[Congressional Record Volume 166, Number 158 (Monday, September 14, 2020)]
[House]
[Pages H4344-H4345]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   MICROLOAN IMPROVEMENT ACT OF 2020

  Ms. VELAZQUEZ. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6079) to amend the Small Business Act to optimize the 
operations of the microloan program, lower costs for small business 
concerns and intermediary participants in the program, and for other 
purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6079

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Microloan 
     Improvement Act of 2020''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Interest rate for certain intermediaries.
Sec. 3. Lines of credit authorized.
Sec. 4. Extended repayment terms.
Sec. 5. Loan limits adjusted.
Sec. 6. Program funding for microloans.
Sec. 7. Technical assistance grant flexibility.
Sec. 8. Credit reporting information.
Sec. 9. Report regarding equitable distribution.

     SEC. 2. INTEREST RATE FOR CERTAIN INTERMEDIARIES.

       Section 7(m)(3)(F)(iii) of the Small Business Act (15 
     U.S.C. 636(m)(3)(F)(iii)) is amended by striking ``$7,500'' 
     and inserting ``$10,000''.

     SEC. 3. LINES OF CREDIT AUTHORIZED.

        Section 7(m)(6)(A) of the Small Business Act (15 U.S.C. 
     636(m)(6)(A)) is amended by inserting ``(including lines of 
     credit)'' after ``fixed rate loans''.

     SEC. 4. EXTENDED REPAYMENT TERMS.

        Section 7(m)(6) of the Small Business Act (15 U.S.C. 
     636(m)(6)) is amended by adding at the end the following:
       ``(F) Repayment terms.--
       ``(i) Limitation on repayments term.--The repayment term 
     for a loan made under this paragraph shall not be more than--

       ``(I) in the case of a loan made by an intermediary of 
     $10,000 or less, 7 years; and
       ``(II) in the case of a loan made by an intermediary of 
     greater than $10,000, 10 years.

       ``(ii) No additional limitations.--The Administrator may 
     not impose any additional limitation on the term for 
     repayment of a loan made by an intermediary under this 
     paragraph.''.

     SEC. 5. LOAN LIMITS ADJUSTED.

       Section 7(m)(3)(C) of the Small Business Act (15 U.S.C. 
     636(m)(3)(C)) is amended by striking ``and $6,000,000'' and 
     inserting ``and $7,000,000 (in the aggregate)''.

     SEC. 6. PROGRAM FUNDING FOR MICROLOANS.

       (a) In General.--Section 7(m) of the Small Business Act (15 
     U.S.C. 636(m)) is amended--
       (1) in paragraph (7)(B)--
       (A) by amending clause (i) to read as follows:
       ``(i) Allocation.--Subject to the availability of 
     appropriations and for the first 2 quarters of a fiscal year, 
     of the total amount of new loan funds made available for 
     award under this subsection in such fiscal year, the 
     Administrator shall--

       ``(I) reserve 15 percent of such funds for award to 
     designated underutilized States; and
       ``(II) make the remaining 85 percent of such funds 
     available for award in any State.''; and

       (B) in clause (ii), by striking ``to carry out'' and all 
     that follows through the period at the end and inserting the 
     following: ``under clause (i)(I) remains unexpended, the 
     Administrator may make that portion available for award in 
     any State or designated underutilized State.''; and
       (2) in paragraph (11)--
       (A) in subparagraph (C)(ii), by striking the period at the 
     end and inserting ``; and''; and
       (B) by adding at the end the following new subparagraph:
       ``(D) the term `State' means each of the several States, 
     the District of Columbia, the Commonwealth of Puerto Rico, 
     the United States Virgin Islands, Guam, the Northern Mariana 
     Islands, and American Samoa.''.
       (b) Rulemaking.--Not later than 180 days after the date of 
     the enactment of this Act, the Administrator of the Small 
     Business Administration shall issue regulations to define the 
     term ``designated underutilized State'', as used in section 
     7(m)(7)(B) of the Small Business Act (15 U.S.C. 
     636(m)(7)(B)), as added by this section.

     SEC. 7. TECHNICAL ASSISTANCE GRANT FLEXIBILITY.

       Section 7(m)(4) of the Small Business Act (15 U.S.C. 
     636(m)(4)) is amended--
       (1) in subparagraph (A), by striking ``subparagraph (C)'' 
     each place that term appears and inserting ``subparagraphs 
     (C) and (G)'';
       (2) in subparagraph (C)(i)--
       (A) by striking ``subparagraph (A)'' and inserting 
     ``subparagraphs (A) and (G)''; and
       (B) by striking the dollar figure and inserting 
     ``$10,000'';
       (3) in subparagraph (D), by striking ``subparagraph (A), or 
     (C)'' and inserting ``subparagraph (A), (C), or (G)''; and
       (4) by adding at the end the following:
       ``(G) Grant amounts based on appropriations.--In any fiscal 
     year in which the amount appropriated to make grants under 
     subparagraph (A) is sufficient to provide to each 
     intermediary that receives a loan under paragraph (1)(B)(i) a 
     grant of not less than 25 percent of the total outstanding 
     balance of loans made to the intermediary under this 
     subsection, the Administrator shall make a grant under 
     subparagraph (A) to each intermediary of not less than 25 
     percent and not more than 30 percent of that total 
     outstanding balance.''.

     SEC. 8. CREDIT REPORTING INFORMATION.

       The Administrator of the Small Business Administration 
     shall issue rules establishing a process under which an 
     intermediary that makes a loan to a borrower under section 
     7(m) of the Small Business Act (15 U.S.C. 636(m)) shall be 
     required to provide the major credit reporting agencies with 
     information about the borrower relevant to credit reporting, 
     such as the borrower's payment activity on the loan.

     SEC. 9. REPORT REGARDING EQUITABLE DISTRIBUTION.

       Section 7(m)(8) of the Small Business Act (15 U.S.C. 
     636(m)(8)) is amended--
       (1) by striking ``In approving'' and inserting the 
     following:
       ``(A) In general.--In approving''; and
       (2) by adding at the end the following:
       ``(B) Annual report.--The Administrator shall include in 
     the report submitted under paragraph (10), and make publicly 
     available on the website of the Administration, information 
     on how the Administration has met the requirements of 
     subparagraph (A).''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
New York (Ms. Velazquez) and the gentleman from Ohio (Mr. Chabot) each 
will control 20 minutes.
  The Chair recognizes the gentlewoman from New York.


                             GENERAL LEAVE

  Ms. VELAZQUEZ. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and included extraneous material on the measure under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from New York?
  There was no objection.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of the bill before us today, H.R. 
6079, the Microloan Improvement Act of 2020, a bill that makes 
important improvements to the SBA's microloan program.

[[Page H4345]]

  Many entrepreneurs lack the experience as business owners, which is 
needed to demonstrate their creditworthiness to conventional lenders. 
We have heard time and again the heart-wrenching stories from 
entrepreneurs about the challenges they face, not just securing 
capital, but also operating their businesses.
  While the SBA has numerous programs designed to meet each of these 
challenges, the microloan program is unique in that it provides 
entrepreneurs with both the affordable capital needed to start up and 
the technical assistance needed to boost their ability to succeed and 
repay.
  This program is a key resource for startup, newly established, and 
growing small businesses. It has provided millions of dollars in 
financing and technical assistance to small businesses and 
entrepreneurs since its inception.
  By providing loans to nonprofit intermediaries, which in turn lend 
funds to the smallest of small businesses, the program helps borrowers 
streamline their operations, grow to profitability, and create new 
jobs.
  The microloan program was a critical piece of the puzzle to grow the 
Nation's entrepreneurs before the pandemic. It is now more important 
than ever to strengthen and modernize the program as we face a 
sustained economic recession in the middle of a global pandemic.
  Earlier this Congress, the Subcommittee on Economic Growth, Tax and 
Capital Access, under the leadership of Mr.   Andy Kim, held a hearing 
on the microloan program where we heard from a panel of intermediaries 
who reported that some of the program's rules, largely unchanged since 
1991, are outdated and restricting them from meeting today's demand for 
startup financing and providing more technical assistance.
  In response, Mr. Kim worked hard with Mr. Burchett to craft the 
Microloan Improvement Act of 2020, a series of reasonable proposals 
designed to update the program's rules and ultimately help microloan 
intermediaries extend more affordable capital to first-time 
entrepreneurs.
  Just a few of the central changes in the bill include eliminating an 
outdated and onerous rule that has restricted the ability of high-
volume intermediaries to meet demand in their respective States, 
lowering interest rates for eligible intermediaries, and extending 
repayment terms in a tiered manner to provide greater flexibility to 
businesses.
  These changes are long overdue, and I am pleased that we are taking a 
vote on them today.
  Finally, I want to thank Mr. Kim and Mr. Burchett for their hard work 
and applaud their efforts to make bipartisan improvements to this 
valuable program.
  I recommend a ``yes'' to all my colleagues in the House, and I 
reserve the balance of my time.
  Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, in order to assist small-dollar borrowers, the SBA 
offers the microloan program, where small businesses can receive loans 
of up to $50,000 or less from nonprofit intermediaries.
  Beyond the financing support, the microloan program also requires 
these nonprofit intermediaries to deliver technical assistance and 
counseling to small business borrowers.
  This two-pronged approach has proven again and again to provide 
lower-dollar borrowers a leg up in starting or sustaining their small 
businesses. The program registered record highs in fiscal year 2019, 
with over 5,500 loans approved for over $80 million.
  I want to thank the gentleman from New Jersey (Mr. Kim) and the 
gentleman from Tennessee (Mr. Burchett) for working in a bipartisan 
manner to introduce H.R. 6079, the Microloan Improvement Act of 2020.
  This bill builds on the strengths of the program by introducing 
flexibility and more features for small-dollar borrowers to utilize as 
they move through the microloan lending process.
  H.R. 6079 gives microloan intermediaries the ability to offer lines 
of credit within the microloan program and increases the outstanding 
limit each microloan intermediary may carry from $6 million to $7 
million.
  Additionally, H.R. 6079 replaces the outdated and burdensome one-
fifty-fifth rule that prevents microloan intermediaries from accessing 
the program in the first two fiscal quarters of each year with a 
reserve fund that ensures both large and small States have the ability 
to utilize the program.
  Finally, H.R. 6079 introduces a flexible grant process that has the 
potential to reward extra assistance to each microloan intermediary if 
overflow exists.
  I fully support this commonsense legislation, and I urge my 
colleagues to vote ``yes.''
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I have no further speakers, and I reserve 
the balance of my time.
  Mr. CHABOT. Mr. Speaker, I have no speakers, and I yield myself the 
balance of my time for the purpose of closing.
  Mr. Speaker, I urge my colleagues to support this bipartisan 
legislation. Microloans offered by the SBA serve our Nation's smallest 
of small businesses.
  The increased flexibility this legislation permits will allow lenders 
and borrowers to fully utilize the benefits of this program to the 
maximum extent possible.
  It is a good bill, and I would urge my colleagues to support it.
  Mr. Speaker, I yield back the balance of my time.

                              {time}  1430

  Ms. VELAZQUEZ. Mr. Speaker, in its nearly 30 years, the SBA microloan 
program has enjoyed a track record of success in delivering affordable 
startup capital, particularly for women and minority-owned 
entrepreneurs. The SBA microloan program has helped to launch many 
successful businesses.
  As the chair of the Small Business Committee, I have had the 
privilege to hear about countless success stories, and I have fought 
tirelessly over the years to ensure all American entrepreneurs have 
access to the SBA resources they need to launch and grow their 
businesses.
  In my time on this committee, I have been proud to watch the 
microloan program grow from a small pilot program to a robust lending 
program with strong stakeholder and congressional support. In many 
ways, the growth and success of the program mirror that of the many 
small businesses that got their start with an SBA microloan.
  Despite this success, and like any other Federal program, it must be 
periodically reviewed and modernized. This bill does just that and 
ensures the microloan program will remain flexible for intermediaries 
and borrowers, helping to ease access to the program for even more 
aspiring entrepreneurs.
  I want to applaud the work by the gentleman from New Jersey and the 
gentleman from Tennessee for their bipartisan work on the microloan 
program.
  Mr. Speaker, I encourage all my colleagues to vote ``yes,'' and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from New York (Ms. Velazquez) that the House suspend the 
rules and pass the bill, H.R. 6079.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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