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Sec. 7

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(O) SUPPLEMENTAL COVERED LOANS.—A covered loan
under this paragraph may only be made to an eligible entity that—
(i) has received a loan under paragraph (36); and
(ii) on or before the expected date on which the
covered loan under this paragraph is disbursed to the
eligible entity, has used, or will use, the full amount
of the loan received under paragraph (36).
(b) Except as to agricultural enterprises as defined in section
18(b)(1) of this Act, 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—
(i) construction of retaining walls and sea walls;
(ii) grading and contouring land; and
(iii) relocating utilities and modifying structures, including construction of a safe room or similar storm shelter designed to protect property and occupants from tornadoes or other natural disasters, if such safe room or similar storm shelter is constructed in accordance with applicable standards issued by the Federal Emergency Management Agency;
(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 amount 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 immediate 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 exMarch 31, 2021

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tended 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, 28 (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.);
(B) a natural disaster, as determined by the Secretary
of Agriculture pursuant to section 321 of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1961), 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;
(C) a disaster, as determined by the Administrator of
the Small Business Administration;
(D) an emergency involving Federal primary responsibility determined to exist by the President under the section 501(b) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5191(b)); or
(E) if no disaster or emergency declaration has been
issued pursuant to subparagraph (A), (B), (C), or (D), the
Governor of a State in which a disaster or emergency 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 or emergency,
and (2) are in need of financial assistance which is not
available on reasonable terms in the disaster- or emergency-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, and may
then make such loans as would have been available under
this paragraph if a disaster or emergency 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: Provided
further, That for purposes of subparagraph (D), the Adminis28 So

in law. The comma before ‘‘(including drought)’’ probably should not appear.

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trator shall deem that such an emergency affects each State or
subdivision thereof (including counties), and that each State or
subdivision has sufficient economic damage to small business
concerns to qualify for assistance under this paragraph and the
Administrator shall accept applications for such assistance immediately.
(3)(A) In this paragraph—
(i) the term ‘‘active service’’ has the meaning given
that term in section 101(d)(3) of title 10, United States
Code;
(ii) 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 day-to-day operations of that small business concern;
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 perform active service for a period of
more than 30 consecutive days.
(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 service and ending on the
date that is 1 year after the date on which such essential employee is discharged or released from active service. 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 29 become due to
changed economic circumstances, a major source of employment in its surrounding area, as determined by the Adminis29 The

word ‘‘have’’ probably should be ‘‘has’’.

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tration, 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) 30 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—
(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 service.
(H) 30 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 Act 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 Act 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
30 Margins

for subparagraphs (G) and (H) of paragraph (3) so in law.

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