Regulation

SMALL BUSINESS ACT

§ 6. (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 act as depositaries, custodians, and fiscal
agents for the Administration in the general performance of its powers conferred by this Act.
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 4(c) of this Act. 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.
§ 7. (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 Act. 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,
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.—

(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

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(Rev. 13)