II 109th CONGRESS 1st Session S. 1603 IN THE SENATE OF THE UNITED STATES July 29, 2005 Ms. Snowe introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To establish a National Preferred Lender Program, facilitate the delivery of financial assistance to small businesses, and for other purposes.

1.

Short title

This Act may be cited as the Small Business Lending Improvement Act of 2005.

2.

National preferred lenders program

Section 7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is amended by adding at the end the following: (E)

National preferred lenders program

(i)

Establishment

There is established the National Preferred Lenders Program in the Preferred Lenders Program operated by the Administration, in which a participant may operate as a preferred lender in any State if such lender meets appropriate eligibility criteria established by the Administration. (ii)

Terms and conditions

An applicant shall be approved under the following terms and conditions: (I)

Term

Each participant approved under this subparagraph shall be eligible to make loans for not more than 2 years under the program established under this subparagraph. (II)

Renewal

At the expiration of the term described in subclause (I), the authority of a participant to make loans for the program established under this subparagraph may be renewed based on a review of performance during the previous term. (III)

Effect of failure

Failure to meet the criteria under this subparagraph shall not affect the eligibility of a participant to continue as a preferred lender in a State or district in which the participant is in good standing. (iii)

Implementation

(I)

Regulations

As soon as is practicable, the Administrator shall promulgate regulations to implement the program established under this subparagraph. (II)

Program implementation

Not later than 120 days after the date of enactment of this subparagraph, the Administrator shall implement the program established under this subparagraph. .

3.

Maximum loan amount

Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 636(a)(3)(A)) is amended by striking $1,500,000 (or if the gross loan amount would exceed $2,000,000) and inserting $2,250,000 (or if the gross loan amount would exceed $3,000,000).

4.

Section 7(a) authorization for fiscal year 2006

Section 20(e)(1)(B)(i) of the Small Business Act (15 U.S.C. 631 note) is amended by striking $17,000,000,000 and inserting $18,000,000,000.

5.

Alternative size standard

Section 3(a)(3) of the Small Business Act (15 U.S.C. 632(a)(3)) is amended— (1)by striking When establishing and inserting the following: Establishment of Size Standards.—(A)

In general

When establishing ; and (2)by adding at the end the following: (B)

Alternative size standard

(i)

In general

Not later than 180 days after the date of enactment of this subparagraph, the Administrator shall establish an alternative size standard under paragraph (2), that shall be applicable to loan applicants under section 7(a) or under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.). (ii)

Criteria

The alternative size standard established under clause (i) shall utilize the maximum net worth and maximum net income of the prospective borrower as an alternative to the use of industry standards. (iii)

Interim rule

Until the Administrator establishes an alternative size standard under clause (i), the Administrator shall use the alternative size standard in section 121.301(b) of title 13, Code of Federal Regulations, for loan applicants under section 7(a) or under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.). .