Private disaster loans

(a)

In general

Section 7 of the Small Business Act (15 U.S.C. 636) is amended— (1)by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and (2)by inserting after subsection (b) the following:

(c)

Private disaster loans

(1)

Definitions

In this subsection— (A)the term disaster area means a county, parish, or similar unit of general local government in which a disaster was declared under subsection (b); (B)the term eligible small business concern means a business concern that is— (i)is a small business concern, as defined in this Act; or (ii)is a small business concern, as defined in section 103 of the Small Business Investment Act of 1958; and (C)the term qualified private lender means any privately-owned bank or other lending institution that the Administrator determines meets the criteria established under paragraph (10). (2)

Authorization

The Administrator may guarantee timely payment of all principal and interest as scheduled on any loan issued— (A)by a qualified private lender to an eligible small business concern located in a disaster area; and (B)during the 24-month period beginning on the date on which the disaster area is designated. (3)

Use of loans

A loan guaranteed by the Administrator under this subsection may be used for— (A)any purpose authorized under subsection (a) or (b); and (B)acquiring or developing real estate for the purpose of selling or renting such real estate. (4)

Online applications

(A)

In general

(i)

Establishment

The Administrator may establish, directly or through an agreement with another entity, an online application process for loans guaranteed under this subsection. (ii)

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 clause (i) may be considered for any other Federal assistance program for disaster relief. (B)

Contents

(i)

In general

An online application process established under subparagraph (A) shall allow an applicant for a guarantee under this subsection to specify the qualified private lender from which the applicant seeks to obtain a loan. (ii)

Offers for loans

(I)

In general

If an applicant does not specify a qualified private lender under clause (i), any qualified private lender may be selected to or opt to consider the application. (II)

Process

The Administrator may, via the online process or another predetermined and objective process, determine a means of distributing or otherwise making available for consideration applications where a qualified private lender has not been specified by the applicant. (5)

Refinancing

A loan guaranteed under this subsection may be used to refinance any debt under this Act or the Small Business Investment Act of 1958. (6)

Maximum amounts

(A)

Guarantee percentage

The Administrator may guarantee not more than 85 percent of a loan under this subsection. (B)

Loan amounts

The maximum amount of a loan guaranteed under this subsection shall be $3,000,000. (7)

Loan term

The longest term of a loan for a loan guaranteed under this subsection shall be— (A)15 years for any loan that is issued without collateral; and (B)25 years for any loan that is issued with collateral. (8)

Fees

(A)

In general

The Administrator may not collect a guarantee fee under this subsection. (B)

Origination fee

The Administrator shall pay a qualified private lender an origination fee for a loan guaranteed under this subsection equal to 15/100 of 1 percent of the amount of the loan. (9)

Documentation

A qualified private lender may use its own loan documentation for a loan guaranteed by the Administrator, to the extent authorized by the Administrator, except that the Administrator may not require such use by regulation, or otherwise. (10)

Implementation

(A)

In general

Not later than 30 days after the date of enactment of this subsection, the Administrator shall— (i)establish interim criteria for qualified private lenders; and (ii)begin accepting applications from banks and lending institutions. (B)

Regulations

(i)

In general

Not later than 90 days after the date of enactment of this subsection, the Administrator shall promulgate regulations establishing permanent criteria for qualified private lenders. (ii)

Existing qualified private lenders

A bank or lending institution that the Administrator determined met the criteria established under subparagraph (A)(i) may continue to operate as a qualified private lender if the Administrator determines that such bank or lending institution meets the criteria established under clause (i). (11)

Other assistance

The fact that a small business concern receives assistance under this subsection shall not preclude such business concern from receiving other assistance under this Act. (12)

Authorization of appropriations

(A)

In general

Amounts necessary to carry out this subsection shall be made available from amounts appropriated to the Administration under subsection (b). (B)

Authority to reduce interest rates

Funds appropriated to the Administration to carry out this subsection, may be used by the Administrator, to the extent available, to reduce the applicable rate of interest for a loan guaranteed under this subsection by not more than 3 percentage points.

(b)

Effective date

(1)

In general

The amendments made by this section shall apply to disasters declared under section 7(b)(2) of the Small Business Act (631 U.S.C. 636(b)(2)) before, on, or after the date of enactment of this Act. (2)

Construction

For any disaster described in paragraph (1) that was declared before the date of enactment of this Act, the 24-month period described in section 7(c)(2)(B) of the Small Business Act, as amended by this Act, shall begin on the date on which such disaster was declared.