000 to the disaster fund solely for purpose of
carrying out subsec. (g) loans to small business concerns for water pollution control facilities.
1976—Subsec. (a)(1). Pub. L. 94–305, § 112(c), inserted
reference to non-Federal sources.
Subsec. (a)(4)(A). Pub. L. 94–305, § 111, substituted
‘‘$500,000: Provided, That no such loan made or effected
either directly or in cooperation with banks or other
lending institutions through agreements to participate
on an immediate basis shall exceed $350,000’’ for
‘‘$350,000’’.
Subsec. (a)(4)(C). Pub. L. 94–305, § 108(b), substituted
provision relating to a twenty year maturity period for
any portion of loan made for the purpose of acquiring
real property or constructing facilities for provision relating to a ten year maturity for portion of loan made
for purpose of constructing facilities.
Subsec. (b). Pub. L. 94–305, § 114, in provisions following par. (8), substituted provisions requiring interest
rate on Administration’s share of any loan made under
this subsection not to exceed the average annual interest rate on all interest-bearing obligations of the
United States then forming a part of the public debt for
provisions requiring interest rate on Administration’s
share of any loan made under this subsection not to exceed 3 per centum per annum except for loans made
under pars. (3), (5), (6), (7), or (8) in which the interest
will not exceed either 23⁄4 per centum per annum or the
average annual interest rate of all interest-bearing obligations of the United States then forming a part of
the public debt.
Subsec. (b)(4). Pub. L. 94–305, § 112(d), struck out proviso that loans under subsec. (b)(4) of this section in-

§ 636

clude loans to persons who are engaged in business of
raising livestock, and who suffer substantial injury as
a result of animal disease.
Subsec. (i)(1), (3). Pub. L. 94–305, § 109, substituted
‘‘$100,000’’ for ‘‘$50,000’’.
1974—Subsec. (a)(4)(B). Pub. L. 93–386, § 8, substituted
provisions for determining the rate of interest for the
Administration’s share of any loan for provisions setting forth the rate of interest for the Administration’s
share of any loan as not more than 51⁄2 per centum per
annum.
Subsec. (a)(5)(B). Pub. L. 93–386, § 8, substituted provisions for determining the rate of interest for the Administration’s share of any loan for provisions setting
forth the rate of interest for the Administration’s share
of any loan as not less than 3 nor more than 5 per centum per annum.
Subsec. (a)(8). Pub. L. 93–386, § 12, added par. (8).
Subsec. (b)(4). Pub. L. 93–237, § 5, inserted proviso that
loans under this paragraph include loans to persons
who are engaged in the business of raising livestock
and who suffer substantial economic injury as a result
of animal disease.
Subsec. (b)(5) to (7). Pub. L. 93–237, §§ 2(a), (b), 6, consolidated into a single par. (5) the authority of the
Small Business Administration contained in former
par. (5) to make loans to small business concerns to
meet the requirements of the Federal Coal Mine Health
and Safety Act of 1969, the Egg Products Inspection
Act, the Wholesome Poultry Products Act, and the
Wholesome Meat Act, and former par. (6) to make loans
to small business concerns to meet the requirements of
the Occupational Safety and Health Act of 1970, expanded such authority to finance structural, operational, or other changes required in order to meet
standards imposed by Federal laws, or by State laws
enacted in conformity with Federal laws, redesignated
former par. (7) as par. (6), and added par. (7).
Subsec. (b)(8). Pub. L. 93–386, § 9(a), added par. (8).
Subsec. (b). Pub. L. 93–386, § 9(b), substituted ‘‘paragraph (3), (5), (6), (7), or (8)’’ for ‘‘paragraph (3), (5), (6),
or (7)’’ in first par. following the numbered pars.
Subsecs. (g), (h). Pub. L. 93–237, § 3(a), redesignated
subsec. (g), relating to loans to handicapped persons
and organizations for handicapped, as (h).
Subsec. (h)(2). Pub. L. 93–386, § 3(2), inserted ‘‘The Administration’s share of’’ before ‘‘any loan’’.
Subsecs. (i) to (k). Pub. L. 93–386, § 2(a)(4), added subsecs. (i) to (k).
1972—Subsec. (b). Pub. L. 92–385 added par. (7), and in
text following the numbered paragraphs, inserted provisions relating to the administration of the disaster
loan program in relation to disasters occurring between
January 1, 1971, and July 1, 1973.
Subsec. (g). Pub. L. 92–595 added subsec. (g) relating
to loans to handicapped persons and organizations for
handicapped.
Pub. L. 92–500 added subsec. (g) relating to loans to
small business concerns for water pollution control facilities.
1970—Subsec. (b). Pub. L. 91–597 added par. (5) relating
to loans for additions or alterations required under the
Egg Products Inspection Act, etc., and inserted reference to such par. (5).
Pub. L. 91–596 added par. (6) and inserted reference to
par. (6) after reference to par. (5).
1969—Subsec. (b). Pub. L. 91–173 added par. (5), and inserted reference to par. (5) after reference to par. (3).
1968—Subsec. (b)(1). Pub. L. 90–448 empowered the Administration to make loans because of riots or civil disorders.
Subsec. (b)(3). Pub. L. 90–495 added continuing in business at its existing location, purchasing a business, and
establishing a new business to the list of purposes for
which loans may be made, and extended the causes of
substantial economic injury of the concern involved to
include its location in, adjacent to, or near a federally
aided urban renewal program, highway project, or
other construction project using federal funds.
1967—Subsec. (a)(4). Pub. L. 90–104, § 103, extended maturity date for construction loans from ten to fifteen
years.

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Subsec. (f). Pub. L. 90–104, § 104, redesignated subsec.
(e), added by Pub. L. 89–769, as (f).
1966—Subsec. (e). Pub. L. 89–409 added subsec. (e).
Pub. L. 89–769 added subsec. (e) which provided for assistance to privately owned higher education in major
disaster areas and repayment.
1965—Subsec. (b). Pub. L. 89–59, § 1(a), increased the
maturity of disaster loans from twenty to thirty years,
and authorized suspension of principal and interest
payments and extension of date of maturity for five
year period.
Subsec. (c). Pub. L. 89–59, § 1(b), designated existing
provisions as par. (1) and added par. (2).
1964—Subsecs. (b)(2), (4). Pub. L. 88–264 extended provisions of par. (2) to any small business affected by disasters other than drought or excessive rainfall and
added par. (4) for disaster loans to any such business
suffering economic injuries through natural or undetermined causes.
Subsec. (b)(3). Pub. L. 88–560 provided that the purposes of a loan under this paragraph may include the
purchase or construction of other premises whether or
not the borrower owned the premises from which it was
displaced.
1961—Subsec. (b). Pub. L. 87–70 added par. (3), and inserted provisions limiting the interest rate in the case
of loans made pursuant to par. (3) to not more than the
higher of (A) 23⁄4 per centum per annum, or (B) the average annual interest rate on all interest-bearing obligations forming a part of the public debt as computed at
the end of the fiscal year next preceding the date of the
loan and adjusted to the nearest one-eighth of 1 per
centum, plus one-quarter of 1 per centum per annum.
Subsec. (d). Pub. L. 87–305 empowered the Administration to make grants to any corporation formed by two
or more eligible entities described in the text, authorized it to recommend to grant applicants particular
studies or research, eliminated the limitation of one
grant to a State, and conditioned grants to the procurement of additional amounts from sources other
than the Administration.
1959—Subsec. (d). Pub. L. 86–367 struck out provision
for making the grants from the fund established in the
Treasury by section 602(b) of the Small Business Investment Act of 1958.
1958—Subsec. (d). Pub. L. 85–699 added subsec. (d).
CHANGE OF NAME
Committee on Small Business of Senate changed to
Committee on Small Business and Entrepreneurship of
Senate. See Senate Resolution No. 123, One Hundred
Seventh Congress, June 29, 2001. Previously, Select
Committee on Small Business of Senate became Committee on Small Business of Senate. See Senate Resolution No. 101, Ninety-Seventh Congress, Mar. 25, 1981.
EFFECTIVE DATE OF 2010 AMENDMENT
Pub. L. 111–240, title I, § 1111(b), Sept. 27, 2010, 124
Stat. 2508, provided that the amendment made by section 1111(b) is effective Jan. 1, 2011.
Pub. L. 111–240, title I, § 1133(b), Sept. 27, 2010, 124
Stat. 2515, provided that the amendment made by section 1133(b) is effective Sept. 30, 2013.
Pub. L. 111–240, title I, § 1135(b), Sept. 27, 2010, 124
Stat. 2520, provided that the amendment made by section 1135(b) is effective 1 year after Sept. 27, 2010.
Pub. L. 111–240, title I, § 1206(h), Sept. 27, 2010, 124
Stat. 2532, provided that: ‘‘The amendments made by
subsections (a) through (f) [amending this section]
shall apply with respect to any loan made after the
date of enactment of this Act [Sept. 27, 2010].’’
Pub. L. 111–240, title I, § 1401(c), Sept. 27, 2010, 124
Stat. 2549, provided that the amendment made by section 1401(c)(1) is effective Oct. 1, 2012.
EFFECTIVE DATE OF 2008 AMENDMENT
Amendment of this section and repeal of Pub. L.
110–234 by Pub. L. 110–246 effective May 22, 2008, the
date of enactment of Pub. L. 110–234, except as other-

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wise provided, see section 4 of Pub. L. 110–246, set out
as an Effective Date note under section 8701 of Title 7,
Agriculture.
Pub. L. 110–234, title XII, § 12078(b)(2), May 22, 2008, 122
Stat. 1415, and Pub. L. 110–246, § 4(a), title XII,
§ 12078(b)(2), June 18, 2008, 122 Stat. 1664, 2177, provided
that: ‘‘The amendment made by paragraph (1) [amending this section] shall apply with respect to a loan or
guarantee made after the date of enactment of this Act
[June 18, 2008].’’
[Pub. L. 110–234 and Pub. L. 110–246 enacted identical
provisions. Pub. L. 110–234 was repealed by section 4(a)
of Pub. L. 110–246, set out as a note under section 8701
of Title 7, Agriculture.]
Pub. L. 110–234, title XII, § 12083(b), May 22, 2008, 122
Stat. 1420, and Pub. L. 110–246, § 4(a), title XII, § 12083(b),
June 18, 2008, 122 Stat. 1664, 2182, provided that: ‘‘The
amendments made by this section [amending this section] shall apply to any major disaster declared on or
after the date of enactment of this Act [June 18, 2008].’’
[Pub. L. 110–234 and Pub. L. 110–246 enacted identical
provisions. Pub. L. 110–234 was repealed by section 4(a)
of Pub. L. 110–246, set out as a note under section 8701
of Title 7, Agriculture.]
EFFECTIVE DATE OF 2007 AMENDMENT
Amendment by Pub. L. 110–140 effective on the date
that is 1 day after Dec. 19, 2007, see section 1601 of Pub.
L. 110–140, set out as an Effective Date note under section 1824 of Title 2, The Congress.
EFFECTIVE DATE OF 2004 AMENDMENT
Pub. L. 108–447, div. K, title I, § 101(b), Dec. 8, 2004, 118
Stat. 3443, provided that: ‘‘The amendment made by
subsection (a) [amending this section] shall take effect
on the date of enactment of this Act [Dec. 8, 2004].’’
Pub. L. 108–447, div. K, title I, § 103(b), Dec. 8, 2004, 118
Stat. 3444, provided that: ‘‘The amendment made by
subsection (a) [amending this section] shall take effect
on the date of enactment of this Act [Dec. 8, 2004].’’
Pub. L. 108–447, div. K, title I, § 107(c), Dec. 8, 2004, 118
Stat. 3446, provided that: ‘‘The amendments made by
this section [amending this section] shall take effect on
the date of enactment of this Act [Dec. 8, 2004].’’
EFFECTIVE DATE OF 2001 AMENDMENT
Amendment by Pub. L. 107–100 effective Oct. 1, 2002,
see section 6(e) of Pub. L. 107–100, set out in an Effective Date of 2001 Amendment; Use of Funds note under
section 697 of this title.
EFFECTIVE AND TERMINATION DATES OF 1999
AMENDMENTS
Pub. L. 106–50, title IV, § 402(e), Aug. 17, 1999, 113 Stat.
246, provided that:
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the amendments made by this section [amending this
section] shall take effect on the date of the enactment
of this section [Aug. 17, 1999].
‘‘(2) DISASTER LOANS.—The amendments made by subsection (b) [amending this section] shall apply to economic injury suffered or likely to be suffered as the result of a period of military conflict occurring or ending
on or after March 24, 1999.’’
Pub. L. 106–8, § 3(c), Apr. 2, 1999, 113 Stat. 16, provided
that effective Dec. 31, 2000, this section (amending this
section and enacting provisions set out as a note under
this section) and the amendments made by this section
are repealed.
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by section 101(f) [title VIII, § 405(d)(10)] of
Pub. L. 105–277 effective Oct. 21, 1998, and amendment
by section 101(f) [title VIII, § 405(f)(9)] of Pub. L. 105–277
effective July 1, 2000, see section 101(f) [title VIII,
§ 405(g)(1), (2)(B)] of Pub. L. 105–277, set out as a note
under section 3502 of Title 5, Government Organization
and Employees.

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EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105–135 effective on Oct. 1,
1997, see section 3 of Pub. L. 105–135, set out as a note
under section 631 of this title.
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by Pub. L. 104–208 effective Oct. 1, 1996,
see section 3 of Pub. L. 104–208, set out as a note under
section 633 of this title.
EFFECTIVE DATE OF 1995 AMENDMENT
Amendment by Pub. L. 104–36 inapplicable to loans
made or guaranteed under Small Business Act or Small
Business Investment Act of 1958 before Oct. 12, 1995, unless such loans are refinanced, extended, restructured,
or renewed on or after Oct. 12, 1995, see section 8 of Pub.
L. 104–36, set out as a note under section 634 of this
title.
EFFECTIVE AND TERMINATION DATES OF 1994
AMENDMENT
Pub. L. 103–403, title II, § 208(c), Oct. 22, 1994, 108 Stat.
4182, provided that: ‘‘The amendments made by this
section [amending this section] shall remain in effect
during the period beginning on the date of enactment
of this Act [Oct. 22, 1994] and ending on October 1, 1997.’’
EFFECTIVE DATE OF 1993 AMENDMENT
Pub. L. 103–81, § 5(b), Aug. 13, 1993, 107 Stat. 782, provided that: ‘‘Notwithstanding any other provision of
law, the amendments made by subsection (a) [amending
this section] shall be effective September 1, 1993, but
shall not be applicable to loan guarantee applications
received by the Administration prior to August 21, 1993.
In order to determine the percent of the loan to be
guaranteed pursuant to the amendments made by subsection (a), the Administration shall aggregate the outstanding guaranteed principal of multiple loan guarantees issued on behalf of the same borrower.’’
EFFECTIVE DATE OF 1992 AMENDMENT
Pub. L. 102–366, title I, § 113(b), Sept. 4, 1992, 106 Stat.
993, provided that: ‘‘The amendments made by paragraphs (4) and (5) of subsection (a) [amending this section] shall become effective on October 1, 1992.’’
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub. L. 101–37 applicable as if included in Pub. L. 100–656, see section 32 of Pub. L.
101–37, set out as a note under section 631 of this title.
EFFECTIVE DATE OF 1988 AMENDMENTS
Amendments by sections 202, 203, 206, 301(a), 408, and
505(h) of Pub. L. 100–656 and subsec. (j)(13)(G) and (I) of
this section as added by section 301(b) of Pub. L.
100–656, effective Nov. 15, 1988, see section 803(a) of Pub.
L. 100–656, set out as a note under section 631 of this
title.
Amendments by sections 201(a), 205, 208, 301(b), (c),
and 303(a) of Pub. L. 100–656 effective Aug. 15, 1989, see
section 803(b)(1)(A), (B) of Pub. L. 100–656, as amended,
set out as a note under section 631 of this title.
Amendment by section 302 of Pub. L. 100–656 effective
June 1, 1989, see section 803(b)(2) of Pub. L. 100–656, as
amended, set out as a note under section 631 of this
title.
Subsection (j)(13)(E) of this section as added by section 301(b) of Pub. L. 100–656 effective Oct. 1, 1989, see
section 803(b)(4)(D) of Pub. L. 100–656, as amended, set
out as a note under section 631 of this title.
Amendments by sections 119(a) and 120 to 122 of Pub.
L. 100–590 effective for all loan applications resulting
from disaster declarations made on or after Aug. 1,
1988, or from disaster declarations whose filing periods
were open on Oct. 1, 1988, see section 137 of Pub. L.
100–590, set out as a note under section 631 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98–270 effective Oct. 1, 1983,
see section 313 of Pub. L. 98–270, set out as a note under
section 632 of this title.

Pub. L. 98–270, title III, § 307, Apr. 18, 1984, 98 Stat. 161,
provided that: ‘‘The amendments made by sections 304
and 305 of this title [amending this section and provisions set out as a note under section 631 of this title]
shall apply to economic dislocations certified by any
State Governor to the Small Business Administration
after the date of enactment of this Act [Apr. 18, 1984]
providing such dislocation commenced since January 1,
1982.’’
Amendment by section 311 of Pub. L. 98–270 applicable
to loans granted on the basis of any disaster with respect to which a declaration has been issued after Sept.
1, 1982, under subsec. (b)(2)(A), (B), or (C) of this section
or with respect to which a certification has been made
after such date under subsec. (b)(2)(D) of this section,
see section 312 of Pub. L. 98–270, set out as a note under
section 632 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Pub. L. 97–35, title XIX, § 1910, Aug. 13, 1981, 95 Stat.
778, provided that the repeal of subsec. (a)(6)(C), (8) of
this section is effective Oct. 1, 1985.
Amendment by section 1913 of Pub. L. 97–35 effective
Oct. 1, 1981, amendments by sections 1902, 1911, 1912, and
1914 of Pub. L. 97–35 effective Aug. 13, 1981, but shall not
affect any financing made, obligated, or committed
under this chapter or chapter 14B of this title prior to
Aug. 13, 1981, see section 1918 of Pub. L. 97–35, set out
as a note under section 631 of this title.
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 96–302 effective Oct. 1, 1980,
see section 507 of Pub. L. 96–302, set out as a note under
section 631 of this title.
Pub. L. 96–302, title I, § 119(d), July 2, 1980, 94 Stat. 841,
provided that: ‘‘The amendments made by this section
to sections 7(c)(3)(C) [subsection (c)(3) of this section]
and 18 [section 647 of this title] of the Small Business
Act shall not apply to any disaster which commenced
on or before the effective date of this Act.’’
EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by Pub. L. 95–510 effective Oct. 1, 1979,
see section 105 of Pub. L. 95–510, set out as a note under
section 634 of this title.
EFFECTIVE DATE OF 1977 AMENDMENT
Amendment by section 101(d), (e) of Pub. L. 95–89 effective Oct. 1, 1977, see section 106 of Pub. L. 95–89, set
out as a note under section 633 of this title.
EFFECTIVE DATE OF 1972 AMENDMENT
Pub. L. 92–385, § 1(b), Aug. 16, 1972, 86 Stat. 555, provided that: ‘‘The last paragraph of the amendment
made by subsection (a) [amending this section] shall
apply only with respect to loans made on or after the
date of enactment of this Act [Aug. 16, 1972].’’
EFFECTIVE DATE OF 1970 AMENDMENTS
For effective date of amendment by Pub. L. 91–597 see
section 29 of Pub. L. 91–597, set out as a note under section 1031 of Title 21, Food and Drugs.
Amendment by Pub. L. 91–596 effective 120 days after
Dec. 29, 1970, see section 34 of Pub. L. 91–596, set out as
a note under section 651 of Title 29, Labor.
EFFECTIVE DATE OF 1968 AMENDMENT
Amendment by Pub. L. 90–495 effective Aug. 23, 1968,
see section 37 of Pub. L. 90–495, set out as a note under
section 101 of Title 23, Highways.
EFFECTIVE DATE OF 1966 AMENDMENT
Pub. L. 89–409, § 3(c), May 2, 1966, 80 Stat. 133, provided
that: ‘‘This section [amending this section, repealing
section 637a of this title, and enacting provisions set
out as a note under section 633 of this title] shall take
effect on July 1, 1966.’’
REGULATIONS
Pub. L. 111–240, title I, § 1131(b), Sept. 27, 2010, 124
Stat. 2514, provided that: ‘‘Not later than 180 days after

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TITLE 15—COMMERCE AND TRADE

the date of enactment of this Act [Sept. 27, 2010], the
Administrator [of the Small Business Administration]
shall issue regulations to carry out section 7(l) of the
Small Business Act [15 U.S.C. 636(l)], as amended by
subsection (a).’’
Pub. L. 106–50, title IV, § 402(d), Aug. 17, 1999, 113 Stat.
246, provided that: ‘‘Not later than 30 days after the
date of the enactment of this section [Aug. 17, 1999], the
Administrator of the Small Business Administration
shall issue such guidelines as the Administrator determines to be necessary to carry out this section [amending this section and enacting provisions set out as
notes under this section] and the amendments made by
this section.’’
Pub. L. 106–8, § 3(b), Apr. 2, 1999, 113 Stat. 15, which
provided that not later than 30 days after Apr. 2, 1999,
Administrator of the Small Business Administration
was to issue guidelines to carry out the program under
former subsec. (a)(27) of this section, was repealed by
Pub. L. 106–8, § 3(c), Apr. 2, 1999, 113 Stat. 16, effective
Dec. 31, 2000.
Section 114 of Pub. L. 102–366 provided that: ‘‘Not
later than 45 days after the date of enactment of this
Act [Sept. 4, 1992], the Small Business Administration
shall promulgate interim final regulations to implement the amendments made by this subtitle [subtitle B
(§§ 111–115) of title I of Pub. L. 102–366, amending this
section, enacting provisions set out as notes below, and
amending provisions set out as a note under section 631
of this title].’’
Pub. L. 102–140, title VI, § 609(i), Oct. 28, 1991, 105 Stat.
831, provided that: ‘‘Not later than 90 days after the
date of the enactment of this Act [Oct. 28, 1991], the
Small Business Administration shall promulgate interim final regulations to implement the microloan
demonstration program.’’
Pub. L. 100–656, title VIII, § 801, Nov. 15, 1988, 102 Stat.
3898, as amended by Pub. L. 101–37, § 30, June 15, 1989, 103
Stat. 76, provided that: ‘‘The Small Business Administration shall—
‘‘(1) within 60 days after the date of enactment of
this Act [Nov. 15, 1988] conduct meetings of present
and potential participants in the program established
by section 7(j)(10) of the Small Business Act [15 U.S.C.
636(j)(10)], as amended by this Act, to ascertain and
consider public comment on the nature and extent of
regulations needed to implement this Act [see Short
Title of 1988 Amendment note set out under section
631 of this title];
‘‘(2) within one hundred and twenty days after the
date of enactment of this Act, publish in the Federal
Register proposed rules and regulations implementing this Act; and
‘‘(3) within 270 days after the date of enactment of
this Act, publish in the Federal Register final rules
and regulations implementing this Act.’’
TERMINATION OF REPORTING REQUIREMENTS
For termination, effective May 15, 2000, of provisions
of law requiring submittal to Congress of any annual,
semiannual, or other regular periodic report listed in
House Document No. 103–7 (in which reports required
under subsections (a)(15)(E) and (j)(16)(B) of this section
are listed on page 191), see section 3003 of Pub. L. 104–66,
as amended, set out as a note under section 1113 of
Title 31, Money and Finance.
TRANSFER OF FUNCTIONS
For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of
the Federal Emergency Management Agency, including
the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal
Emergency Management Agency, see section 315(a)(1)
of Title 6, Domestic Security.
For transfer of functions, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto,

Page 770

to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and
sections 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set
out as a note under section 542 of Title 6.
AVAILABILITY OF FUNDS
Pub. L. 111–240, title I, § 1131(c), Sept. 27, 2010, 124
Stat. 2514, provided that: ‘‘Any amounts provided to the
Administrator [of the Small Business Administration]
for the purposes of carrying out section 7(l) of the
Small Business Act [15 U.S.C. 636(l)], as amended by
subsection (a), shall remain available until expended.’’
MARKETING AND OUTREACH
Pub. L. 110–234, title XII, § 12063(b), May 22, 2008, 122
Stat. 1408, and Pub. L. 110–246, § 4(a), title XII, § 12063(b),
June 18, 2008, 122 Stat. 1664, 2170, provided that: ‘‘Not
later than 90 days after the date of enactment of this
Act [June 18, 2008], the Administrator shall create a
marketing and outreach plan that—
‘‘(1) encourages a proactive approach to the disaster
relief efforts of the Administration;
‘‘(2) makes clear the services provided by the Administration, including contact information, application information, and timelines for submitting applications, the review of applications, and the disbursement of funds;
‘‘(3) describes the different disaster loan programs
of the Administration, including how they are made
available and the eligibility requirements for each
loan program;
‘‘(4) provides for regional marketing, focusing on
disasters occurring in each region before the date of
enactment of this Act [June 18, 2008], and likely scenarios for disasters in each such region; and
‘‘(5) ensures that the marketing plan is made available at small business development centers and on
the website of the Administration.’’
[Pub. L. 110–234 and Pub. L. 110–246 enacted identical
provisions. Pub. L. 110–234 was repealed by section 4(a)
of Pub. L. 110–246, set out as a note under section 8701
of Title 7, Agriculture.]
[‘‘Administration’’ and ‘‘Administrator’’, referred to
in Pub. L. 110–246, § 12063(b), set out above, as meaning
the Small Business Administration and the Administrator thereof, see section 636e of this title.]
DEFINITION OF TERMS USED IN PUB. L. 110–186
Pub. L. 110–186, § 3, Feb. 14, 2008, 122 Stat. 623, provided
that: ‘‘In this Act [see Short Title of 2008 Amendment
note set out under section 631 of this title]—
‘‘(1) the term ‘activated’ means receiving an order
placing a Reservist on active duty;
‘‘(2) the term ‘active duty’ has the meaning given
that term in section 101 of title 10, United States
Code;
‘‘(3) the terms ‘Administration’ and ‘Administrator’
mean the Small Business Administration and the Administrator thereof, respectively;
‘‘(4) the term ‘Reservist’ means a member of a reserve component of the Armed Forces, as described in
section 10101 of title 10, United States Code;
‘‘(5) the term ‘Service Corps of Retired Executives’
means the Service Corps of Retired Executives authorized by section 8(b)(1) of the Small Business Act
(15 U.S.C. 637(b)(1));
‘‘(6) the terms ‘service-disabled veteran’ and ‘small
business concern’ have the meaning as in section 3 of
the Small Business Act (15 U.S.C. 632);
‘‘(7) the term ‘small business development center’
means a small business development center described
in section 21 of the Small Business Act (15 U.S.C. 648);
and
‘‘(8) the term ‘women’s business center’ means a
women’s business center described in section 29 of the
Small Business Act (15 U.S.C. 656).’’

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ESTABLISHMENT OF PRE-CONSIDERATION PROCESS AND
OUTREACH AND TECHNICAL ASSISTANCE PROGRAM
Pub. L. 110–186, title II, § 201(b), (c), Feb. 14, 2008, 122
Stat. 627, 628, provided that:
‘‘(b) PRE-CONSIDERATION PROCESS.—
‘‘(1) DEFINITION.—In this subsection, the term ‘eligible Reservist’ means a Reservist who—
‘‘(A) has not been ordered to active duty;
‘‘(B) expects to be ordered to active duty during
a period of military conflict; and
‘‘(C) can reasonably demonstrate that the small
business concern for which that Reservist is a key
employee will suffer economic injury in the absence
of that Reservist.
‘‘(2) ESTABLISHMENT.—Not later than 6 months after
the date of enactment of this Act [Feb. 14, 2008], the
Administrator shall establish a pre-consideration
process, under which the Administrator—
‘‘(A) may collect all relevant materials necessary
for processing a loan to a small business concern
under section 7(b)(3) of the Small Business Act (15
U.S.C. 636(b)(3)) before an eligible Reservist employed by that small business concern is activated;
and
‘‘(B) shall distribute funds for any loan approved
under subparagraph (A) if that eligible Reservist is
activated.
‘‘(c) OUTREACH AND TECHNICAL ASSISTANCE PROGRAM.—
‘‘(1) IN GENERAL.—Not later than 6 months after the
date of enactment of this Act [Feb. 14, 2008], the Administrator, in consultation with the Secretary of
Veterans Affairs and the Secretary of Defense, may
develop a comprehensive outreach and technical assistance program (in this subsection referred to as
the ‘program’) to—
‘‘(A) market the loans available under section
7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3))
to Reservists, and family members of Reservists,
that are on active duty and that are not on active
duty; and
‘‘(B) provide technical assistance to a small business concern applying for a loan under that section.
‘‘(2) COMPONENTS.—The program shall—
‘‘(A) incorporate appropriate websites maintained
by the Administration, the Department of Veterans
Affairs, and the Department of Defense; and
‘‘(B) require that information on the program is
made available to small business concerns directly
through—
‘‘(i) the district offices and resource partners of
the Administration, including small business development centers, women’s business centers, and
the Service Corps of Retired Executives; and
‘‘(ii) other Federal agencies, including the Department of Veterans Affairs and the Department
of Defense.
‘‘(3) REPORT.—
‘‘(A) IN GENERAL.—Not later than 6 months after
the date of enactment of this Act, and every 6
months thereafter until the date that is 30 months
after such date of enactment, the Administrator
shall submit to Congress a report on the status of
the program.
‘‘(B) CONTENTS.—Each report submitted under
subparagraph (A) shall include—
‘‘(i) for the 6-month period ending on the date of
that report—
‘‘(I) the number of loans approved under section 7(b)(3) of the Small Business Act (15 U.S.C.
636(b)(3));
‘‘(II) the number of loans disbursed under that
section; and
‘‘(III) the total amount disbursed under that
section; and
‘‘(ii) recommendations, if any, to make the program more effective in serving small business
concerns that employ Reservists.’’
RESERVIST LOANS
Pub. L. 110–186, title II, § 202, Feb. 14, 2008, 122 Stat.
629, provided that:

§ 636

‘‘(a) IN GENERAL.—The Administrator and the Secretary of Defense shall develop a joint website and
printed materials providing information regarding any
program for small business concerns that is available
to veterans or Reservists.
‘‘(b) MARKETING.—The Administrator is authorized—
‘‘(1) to advertise and promote the program under
section 7(b)(3) of the Small Business Act [15 U.S.C.
636(b)(3)] jointly with the Secretary of Defense and
veterans’ service organizations; and
‘‘(2) to advertise and promote participation by lenders in such program jointly with trade associations
for banks or other lending institutions.’’
TEMPORARY EXTENSION AND EXPANSION OF LOAN
PROGRAMS
Pub. L. 108–217, §§ 4–8, Apr. 5, 2004, 118 Stat. 591–594,
provided that:
‘‘SEC. 4. COMBINATION FINANCING.
‘‘(a) IN GENERAL.—During the period beginning on the
date of the enactment of this section [Apr. 5, 2004] and
ending on September 30, 2004, subsection (a) of section
7 of the Small Business Act (15 U.S.C. 636(a)) shall be
applied as if the paragraph set forth in subsection (b)
were added at the end of that subsection (a).
‘‘(b) PARAGRAPH SPECIFIED.—The paragraph referred
to in subsection (a) is as follows:
‘‘ ‘(31) COMBINATION FINANCING.—
‘‘ ‘(A) DEFINITIONS.—In this paragraph—
‘‘ ‘(i) the term ‘‘combination financing’’ means financing comprised of a loan guaranteed under this
subsection and a commercial loan; and
‘‘ ‘(ii) the term ‘‘commercial loan’’ means a loan
which is part of a combination financing and no
portion of which is guaranteed by the Federal Government.
‘‘ ‘(B) APPLICABILITY.—This paragraph applies to a
loan guarantee obtained by a small business concern
under this subsection, if the small business concern
also obtains a commercial loan.
‘‘ ‘(C) COMMERCIAL LOAN AMOUNT.—In the case of any
combination financing, the amount of the commercial loan which is part of such financing shall not exceed the gross amount of the loan guaranteed under
this subsection which is part of such financing.
‘‘ ‘(D) COMMERCIAL LOAN PROVISIONS.—The commercial loan obtained by the small business concern—
‘‘ ‘(i) may be made by the participating lender
that is providing financing under this subsection or
by a different lender;
‘‘ ‘(ii) may be secured by a senior lien; and
‘‘ ‘(iii) may be made by a lender in the Preferred
Lenders Program, if applicable.
‘‘ ‘(E) COMMERCIAL LOAN FEE.—A one-time fee in an
amount equal to 0.7 percent of the amount of the
commercial loan shall be paid by the lender to the
Administration if the commercial loan has a senior
credit position to that of the loan guaranteed under
this subsection. Paragraph (23)(B) shall apply to the
fee established by this paragraph.
‘‘ ‘(F) DEFERRED PARTICIPATION LOAN SECURITY.—A
loan guaranteed under this subsection may be secured by a subordinated lien.
‘‘ ‘(G) COMPLETION OF APPLICATION PROCESSING.—The
Administrator shall complete processing of an application for combination financing under this paragraph pursuant to the program authorized by this
subsection as it was operating on October 1, 2003.
‘‘ ‘(H) BUSINESS LOAN ELIGIBILITY.—Any standards
prescribed by the Administrator relating to the eligibility of small business concerns to obtain combination financing under this subsection which are in effect on the date of the enactment of this paragraph
[Apr. 5, 2004] shall apply with respect to combination
financings made under this paragraph. Any modifications to such standards by the Administrator after
such date shall not unreasonably restrict the availability of combination financing under this paragraph relative to the availability of such financing
before such modifications.’.

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‘‘SEC. 5. LOAN GUARANTEE FEES.
‘‘(a) IN GENERAL.—During the period beginning on the
date of the enactment of this section [Apr. 5, 2004] and
ending on September 30, 2004, subparagraph (A) of paragraph (23) of subsection (a) of section 7 of the Small
Business Act (15 U.S.C. 636(a)(23)(A)) shall be applied as
if that subparagraph consisted of the language set forth
in subsection (b).
‘‘(b) LANGUAGE SPECIFIED.—The language referred to
in subsection (a) is as follows:
‘‘ ‘(A) PERCENTAGE.—
‘‘ ‘(i) IN GENERAL.—With respect to each loan
guaranteed under this subsection, the Administrator shall, in accordance with such terms and
procedures as the Administrator shall establish by
regulation, assess and collect an annual fee in an
amount equal to 0.5 percent of the outstanding balance of the deferred participation share of the loan.
‘‘ ‘(ii) TEMPORARY PERCENTAGE.—With respect to
loans approved during the period beginning on the
date of enactment of this clause [Apr. 5, 2004] and
ending on September 30, 2004, the annual fee assessed and collected under clause (i) shall be equal
to 0.36 percent of the outstanding balance of the deferred participation share of the loan.’.
‘‘(c) RETENTION OF CERTAIN FEES.—Subparagraph (B)
of paragraph (18) of subsection (a) of section 7 of the
Small Business Act (15 U.S.C. 636(a)(18)(B)) shall not be
effective during the period beginning on the date of the
enactment of this section [Apr. 5, 2004] and ending on
September 30, 2004.
‘‘SEC. 6. EXPRESS LOAN PROVISIONS.
‘‘(a) DEFINITIONS.—For the purposes of this section:
‘‘(1) The term ‘express lender’ shall mean any lender authorized by the Administrator to participate in
the Express Loan Pilot Program.
‘‘(2) The term ‘Express Loan’ shall mean any loan
made pursuant to section 7(a) of the Small Business
Act (15 U.S.C. 636(a)) in which a lender utilizes to the
maximum extent practicable its own loan analyses,
procedures, and documentation.
‘‘(3) The term ‘Express Loan Pilot Program’ shall
mean the program established by the Administrator
prior to the date of enactment of this section [Apr. 5,
2004] under the authority granted in section
7(a)(25)(B) of the Small Business Act (15 U.S.C.
636(a)(25)(B)) with a guaranty rate not to exceed 50
percent.
‘‘(4) The term ‘Administrator’ means the Administrator of the Small Business Administration.
‘‘(5) The term ‘small business concern’ has the same
meaning given such term under section 3(a) of the
Small Business Act (15 U.S.C. 632(a)).
‘‘(b) RESTRICTION TO EXPRESS LENDER.—The authority
to make an Express Loan shall be limited to those lenders deemed qualified to make such loans by the Administrator. Designation as an express lender for purposes
of making an Express Loan shall not prohibit such
lender from taking any other action authorized by the
Administrator for that lender pursuant to section 7(a)
of the Small Business Act (15 U.S.C. 636(a)).
‘‘(c) GRANDFATHERING OF EXISTING LENDERS.—Any express lender shall retain such designation unless the
Administrator determines that the express lender has
violated the law or regulations promulgated by the Administrator or modifies the requirements to be an express lender and the lender no longer satisfies those requirements.
‘‘(d) TEMPORARY EXPANSION OF EXPRESS LOAN PILOT
PROGRAM.—
‘‘(1) AUTHORIZATION.—As of the date of enactment
of this section [Apr. 5, 2004], the maximum loan
amount in the Express Loan Pilot Program shall be
increased to a maximum loan amount of $2,000,000 as
set forth in section 7(a)(3)(A) of the Small Business
Act (15 U.S.C. 636(a)(3)(A)).
‘‘(2) TERMINATION DATE.—The authority set forth in
paragraph (1) shall terminate on September 30, 2004.
‘‘(3) SAVINGS PROVISION.—Nothing in this section
shall be interpreted to modify or alter the authority

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of the Administrator to continue to operate the Express Loan Pilot Program on or after October 1, 2004.
‘‘(e) OPTION TO PARTICIPATE.—Except as otherwise
provided in this section, the Administrator shall take
no regulatory, policy, or administrative action, without regard to whether such action requires notification
pursuant to section 7(a)(24) of the Small Business Act
(15 U.S.C. 636(a)(24)), that has the effect of—
‘‘(1) requiring a lender to make an Express Loan
pursuant to subsection (d);
‘‘(2) limiting or modifying any term or condition of
deferred participation loans made under such section
(other than Express Loans) unless the Administrator
imposes the same limit or modification on Express
Loans;
‘‘(3) transferring or re-allocating staff, staff responsibilities, resources, or funding, if the result of such
transfer or re-allocation would be to increase the average loan processing, approval, or disbursement
time above the averages for those functions as of October 1, 2003, for loan guarantees approved under such
section by employees of the Administration or
through the Preferred Lenders Program; or
‘‘(4) otherwise providing any incentive or disincentive which encourages lenders or borrowers to make
or obtain loans under the Express Loan Pilot Program instead of under the general loan authority of
section 7(a) of the Small Business Act (15 U.S.C.
636(a)).
‘‘(f) COLLECTION AND REPORTING OF DATA.—For all
loans in excess of $250,000 made pursuant to the authority set forth in subsection (d)(1), the Administrator
shall, to the extent practicable, collect data on the purpose for each such loan. The Administrator shall report
monthly to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on
Small Business of the House of Representatives on the
number of such loans and their purposes.
‘‘(g) TERMINATION.—Subsections (b), (c), (e), and (f)
shall not apply after September 30, 2004.
‘‘SEC. 7. FISCAL YEAR 2004 DEFERRED PARTICIPATION STANDARDS.
‘‘Deferred participation loans made during the period
beginning on the date of the enactment of this Act
[Apr. 5, 2004] and ending on September 30, 2004, under
section 7(a) of the Small Business Act (15 U.S.C. 636(a))
shall have the same terms and conditions (including
maximum gross loan amounts and collateral requirements) as were applicable to loans made under such
section on October 1, 2003, except as otherwise provided
in this Act [amending section 697 of this title, enacting
this note, and amending provisions set out as a note
under section 631 of this title]. This section shall not
preclude the Administrator of the Small Business Administration from taking such action as necessary to
maintain the loan program carried out under such section, subject to appropriations.
‘‘SEC. 8. TEMPORARY INCREASE IN LOAN LIMIT
UNDER BUSINESS LOAN AND INVESTMENT
FUND AND IN ASSOCIATED GUARANTEE FEES.
‘‘(a) TEMPORARY INCREASE IN AMOUNT PERMITTED TO
BE OUTSTANDING AND COMMITTED.—During the period
beginning on the date of the enactment of this Act
[Apr. 5, 2004] and ending on September 30, 2004, section
7(a)(3)(A) of the Small Business Act (15 U.S.C.
636(a)(3)(A)) shall be applied as if the first dollar figure
were $1,500,000.
‘‘(b) TEMPORARY GUARANTEE FEE ON DEFERRED PARTICIPATION SHARE OVER $1,000,000.—With respect to
loans made during the period referred to in subsection
(a) to which section 7(a)(18) of the Small Business Act
(15 U.S.C. 636(a)(18)) applies, the Administrator of the
Small Business Administration shall collect an additional guarantee fee equal to 0.25 percent of the amount
(if any) by which the deferred participation share of the
loan exceeds $1,000,000.’’
BUDGETARY TREATMENT OF LOANS AND FINANCINGS
Pub. L. 107–100, § 6(c), Dec. 21, 2001, 115 Stat. 971, provided that: ‘‘Assistance made available under any loan

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TITLE 15—COMMERCE AND TRADE

made or approved by the Small Business Administration under section 7(a) of the Small Business Act (15
U.S.C. 636(a)) or financings made under title V of the
Small Business Investment Act of 1958 (15 U.S.C. 695 et
seq.), during the 2-year period beginning on October 1,
2002, shall be treated as separate programs of the Small
Business Administration for purposes of the Federal
Credit Reform Act of 1990 [2 U.S.C. 661 et seq.] only.’’
ENHANCED PUBLICITY DURING OPERATION ALLIED
FORCE
Pub. L. 106–50, title IV, § 402(c), Aug. 17, 1999, 113 Stat.
246, provided that: ‘‘For the duration of Operation Allied Force and for 120 days thereafter, the Administration shall enhance its publicity of the availability of
assistance provided pursuant to the amendments made
by this section [amending this section], including information regarding the appropriate local office at which
affected small businesses may seek such assistance.’’
EVALUATION OF PREDISASTER MITIGATION PILOT
PROGRAM
Pub. L. 106–24, § 1(c), Apr. 27, 1999, 113 Stat. 39, provided that, on Jan. 31, 2003, the Administrator of the
Small Business Administration was to submit to the
Committees on Small Business of the House of Representatives and the Senate a report on the effectiveness of the pilot program authorized by subsec. (b)(1)(C)
of this section.
CONGRESSIONAL FINDINGS REGARDING SMALL BUSINESS
YEAR 2000 READINESS
Pub. L. 106–8, § 2, Apr. 2, 1999, 113 Stat. 13, provided
that: ‘‘Congress finds that—
‘‘(1) the failure of many computer programs to recognize the Year 2000 may have extreme negative financial consequences in the Year 2000, and in subsequent years for both large and small businesses;
‘‘(2) small businesses are well behind larger businesses in implementing corrective changes to their
automated systems;
‘‘(3) many small businesses do not have access to
capital to fix mission critical automated systems,
which could result in severe financial distress or failure for small businesses; and
‘‘(4) the failure of a large number of small businesses due to the Year 2000 computer problem would
have a highly detrimental effect on the economy in
the Year 2000 and in subsequent years.’’
TRANSFER OF FUNDS
Pub. L. 105–135, title II, § 202(b), Dec. 2, 1997, 111 Stat.
2600, provided that:
‘‘(1) IN GENERAL.—No funds are authorized to be appropriated or otherwise provided to carry out the grant
program under section 7(m)(4)(F) of the Small Business
Act (15 U.S.C. 636(m)(4)(F)) (as added by this section),
except by transfer from another department or agency
of the Federal Government to the Administration in
accordance with this subsection.
‘‘(2) LIMITATION ON AMOUNTS.—The total amount
transferred to the Administration from other departments and agencies of the Federal Government to carry
out the grant program under section 7(m)(4)(F) of the
Small Business Act (15 U.S.C. 636(m)(4)(F)) (as added by
this section) shall not exceed—
‘‘(A) $3,000,000 for fiscal year 1998;
‘‘(B) $4,000,000 for fiscal year 1999; and
‘‘(C) $5,000,000 for fiscal year 2000.’’
DEFENSE LOAN AND TECHNICAL ASSISTANCE PROGRAM
Pub. L. 105–135, title V, § 507, Dec. 2, 1997, 111 Stat.
2625, provided that:
‘‘(a) DELTA PROGRAM AUTHORIZED.—
‘‘(1) IN GENERAL.—The Administrator may administer the Defense Loan and Technical Assistance program in accordance with the authority and requirements of this section.
‘‘(2) EXPIRATION OF AUTHORITY.—The authority of
the Administrator to carry out the DELTA program

§ 636

under paragraph (1) shall terminate when the funds
referred to in subsection (g)(1) have been expended.
‘‘(3) DELTA PROGRAM DEFINED.—In this section, the
terms ‘Defense Loan and Technical Assistance program’ and ‘DELTA program’ mean the Defense Loan
and Technical Assistance program that has been established by a memorandum of understanding entered
into by the Administrator and the Secretary of Defense on June 26, 1995.
‘‘(b) ASSISTANCE.—
‘‘(1) AUTHORITY.—Under the DELTA program, the
Administrator may assist small business concerns
that are economically dependent on defense expenditures to acquire dual-use capabilities.
‘‘(2) FORMS OF ASSISTANCE.—Forms of assistance authorized under paragraph (1) are as follows:
‘‘(A) LOAN GUARANTEES.—Loan guarantees under
the terms and conditions specified under this section and other applicable law.
‘‘(B) NONFINANCIAL ASSISTANCE.—Other forms of
assistance that are not financial.
‘‘(c) ADMINISTRATION OF PROGRAM.—In the administration of the DELTA program under this section, the
Administrator shall—
‘‘(1) process applications for DELTA program loan
guarantees;
‘‘(2) guarantee repayment of the resulting loans in
accordance with this section; and
‘‘(3) take such other actions as are necessary to administer the program.
‘‘(d) SELECTION AND ELIGIBILITY REQUIREMENTS FOR
DELTA LOAN GUARANTEES.—
‘‘(1) IN GENERAL.—The selection criteria and eligibility requirements set forth in this subsection shall
be applied in the selection of small business concerns
to receive loan guarantees under the DELTA program.
‘‘(2) SELECTION CRITERIA.—The criteria used for the
selection of a small business concern to receive a
loan guarantee under this section are as follows:
‘‘(A) The selection criteria established under the
memorandum of understanding referred to in subsection (a)(3).
‘‘(B) The extent to which the loans to be guaranteed would support the retention of defense workers
whose employment would otherwise be permanently or temporarily terminated as a result of reductions in expenditures by the United States for
defense, the termination or cancellation of a defense contract, the failure to proceed with an approved major weapon system, the merger or consolidation of the operations of a defense contractor,
or the closure or realignment of a military installation.
‘‘(C) The extent to which the loans to be guaranteed would stimulate job creation and new economic activities in communities most adversely affected by reductions in expenditures by the United
States for defense, the termination or cancellation
of a defense contract, the failure to proceed with an
approved major weapon system, the merger or consolidation of the operations of a defense contractor,
or the closure or realignment of a military installation.
‘‘(D) The extent to which the loans to be guaranteed would be used to acquire (or permit the use of
other funds to acquire) capital equipment to modernize or expand the facilities of the borrower to
enable the borrower to remain in the national technology and industrial base available to the Department of Defense.
‘‘(3) ELIGIBILITY REQUIREMENTS.—To be eligible for a
loan guarantee under the DELTA program, a borrower must demonstrate to the satisfaction of the
Administrator that, during any 1 of the 5 preceding
operating years of the borrower, not less than 25 percent of the value of the borrower’s sales were derived
from—
‘‘(A) contracts with the Department of Defense or
the defense-related activities of the Department of
Energy; or

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TITLE 15—COMMERCE AND TRADE

‘‘(B) subcontracts in support of defense-related
prime contracts.
‘‘(e) MAXIMUM AMOUNT OF LOAN PRINCIPAL.—With respect to each borrower, the maximum amount of loan
principal for which the Administrator may provide a
guarantee under this section during a fiscal year may
not exceed $1,250,000.
‘‘(f) LOAN GUARANTY RATE.—The maximum allowable
guarantee percentage for loans guaranteed under this
section may not exceed 80 percent.
‘‘(g) FUNDING.—
‘‘(1) IN GENERAL.—The funds that have been made
available for loan guarantees under the DELTA program and have been transferred from the Department
of Defense to the Small Business Administration before the date of the enactment of this Act [Dec. 2,
1997] shall be used for carrying out the DELTA program under this section.
‘‘(2) CONTINUED AVAILABILITY OF EXISTING FUNDS.—
The funds made available under the second proviso
under the heading ‘RESEARCH, DEVELOPMENT, TEST
AND EVALUATION, DEFENSE-WIDE’ in Public Law
103–335 (108 Stat. 2613) shall be available until expended—
‘‘(A) to cover the costs (as defined in section
502(5) of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a(5))) of loan guarantees issued under this
section; and
‘‘(B) to cover the reasonable costs of the administration of the loan guarantees.’’
TRADE ASSISTANCE PROGRAM FOR SMALL BUSINESS
CONCERNS ADVERSELY AFFECTED BY NAFTA
Section 509 of Pub. L. 105–135 provided that: ‘‘The Administrator shall coordinate Federal assistance in
order to provide counseling to small business concerns
adversely affected by the North American Free Trade
Agreement.’’
PRIVATE SECTOR LOAN SERVICING DEMONSTRATION
PROGRAM
Pub. L. 104–208, div. D, title I, § 104(a), Sept. 30, 1996,
110 Stat. 3009–729, provided that:
‘‘(1) IN GENERAL.—
‘‘(A) DEMONSTRATION PROGRAM REQUIRED.—Notwithstanding any other provision of law, the Administration shall conduct a demonstration program, within
the parameters described in paragraph (2), to evaluate the comparative costs and benefits of having the
Administration’s portfolio of disaster loans serviced
under contract rather than directly by employees of
the Administration. All costs of the demonstration
program shall be paid from amounts made available
for the Salaries and Expenses Account of the Administration.
‘‘(B) INITIATION DATE.—Not later than 90 days after
the date of enactment of this Act [Sept. 30, 1996], the
Administration shall issue a request for proposals for
the program parameters described in paragraph (2).
‘‘(2) DEMONSTRATION PROGRAM PARAMETERS.—
‘‘(A) LOAN SAMPLE.—The sample of loans for the
demonstration program shall be randomly drawn
from the Administration’s portfolio of loans made
pursuant to section 7(b) of the Small Business Act [15
U.S.C. 636(b)] and shall include a representative group
of not less than 30 percent of all loans for residential
properties, including 30 percent of all loans made during the demonstration program after the date of enactment of this Act, which loans shall be selected by
the Administration on the basis of geographic distribution and such other factors as the Administration determines to be appropriate.
‘‘(B) CONTRACT AND OPTIONS.—The Administration
shall solicit and competitively award one or more
contracts to service the loans included in the sample
of loans described in subparagraph (A) for a term of
not less than one year, with 3 one-year contract renewal options, each of which shall be exercised by the
Administration unless the Administration terminates
the contractor or contractors for good cause.

Page 774

‘‘(3) TERM OF DEMONSTRATION PROGRAM.—The demonstration program shall commence not later than October 1, 1997.
‘‘(4) REPORTS.—
‘‘(A) INTERIM REPORTS.—Not later than 120 days before the expiration of the initial 4-year contract performance period, the Administrator shall submit to
the Committees on Small Business of the House of
Representatives and the Senate [Committee on Small
Business of Senate now Committee on Small Business
and Entrepreneurship of Senate] an interim report on
the conduct of the demonstration program. The contractor shall be afforded a reasonable opportunity to
attach comments to each such report.
‘‘(B) FINAL REPORT.—Not later than 120 days after
the termination of the demonstration program, the
Administrator shall submit to the Committees on
Small Business of the House of Representatives and
the Senate [Committee on Small Business of Senate
now Committee on Small Business and Entrepreneurship of Senate] a final report on the performance of
the demonstration program, together with the recommendations of the Administrator for continuation,
termination, or modification of the demonstration
program.’’
INCREASE OF AMOUNTS FOR DISASTER LOANS
Pub. L. 103–75, Aug. 12, 1993, 107 Stat. 740, provided in
part: ‘‘That notwithstanding any other provision of
law, the $500,000 limitation on the amounts outstanding
and committed to a borrower provided in paragraph
7(c)(6) of the Small Business Act [15 U.S.C. 636(c)(6)]
shall be increased to $1,500,000 for disasters commencing on or after April 1, 1993.’’
CONGRESSIONAL FINDINGS OF MICROLENDING EXPANSION
ACT OF 1992
Pub. L. 102–366, title I, § 112, Sept. 4, 1992, 106 Stat. 989,
provided that: ‘‘The Congress finds that—
‘‘(1) nationwide, there are many individuals who
possess skills that, with certain short-term assistance, could enable them to become successfully selfemployed;
‘‘(2) many talented and skilled individuals who are
employed in low-wage occupations could, with sufficient opportunity, start their own small business
concerns, which could provide them with an improved
standard of living;
‘‘(3) most such individuals have little or no savings,
a nonexistent or poor credit history, and no access to
credit or capital with which to start a business venture;
‘‘(4) women, minorities, and individuals residing in
areas of high unemployment and high levels of poverty have particular difficulty obtaining access to
credit or capital;
‘‘(5) providing such individuals with small-scale,
short-term financial assistance in the form of microloans, together with intensive marketing, management, and technical assistance, could enable them to
start or maintain small businesses, to become selfsufficient, and to raise their standard of living;
‘‘(6) banking institutions are reluctant to provide
such assistance because of the administrative costs
associated with processing and servicing the loans
and because they lack experience in providing the
type of marketing, management, and technical assistance needed by such borrowers;
‘‘(7) many organizations that have had successful
experiences in providing microloans and marketing,
management, and technical assistance to such borrowers exist throughout the Nation; and
‘‘(8) loans from the Federal Government to intermediaries for the purpose of relending to start-up,
newly established and growing small business concerns are an important catalyst to attract private
sector participation in microlending.’’
DISADVANTAGED SMALL BUSINESS STATUS DECISIONS
Pub. L. 102–366, title II, § 221, Sept. 4, 1992, 106 Stat.
999, provided that:

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TITLE 15—COMMERCE AND TRADE

‘‘(a) PUBLICATION OF DECISIONS.—A decision issued
pursuant to section 7(j)(11)(F)(vii) of the Small Business Act (15 U.S.C. 636(j)(11)(F)(vii)) shall—
‘‘(1) be made available to the protestor, the protested party, the contracting officer (if not the protestor), and all other parties to the proceeding, and
published in full text; and
‘‘(2) include findings of fact and conclusions of law,
with specific reasons supporting such findings or conclusions, upon each material issue of fact and law of
decisional significance regarding the disposition of
the protest.
‘‘(b) PRECEDENTIAL VALUE OF PRIOR DECISIONS.—A decision issued under section 7(j)(11)(F)(vii) of the Small
Business Act that is issued prior to the date of enactment of this Act [Sept. 4, 1992] shall not have value as
precedent in deciding any subsequent protest until such
time as the decision is published in full text.’’
REAUTHORIZATION OF BOND WAIVER TEST PROGRAM
Pub. L. 102–190, div. A, title VIII, § 813(a)–(e), Dec. 5,
1991, 105 Stat. 1424, provided that:
‘‘(a) AUTHORITY.—(1) In the award of construction
contracts by the Department of Defense to participants
in the Minority Small Business and Capital Ownership
Development Program of the Small Business Administration, the Secretary of Defense may exercise the authority to grant surety bond exemptions to such participants provided by section 7(j)(13)(D) of the Small
Business Act (15 U.S.C. 636(j)(13)(D)). In any case in
which the Secretary exercises such authority, the Secretary may award a construction contract directly to a
participant in such program, without approval by or
consultation with the Small Business Administration.
‘‘(2) In exercising the authority provided by paragraph (1), the Secretary of Defense shall make every
reasonable effort to award not fewer than 30 contracts
for construction projects (including repair and alteration of existing facilities) during each fiscal year.
‘‘(b) DELEGATION OF AUTHORITY.—The Secretary of
Defense shall delegate to one or more Secretaries of a
military department the authority provided by subsection (a)(1).
‘‘(c) NO RIGHT OF ACTION AGAINST THE UNITED
STATES.—A dispute between a contractor granted a surety bond exemption pursuant to section 7(j)(13)(D) of
the Small Business Act and a subcontractor at any tier
or a supplier of such contractor relating to the amount
or entitlement of a payment due such subcontractor or
supplier does not constitute a dispute to which the
United States is a party. The United States may not be
interpleaded in any judicial or administrative proceeding involving such a dispute.
‘‘(d) REGULATIONS.—The Secretary of Defense shall
prescribe final regulations and procedures for exercising the authority provided in this section not later
than 270 days after the date of the enactment of this
Act [Dec. 5, 1991].
‘‘(e) PROGRAM DURATION.—The authority provided by
this section shall apply to contracts awarded before October 1, 1994.’’
EMERGENCY DIRECT LOANS FOR SMALL BUSINESS CONCERNS LOCATED IN COMMUNITIES ADVERSELY AFFECTED BY TROOP DEPLOYMENTS DURING PERSIAN
GULF CONFLICT
Pub. L. 102–190, div. A, title X, § 1087, Dec. 5, 1991, 105
Stat. 1483, authorized emergency direct loans to small
business concerns located in counties in which at least
5 small business concerns suffered severe economic injury resulting from deployment, after July 31, 1990, of
troops in connection with Persian Gulf conflict, provided that loan amounts could not exceed $50,000 to any
small business concern, and provided for source of loan
funds, applications for loans, definitions, regulations to
implement loan program, and expiration of loan authority at end of 270-day period beginning on date on
which loan applications were first accepted.

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TERMINATION OF MICROLOAN DEMONSTRATION PROGRAM
Pub. L. 102–140, title VI, § 609(j), Oct. 28, 1991, 105 Stat.
831, as amended by Pub. L. 103–403, title II, § 203, Oct. 22,
1994, 108 Stat. 4181, provided that: ‘‘The demonstration
program established by subsection (h) [amending this
section] shall terminate on October 1, 1997.’’
REFERENCES IN OTHER LAWS TO GS–16, 17, OR 18 PAY
RATES
References in laws to the rates of pay for GS–16, 17,
or 18, or to maximum rates of pay under the General
Schedule, to be considered references to rates payable
under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, § 101(c)(1)]
of Pub. L. 101–509, set out in a note under section 5376
of Title 5.
TEST PROGRAM FOR USE OF BOND WAIVER AUTHORITY
TO ASSIST CERTAIN SMALL DISADVANTAGED BUSINESS
CONCERNS
Pub. L. 101–189, div. A, title VIII, § 833, Nov. 29, 1989,
103 Stat. 1509, which directed Secretary of Defense and
Small Business Administration to establish a program
for fiscal years 1990 and 1991 to test use of authority
provided by subsec. (j)(13)(D) of this section, and that
under the test program, the Secretary of Defense was
to make every reasonable effort during each such fiscal
year to award not less than 30 contracts for construction projects (including repair and alteration of existing facilities) to participants in Minority Small Business and Capital Ownership Development Program of
Small Business Administration granted surety bond exemptions under such authority, was repealed by Pub. L.
102–190, div. A, title VIII, § 813(f), Dec. 5, 1991, 105 Stat.
1424.
DEFINITION OF TERMS USED IN PUB. L. 100–656
Pub. L. 100–656, § 2, Nov. 15, 1988, 102 Stat. 3854, as
amended by Pub. L. 101–37, § 3, June 15, 1989, 103 Stat. 70,
provided that: ‘‘For the purposes of this Act [see Short
Title of 1988 Amendment note set out under section 631
of this title]—
‘‘(1) the term ‘Administration’ means the Small
Business Administration;
‘‘(2) the term ‘Administrator’ means the Administrator of the Small Business Administration, unless
otherwise indicated;
‘‘(3) the term ‘Business Opportunity Specialist’
means the Administration employee responsible for
providing business development assistance to Program Participants pursuant to sections 7(j) and 8(a)
of the Small Business Act (15 U.S.C. 636(j), 637(a));
‘‘(4) the term ‘disadvantaged owners’ means those
individuals upon whom eligibility is based for participation in the Program and the award of subcontracts
pursuant to section 8(a) of the Small Business Act (15
U.S.C. 637(a));
‘‘(5) the term ‘minority owned businesses’ means
business concerns that are at least 51 percent owned
and controlled by one or more individuals who belong
to those groups described or identified pursuant to
section 2(e)(1)(C) of the Small Business Act (15 U.S.C.
631(e)(1)(C));
‘‘(6) the term ‘Program’ means the Minority Small
Business and Capital Ownership Development Program established by section 7(j)(10) of the Small Business Act (15 U.S.C. 636(j)(10)), unless otherwise indicated;
‘‘(7) the term ‘Program Participant’ means a small
business concern participating in the Program; and
‘‘(8) the term ‘Program Participation Term’ means
the fixed period of time assigned to a Program Participant pursuant to section 7(j)(10)(A)(i) of the Small
Business Act (15 U.S.C. 636(j)(10)(A)(i)) prior to the
date of enactment of this Act [Nov. 15, 1988].’’
CONGRESSIONAL FINDINGS AND DECLARATION OF
PURPOSES OF PUB. L. 100–656
Pub. L. 100–656, title I, § 101, Nov. 15, 1988, 102 Stat.
3855, provided that:

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TITLE 15—COMMERCE AND TRADE

‘‘(a) FINDINGS.—The Congress finds that—
‘‘(1) the Capital Ownership Development Program
administered by the Small Business Administration
and the award of contracts pursuant to section 8(a) of
the Small Business Act [15 U.S.C. 637(a)] remain a primary tool for improving opportunities for small business concerns owned and controlled by socially and
economically disadvantaged individuals in the Federal procurement process and bringing such concerns
into the nation’s economic mainstream;
‘‘(2) although some progress has resulted from the
Program, it has generally failed to meet its objectives, which remain as valid now as when the Program was initiated;
‘‘(3) too few concerns that have exited the Program
have been prepared to compete successfully in the
open marketplace on competitive procurements, and
many concerns have developed an unhealthy dependency on sole-source contracts by the time they are
required to leave the Program;
‘‘(4) the application and certification process for admitting new participants to the Program is inordinately lengthy and burdensome;
‘‘(5) the Administration has often not efficiently
and equitably administered and managed the Program in a manner that provided clear lines of responsibility for implementing and monitoring many of
the administrative duties under the Program;
‘‘(6) the Administration and some program participants have given insufficient attention and support
to the business development goals of the Program
and instead have focused almost entirely on the size
of contract awards or the number of firms certified to
participate in the Program;
‘‘(7) many Federal procuring agencies have failed to
identify and offer the necessary amount of contract
support in order to allow for diversification and
growth of disadvantaged businesses participating in
the Program;
‘‘(8) contract support as well as business development expenses have been misused both by the Administration and Program participants and have not been
equitably distributed pursuant to objective criteria;
‘‘(9) the widespread perception of undue political influence in the operation and administration of the
Program has significantly contributed to the Program’s poor image and has deterred utilization of the
Program by socially and economically disadvantaged
concerns and by Federal procuring agencies; and
‘‘(10) it is imperative that increased competition
and other substantial reforms be accomplished in the
Program in order to promote the Congressionally
mandated business development objectives and purposes.
‘‘(b) PURPOSES.—The purposes of this Act [see Short
Title of 1988 Amendment note set out under section 631
of this title] therefore are to—
‘‘(1) affirm that the Capital Ownership Development Program and the section 8(a) [15 U.S.C. 637(a)]
authority shall be used exclusively for business development purposes to help small businesses owned and
controlled by the socially and economically disadvantaged to compete on an equal basis in the mainstream of the American economy;
‘‘(2) affirm that the measure of success of the Capital Ownership Development Program, and the section 8(a) authority, shall be the number of competitive firms that exit the Program without being unreasonably reliant on section 8(a) contracts and that
are able to compete on an equal basis in the mainstream of the American economy;
‘‘(3) ensure that program benefits accrue to individuals who are both socially and economically disadvantaged;
‘‘(4) increase the number of small businesses owned
and controlled by such individuals from which the
United States may purchase products and services
(including construction work); and
‘‘(5) ensure integrity, competence, and efficiency in
the administration of business development services

Page 776

and the Federal contracting opportunities made
available to eligible small businesses.’’
EMPLOYEE TRAINING AND EVALUATION
Pub. L. 100–656, title IV, § 410, Nov. 15, 1988, 102 Stat.
3879, as amended by Pub. L. 101–37, § 18, June 15, 1989, 103
Stat. 74, provided that:
‘‘(a) TRAINING REQUIREMENTS FOR BUSINESS OPPORTUNITY SPECIALISTS.—(1) In each Small Business Administration field office responsible for assisting one or
more Program Participants there shall be a position
designated as a Business Opportunity Specialist. To the
maximum extent practicable the Administration shall
assure that an adequate number of Business Opportunity Specialists are assigned to each district office to
carry out the responsibilities of sections 7(j) and 8(a) of
the Small Business Act (15 U.S.C. 636(j), 637(a)) and to
assist Program Participants.
‘‘(2) The Administration shall take such actions as
may be appropriate to ensure that any person employed
as a Business Opportunity Specialist receives adequate
periodic training to assure such employee is capable of
assisting Program Participants to fully utilize the Program and to meet the requirements of the Small Business Act [15 U.S.C. 631 et seq.], as amended by this Act.
‘‘(b) PILOT PROGRAM.—(1) Within 180 days after the effective date of this subsection [Nov. 15, 1988] the Administrator shall designate three regions of the Administration to conduct a pilot program pursuant to the
provisions of this subsection. The designated regions
shall contain approximately 30 per centum of the total
number of Program Participants as of the time of designation.
‘‘(2) A Business Opportunity Specialist employed in a
Region designated pursuant to paragraph (1), in addition to other assigned duties and responsibilities,
shall—
‘‘(A) conduct contract negotiations on behalf of the
Administration for contracts awarded pursuant to
section 8(a) of the Small Business Act (15 U.S.C.
637(a)) when performance will be rendered by one or
more firms in such Specialist’s assigned portfolio;
‘‘(B) facilitate and otherwise assist such firms in
negotiating for the receipt of contracts to be let pursuant to such section.
‘‘(3) The Administration shall take such actions as
may be appropriate to train and qualify such Specialists to perform the negotiations required pursuant to
paragraph (2).
‘‘(4) To the extent practicable, the Administrator
shall ensure that the performance appraisal system applicable to a Business Opportunity Specialist employed
in a region designated pursuant to paragraph (1) affords
substantial recognition to how well such Specialist’s
assigned portfolio of concerns participating in the program established by section 7(j)(10) of the Small Business Act (15 U.S.C. 636(j)(10)) are achieving competitiveness and furthering the business development purposes
of the program.
‘‘(5) The Administration shall establish personnel positions for Business Opportunity Specialists employed
in the regions designated pursuant to paragraph (1)
that are classified at a grade level of the General
Schedule that are sufficient, in the opinion of the Administrator, to attract and retain highly qualified personnel.
‘‘(c) REPORT AND PILOT PROGRAM TERMINATION.—(1)
Within 120 days after the termination of the pilot program conducted pursuant to subsection (b), the Administration shall issue a report to the Committees on
Small Business of the Senate and of the House of Representatives [Committee on Small Business of Senate
now Committee on Small Business and Entrepreneurship of Senate] on the effectiveness of the pilot. Such
report shall contain such recommendations for administrative or legislative change as may be appropriate.
‘‘(2) The pilot program conducted pursuant to subsection (b) shall be terminated three years after the
date on which the Committees on Small Business of the
Senate and of the House of Representatives [Committee

Page 777

TITLE 15—COMMERCE AND TRADE

on Small Business of Senate now Committee on Small
Business and Entrepreneurship of Senate] receive written notification from the Administrator that the pilot
is in full operation in each of the three designated pilot
regions.’’
GENERAL ACCOUNTING OFFICE REPORT
Pub. L. 100–656, title V, § 504, Nov. 15, 1988, 102 Stat.
3882, directed Comptroller General of the United States
to conduct a review of operation of Minority Small
Business and Capital Ownership Development Program
authorized by subsec. (j)(10) of this section and contract
assistance provided pursuant to section 637(a)(15) of
this title commencing within 180 days of Nov. 15, 1988,
and concluding Sept. 30, 1991, such review to report on
implementation of provisions of Pub. L. 100–656 by
Small Business Administration and various executive
departments and agencies providing contracting opportunities to the Program, and directed Comptroller General to prepare a report summarizing findings of review, make such recommendations as may be appropriate, and transmit report to Committees on Small
Business of the Senate and House of Representatives by
Feb. 1, 1992.
COMMISSION ON MINORITY BUSINESS DEVELOPMENT
Pub. L. 100–656, title V, § 505(a)–(g), Nov. 15, 1988, 102
Stat. 3883, as amended by Pub. L. 101–37, § 20, June 15,
1989, 103 Stat. 74; Pub. L. 101–574, title II, § 211, Nov. 15,
1990, 104 Stat. 2821; Pub. L. 102–366, title II, § 231(a),
Sept. 4, 1992, 106 Stat. 1001; Pub. L. 103–160, div. A, title
IX, § 904(f), Nov. 30, 1993, 107 Stat. 1729, established the
Commission on Minority Business Development, set
out its duties, powers, membership, administration,
and personnel, and provided that it cease to exist within 90 days after the date that it transmitted its final report to Congress and to the President or Sept. 30, 1992,
whichever was later.
LIMITATIONS ON SPENDING AUTHORITY
Pub. L. 100–656, title VIII, § 802(f), Nov. 15, 1988, 102
Stat. 3899, provided that:
‘‘(1) Any new credit authority or authority to enter
into contracts provided for in this Act [see Short Title
of 1988 Amendment note set out under section 631 of
this title] is to be effective for any fiscal year only to
such extent or in such amounts as are provided in appropriation Acts.
‘‘(2) No funds are authorized to be appropriated in
subsequent appropriation Acts to the Administration
for the purpose of making grants of financial assistance
under the so called ‘Business Development Expense’
program to any firm participating in the programs authorized by section 7(j)(10) or section 8(a) of the Small
Business Act (15 U.S.C. 636(j)(10) and 637(a)).’’
CERTIFIED LOAN PROGRAM; EXPANDED PARTICIPATION;
REPORTS TO CONGRESS
Pub. L. 100–590, title I, § 102(b), Nov. 3, 1988, 102 Stat.
2992, provided that: ‘‘The Administration shall take appropriate steps to expand participation in the certified
loan program and shall report to the Small Business
Committees of the Senate and the House of Representatives on the amount of loans approved and the amount
of losses sustained under the provisions of section
7(a)(19) of the Small Business Act [15 U.S.C. 636(a)(19)].
An interim report shall be submitted not later than one
year after date of enactment of this Act [Nov. 3, 1988]
and a final report shall be submitted not later than 18
months after the date of enactment.’’
Similar provisions were contained in Pub. L. 100–533,
title III, § 302(b), Oct. 25, 1988, 102 Stat. 2693.
PIPELINE LOANS OR PREVIOUS DISASTERS
Pub. L. 99–272, title XVIII, § 18006(b), Apr. 7, 1986, 100
Stat. 366, as amended by Pub. L. 99–349, title I, July 2,
1986, 100 Stat. 718, provided that: ‘‘Notwithstanding the
amendments made by this section [amending sections
636 and 647 of this title], sections 18002 [amending provi-

§ 636

sions set out as a note under section 631 of this title]
and 18016 [amending section 632 of this title], or any
other provision of law, the Small Business Administration shall continue to accept, process, and approve loan
applications under paragraphs (1) through (4) of subsection [section] 7(b) of the Small Business Act [15
U.S.C. 636(b)(1) to (4)] and shall obligate and disburse
loan funds on account of disasters which occurred prior
to October 1, 1985, and with respect to which a disaster
declaration application was submitted prior to October
1, 1985, even if any such application is filed after the
date of the enactment of this Act [Apr. 7, 1986].’’
DETERMINATION OF NATURAL DISASTER BY SECRETARY
OF AGRICULTURE TO BE DEEMED DISASTER DECLARATION BY ADMINISTRATOR OF SMALL BUSINESS ADMINISTRATION; DISASTERS COMMENCING BETWEEN JANUARY 1, 1983, AND SEPTEMBER 30, 1983
Pub. L. 98–166, title I, § 101, Nov. 28, 1983, 97 Stat. 1079,
provided in part that: ‘‘beginning with disasters commencing between January 1, 1983, through September
30, 1983, determination of a natural disaster by the Secretary of Agriculture pursuant to 7 U.S.C. 1961 shall be
deemed a disaster declaration by the Administrator of
the Small Business Administration for purposes of determining eligibility for assistance under section 7(b)(1)
of the Small Business Act [subsec. (b)(1) of this section]
for agricultural enterprises as defined in section 18(b)
of the Small Business Act [15 U.S.C. 647(b)]: Provided,
That nothing in this paragraph is to preclude the applicability of section 18(a) of the Small Business Act [15
U.S.C. 647(a)] with regard to the duplication of benefits
for disasters commencing between January 1, 1983,
through September 30, 1983.’’
REPORTS TO CONGRESS; DEFAULT RATE OF LOANS
Pub. L. 97–35, title XIX, § 1907 Aug. 13, 1981, 95 Stat.
777, required the Small Business Administration to submit to Congress, not later than Feb. 28, 1984, and 1985,
reports containing specific information on the aggregate number, dollar value, and default rate of all loans
with respect to 15 U.S.C. 636(a)(5), (6)(C), (8)(A).
BUSINESS PLANS; SUBMITTAL BY CONCERNS ELIGIBLE
TO RECEIVE CONTRACTS
Pub. L. 96–481, title I, § 106(b), Oct. 21, 1980, 94 Stat.
2322, provided that: ‘‘Notwithstanding the provisions of
subsection (a) of this section [amending subsec.
(j)(10)(A)(i) of this section], for concerns eligible to receive contracts pursuant to section 8(a) of the Small
Business Act [section 637(a) of this title] on the effective date of the amendment made by this section [Oct.
21, 1980], each such concern shall submit to the Small
Business Administration within two months after the
promulgation of final regulations issued within one
hundred and twenty days after the enactment of this
Act [Oct. 21, 1981] the business plan required under section 7(j)(10)(A)(i) of the Small Business Act, as amended
by subsection (a) of this section [subsec. (j)(10)(A)(i) of
this section]: Provided however, That the period of time
required under section 7(j)(10)(A)(i) of the Small Business Act, as amended by subsection (a) of this section,
shall be fixed as mutually agreed upon by the program
participant and the Small Business Administration
prior to the awarding or extending of contracts to such
concern pursuant to section 8(a) of the Small Business
Act after June 1, 1981, but the period shall be fixed in
no case later than eighteen months after the effective
date of this Act: Provided further, That no determination made under this paragraph shall be considered a
denial of total participation for the purposes of section
8(a)(9) of the Small Business Act.’’
SMALL BUSINESS EMPLOYEE OWNERSHIP;
CONGRESSIONAL FINDINGS AND PURPOSES
Pub. L. 96–302, title V, §§ 502, 503, July 2, 1980, 94 Stat.
850, 851, provided that:
‘‘SEC. 502. The Congress hereby finds and declares
that—

§ 636

TITLE 15—COMMERCE AND TRADE

‘‘(1) employee ownership of firms provides a means
for preserving jobs and business activity;
‘‘(2) employee ownership of firms provides a means
for keeping a small business small when it might
otherwise be sold to a conglomerate or other large
enterprise;
‘‘(3) employee ownership of firms provides a means
for creating a new small business from the sale of a
subsidiary of a large enterprise;
‘‘(4) unemployment insurance programs, welfare
payments, and job creation programs are less desirable and more costly for both the Government and
program beneficiaries than loan guarantee programs
to maintain employment in firms that would otherwise be closed, liquidated, or relocated; and
‘‘(5) by guaranteeing loans to qualified employee
trusts and similar employee organizations, the Small
Business Administration can provide feasible and desirable methods for the transfer of all or part of the
ownership of a small business concern to its employees.
‘‘SEC. 503. (a) The purposes of this title [enacting sections 632(c) and 636(a)(8) of this title and provisions set
out as notes under sections 631 and 636 of this title]
are—
‘‘(1) to provide that a qualified employee trust shall
be eligible for loan guarantees under section 7(a) of
the Small Business Act [subsec. (a) of this section]
with respect to a small business concern, regardless
of the percentage of stock of the concern held by the
trust, and
‘‘(2) to provide in section 505 of this Act [enacting
subsec. (a)(8) of this section] authority to address the
specific case in which the Small Business Administration guarantees loans under section 7(a) of the
Small Business Act [subsec. (a) of this section] for
purposes of providing funds to a qualified employee
trust (and other employee organizations which are
treated as qualified employee trusts) for the purchase, by at least 51 percent of the employees, of at
least 51 percent of the stock of business which is operated for profit and which is—
‘‘(A) a small business concern, or
‘‘(B) a corporation which is controlled by another
person if, after the plan for the purchase of such
corporation is carried out, such corporation would
be a small business concern.
‘‘(b) Nothing in this title shall be construed to prohibit the Small Business Administration from making
loan guarantees under section 7(a) of the Small Business Act [subsec. (a) of this section] to qualified employee trusts which own less than 51 percent of the
stock of a continuing business.’’
TERMINATION OF ADVISORY COMMITTEES
Advisory committees established after Jan. 5, 1973, to
terminate not later than the expiration of the 2-year
period beginning on the date of their establishment,
unless, in the case of a committee established by the
President or an officer of the Federal Government, such
committee is renewed by appropriate action prior to
the expiration of such 2-year period, or in the case of
a committee established by the Congress, its duration
is otherwise provided for by law. See section 14 of Pub.
L. 92–463, Oct. 6, 1972, 86 Stat. 776, set out in the Appendix to Title 5, Government Organization and Employees.
DISASTER RELIEF AUTHORITY; STUDY AND REPORT ON
CONSOLIDATION
Pub. L. 94–305, title I, § 101, June 4, 1976, 90 Stat. 663,
provided that: ‘‘The President shall undertake a comprehensive review of all Federal disaster loan authorities and shall make a report to the Congress, not later
than December 1, 1976, containing such recommendations and legislative proposals, including possible consolidation of Federal disaster loan authorities, as may
be demonstrated to be necessary and appropriate to assure the most effective and efficient delivery of disas-

Page 778

ter relief. Such study shall give particular emphasis to
alleviating any extraordinary burden the management
of Federal disaster loan programs may impose on an
agency.’’
DISASTER LOANS; SPECIAL PROVISIONS FOR APPLICATIONS RECEIVED ON OR BEFORE MARCH 19, 1981; ASSISTANCE TO HARDSHIP APPLICANTS
Pub. L. 97–35, title XIX, § 1916, Aug. 13, 1981, 95 Stat.
780, provided that:
‘‘(a) Notwithstanding section 5(b)(6) of the Small
Business Act [section 634(b)(6) of this title], or any
other provision of law, any business concern applicant
for assistance made pursuant to paragraph (1), (2), or (4)
of subsection 7(b) of the Small Business Act [subsec.
(b)(1), (2), or (4) of this section] whose application was
received but not approved by the Small Business Administration on or before March 19, 1981, shall be offered loan assistance by the Small Business Administration as provided in this section.
‘‘(b) The Small Business Administration is specifically directed to reconsider and act upon any such application and to make, remake, obligate, reobligate,
commit or recommit such financing as provided herein.
‘‘(c) If the applicant was a business concern able to
obtain credit elsewhere, the terms and conditions shall
be those specified in section 7(b)(3) of the Small Business Act [subsec. (b)(3) of this section]; but if the Administrator determines that imposition of these provisions would impose a substantial hardship on the applicant, he may, in his discretion on a case-by-case basis
waive these provisions and provide assistance in accord
with rules and regulations in effect for the date the disaster commenced for applicants able to secure credit
elsewhere. If the applicant was a business concern unable to obtain credit elsewhere, or was an applicant
under sections 7(b)(2) or 7(b)(4) of the Small Business
Act [subsec. (b)(2) or (4) of this section], the terms and
conditions shall be those in effect for such applicants
on the date such application was first received. As used
herein, the term ‘credit elsewhere’ shall have the
meaning prescribed by the Small Business Act as
amended herein [this chapter].’’
DISASTER LOANS; INTEREST RATE; CANCELLATION OF
LOANS
Pub. L. 93–24, § 9, Apr. 20, 1973, 87 Stat. 25, provided
that: ‘‘Notwithstanding the provisions of any other
law, any loan made by the Small Business Administration in connection with any disaster occurring on or
after the date of enactment of this Act [Apr. 20, 1973]
under sections 7(b)(1), (2), or (4) of the Small Business
Act (15 U.S.C. 636(b)(1), (2), or (4)) [subsec. (b)(1), (2), or
(4) of this section] shall bear interest at the rate determined under section 324 of the Consolidated Farm and
Rural Development Act, as amended by section 4 of this
Act [section 1964 of Title 7, Agriculture]. No portion of
any such loan shall be subject to cancellation under the
provisions of any law.’’
INTEREST RATES ON LOANS TO MEET REGULATORY
STANDARDS
Pub. L. 93–237, § 2(d), Jan. 2, 1974, 87 Stat. 1024, provided that: ‘‘In no case shall the interest rate charged
for loans to meet regulatory standards be lower than
loans made in connection with physical disasters.’’
ELECTION OF BENEFITS
Pub. L. 92–385, § 1(c), Aug. 16, 1972, 86 Stat. 555, provided that: ‘‘Any person who (1) suffers any loss or
damage as a result of a major disaster as determined by
the President which occurred prior to the date of enactment of this Act [August 16, 1972], (2) is eligible for assistance under the amendment made by subsection (a),
and (3) is otherwise eligible for benefits greater than
those provided by the amendment made by subsection
(a), may elect to receive such greater benefits.’’
FUND FOR MANAGEMENT COUNSELING
Pub. L. 85–699, title VI, § 602(a), (b), Aug. 21, 1958, 72
Stat. 698, provided that:

Page 779

§ 636c

TITLE 15—COMMERCE AND TRADE

‘‘(a) Within sixty days after the enactment of this
Act [Aug. 21, 1958], each Federal Reserve bank shall pay
to the United States the aggregate amount which the
Secretary of the Treasury has heretofore paid to such
bank under the provisions of section 13b of the Federal
Reserve Act [12 U.S.C. 352a]; and such payment shall
constitute a full discharge of any obligation or liability
of the Federal Reserve bank to the United States or to
the Secretary of the Treasury arising out of subsection
(e) of said section 13b [12 U.S.C. 352a(e)] or out of any
agreement thereunder.
‘‘(b) The amounts repaid to the United States pursuant to subsection (a) of this section shall be covered
into a special fund in the Treasury which shall be available for grants under section 7(d) of the Small Business
Act [subsec. (d) of this section]. Any remaining balance
of funds set aside in the Treasury for payments under
section 13b of the Federal Reserve Act [12 U.S.C. 352a]
shall be covered into the Treasury as miscellaneous receipts.’’
LOANS FOR MODIFICATIONS OF MINING FACILITIES AND
EQUIPMENT
Pub. L. 91–173, title V, § 504(d), Dec. 30, 1969, 83 Stat.
802, provided that: ‘‘Loans may also be made or guaranteed for the purposes set forth in section 7(b)(5) of the
Small Business Act, as amended [subsec. (b)(5) of this
section], pursuant to the provisions of section 202 of the
Public Works and Economic Development Act of 1965,
as amended [42 U.S.C. 3142].’’
EXECUTIVE ORDER NO. 12190
Ex. Ord. No. 12190, Feb. 1, 1980, 45 F.R. 7773, established the Advisory Committee on Small and Minority
Business Ownership to assist in monitoring and encouraging the placement of subcontracts by the private sector with eligible small businesses, to study and propose
incentives and assistance needed by the private sector
to help in the training, development, and upgrading of
such businesses, to make periodic reports and recommendations to the President, and to report annually to
the President and to the Congress on the activities of
the Committee and provided for termination of the
Committee on Dec. 31, 1980.
EXTENSION OF TERM OF ADVISORY COMMITTEE ON SMALL
AND MINORITY BUSINESS OWNERSHIP
Term of the Advisory Committee on Small and Minority Business Ownership extended until Dec. 31, 1982,
by Ex. Ord. No. 12258, Dec. 31, 1980, 46 F.R. 1251, set out
as a note under section 14 of the Federal Advisory Committee Act in the Appendix to Title 5, Government Organization and Employees.
Term of the Advisory Committee on Small and Minority Business Ownership extended until Sept. 30, 1984,
by Ex. Ord. No. 12399, Dec. 31, 1982, 48 F.R. 379, formerly
set out as a note under section 14 of the Federal Advisory Committee Act in the Appendix to Title 5.
Term of the Advisory Committee on Small and Minority Business Ownership extended until Sept. 30, 1985,
by Ex. Ord. No. 12489, Sept. 28, 1984, 49 F.R. 38927, formerly set out as a note under section 14 of the Federal
Advisory Committee Act in the Appendix to Title 5.
Term of the Advisory Committee on Small and Minority Business Ownership extended until Sept. 30, 1987,
by Ex. Ord. No. 12534, Sept. 30, 1985, 50 F.R. 40319, formerly set out as a note under section 14 of the Federal
Advisory Committee Act in the Appendix to Title 5.
Term of the Advisory Committee on Small and Minority Business Ownership extended until Sept. 30, 1989,
by Ex. Ord. No. 12610, Sept. 30, 1987, 52 F.R. 36901, formerly set out as a note under section 14 of the Federal
Advisory Committee Act in the Appendix to Title 5.
Term of the Advisory Committee on Small and Minority Business Ownership extended until Sept. 30, 1991,
by Ex. Ord. No. 12692, Sept. 29, 1989, 54 F.R. 40627, formerly set out as a note under section 14 of the Federal
Advisory Committee Act in the Appendix to Title 5,
which extension was revoked by amendment of Ex. Ord.

No. 12692, by Ex. Ord. No. 12704, Feb. 26, 1990, 55 F.R.
6969.

§ 636a. Repealed. Pub. L. 97–35, title XIX, § 1917,
Aug. 13, 1981, 95 Stat. 781
Section, Pub. L. 91–606, title II, § 231, Dec. 31, 1970, 84
Stat. 1752; Pub. L. 92–385, § 6, Aug. 16, 1972, 86 Stat. 559,
related to small business disaster loans.
EFFECTIVE DATE OF REPEAL
Repeal effective Aug. 13, 1981, but not to affect any financing made, obligated, or committed under this
chapter or chapter 14B of this title prior to Aug. 13,
1981, see section 1918 of Pub. L. 97–35, set out as an Effective Date of 1981 Amendment note under section 631
of this title.

§ 636b. Disaster loan interest rates
Any loan made under section 636a 1 of this title
and section 4452 1 of title 42 shall not exceed the
current cost of repairing or replacing the disaster injury, loss, or damage in conformity with
current codes and specifications. Any loan made
under sections 636a 1 and 636d of this title, and
sections 3538 and 4452 1 of title 42 shall bear interest at a rate determined by the Secretary of
the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity of ten to twelve
years reduced by not to exceed 2 per centum per
annum. In no event shall any loan made under
this section bear interest at a rate in excess of
6 per centum per annum.
(Pub. L. 91–606, title II, § 234, Dec. 31, 1970, 84
Stat. 1754.)
REFERENCES IN TEXT
Section 636a of this title, referred to in text, was repealed by Pub. L. 97–35, title XIX, § 1917, Aug. 13, 1981,
95 Stat. 781.
Section 4452 of title 42, referred to in text, was repealed by Pub. L. 93–24, § 7, Apr. 20, 1973, 87 Stat. 25.
CODIFICATION
Section was enacted as part of the Disaster Relief Act
of 1970, and not as part of the Small Business Act which
comprises this chapter. Section was formerly classified
to section 4453 of Title 42, The Public Health and Welfare.
EFFECTIVE DATE
Section effective Dec. 31, 1970, see section 304 of Pub.
L. 91–606, set out as an Effective Date of 1970 Amendment note under section 165 of Title 26, Internal Revenue Code.

§ 636c. Age of applicant for disaster loans
In the administration of any Federal disaster
loan program under the authority of section
636a 1 of this title, section 4452 1 of title 42, or
section 233 of Public Law 91–606, the age of any
adult loan applicant shall not be considered in
determining whether such loan should be made
or the amount of such loan.
(Pub. L. 91–606, title II, § 235, Dec. 31, 1970, 84
Stat. 1754.)
REFERENCES IN TEXT
Section 636a of this title, referred to in text, was repealed by Pub. L. 97–35, title XIX, § 1917, Aug. 13, 1981,
95 Stat. 781.
1 See
1 See

References in Text note below.
References in Text note below.