Section 1 Short title
This Act may be cited as the “Increasing Access to Capital Act of 2020”.
Increasing Access to Capital Act of 2020
A BILL
To temporarily reduce fees for certain loans under the Small Business Administration, to increase guarantee amounts on certain loans, and for other purposes.
Sec. 2 Temporary fee reductions
Purpose— The purpose of the section is to waive borrower and lender fees on loans, including a permanent fix to waive fees for veterans and their spouses.
Administrative fee waiver—
In general— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, and to the extent that the cost of such elimination or reduction of fees is offset by appropriations, with respect to each loan guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) (including a recipient of assistance under the Community Advantage Pilot Program of the Administration) for which an application is approved or pending approval on or after the date of enactment of this Act, the Administrator shall—
in lieu of the fee otherwise applicable under section 7(a)(23)(A) of the Small Business Act (15 U.S.C. 636(a)(23)(A)), collect no fee or reduce fees to the maximum extent possible; and
in lieu of the fee otherwise applicable under section 7(a)(18)(A) of the Small Business Act (15 U.S.C. 636(a)(18)(A)), collect no fee or reduce fees to the maximum extent possible.
Application of fee eliminations or reductions— To the extent that amounts are made available to the Administrator for the purpose of fee eliminations or reductions under paragraph (1), the Administrator shall—
first use any amounts provided to eliminate or reduce fees paid by small business borrowers under clauses (i) through (iii) of section 7(a)(18)(A) of the Small Business Act (15 U.S.C. 636(a)(18)(A)), to the maximum extent possible; and
then use any amounts provided to eliminate or reduce fees under 7(a)(23)(A) of the Small Business Act (15 U.S.C. 636(a)(23)(A)).
Exception To guarantee fee waiver for veterans— Section 7(a)(31)(G) of the Small Business Act (15 U.S.C. 636(a)(31)(G)) is amended—
by striking clause (ii); and
by redesignating clause (iii) as clause (ii).
Temporary fee elimination for the 504 loan program—
In general— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, and to the extent the cost of such elimination in fees is offset by appropriations, with respect to each project or loan guaranteed by the Administrator pursuant to title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) for which an application is approved or pending approval on or after the date of enactment of this Act—
the Administrator shall, in lieu of the fee otherwise applicable under section 503(d)(2) of the Small Business Investment Act of 1958 (15 U.S.C. 697(d)(2)), collect no fee; and
a development company shall, in lieu of the processing fee under section 120.971(a)(1) of title 13, Code of Federal Regulations (relating to fees paid by borrowers), or any successor thereto, collect no fee.
Reimbursement for waived fees—
In general— To the extent that the cost of such payments is offset by appropriations, the Administrator shall reimburse each development company that does not collect a processing fee pursuant to paragraph (1)(B).
Amount— The payment to a development company under subparagraph (A) shall be in an amount equal to 1.5 percent of the net debenture proceeds for which the development company does not collect a processing fee pursuant to paragraph (1)(B).
Sec. 3 Guarantee amounts
Purpose— The purpose of this section is to increase loan guarantee amounts in order to mitigate risk for lenders and keep credit flowing, including an emphasis on underserved borrowers.
7(a) loan guarantees—
In general— Section 7(a)(2)(A) of the Small Business Act (15 U.S.C. 636(a)(2)(A)) is amended by striking “), such participation by the Administration shall be equal to” and all that follows through the period at the end and inserting “or the Community Advantage Pilot Program of the Administration), such participation by the Administration shall be equal to 90 percent of the balance of the financing outstanding at the time of disbursement of the loan.”.
Termination— Effective September 30, 2021, section 7(a)(2)(A) of the Small Business Act (15 U.S.C. 636(a)(2)(A)), as amended by paragraph (1), is amended to read as follows:
“(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.”
Express loan guarantee amounts and loan size increases—
Temporary modification— Section 7(a)(31) of the Small Business Act (15 U.S.C. 636(a)(31)) is amended—
in subparagraph (A)(iv), by striking “with a guaranty rate of not more than 50 percent.” and inserting the following:
“(I) for a loan in an amount less than or equal to $350,000, of not more than 90 percent; and
“(II) for a loan in an amount greater than $350,000, of not more than 75 percent.”
in subparagraph (D), by striking “$350,000” and inserting “$1,000,000”.
Increase in availability— Effective September 30, 2021, section 7(a)(31) of the Small Business Act (15 U.S.C. 636(a)(31)), as amended by paragraph (1), is amended—
in subparagraph (A)(iv), by striking “guarantee rate” and all that follows through the period at the end and inserting “guarantee rate of not more than 50 percent.”; and
in subparagraph (D), by striking “$1,000,000” and inserting “$500,000”.
Sec. 4 Maximum loan amount and program levels for 7(a) loans
Purpose— The purpose of this section is to temporarily increase the maximum loan size in order to expand the reach of this long-term capital.
Maximum loan amount— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, with respect to any loan guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) for which an application is approved or pending approval on or after the date of enactment of this Act, the maximum loan amount shall be $10,000,000.
Program levels— During each of fiscal years 2020 and 2021, commitments for general business loans authorized under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) shall not exceed $75,000,000,000.
Sec. 5 Maximum loan amount for 504 loans
Purpose— The purpose of this section is to make refinancing of fixed assets more flexible for small business concerns seeking immediate financing and relief from the COVID–19 crisis.
Temporary increase— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, with respect to each project or loan guaranteed by the Administrator pursuant to title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) for which an application is approved or pending approval on or after the date of enactment of this Act, the maximum loan amount shall be $10,000,000.
Permanent increase for small manufacturers— Effective on October 1, 2021, section 502(2)(A)(iii) of the Small Business Investment Act of 1958 (15 U.S.C. 696(2)(A)(iii)) is amended by striking “$5,500,000” and inserting “$10,000,000”.