[Federal Register Volume 60, Number 14 (Monday, January 23, 1995)]
[Rules and Regulations]
[Pages 4372-4373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1503]
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[[Page 4373]]
SMALL BUSINESS ADMINISTRATION
13 CFR Part 122
Business Loans--Export Loans
AGENCY: Small Business Administration (SBA).
ACTION: Final rule.
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SUMMARY: Under this final rule, SBA is implementing certain provisions
of the ``Small Business Administration Reauthorization and Amendments
Act of 1994'', enacted on October 22, 1994, which are relevant to its
guaranteed lending programs with respect to export revolving line of
credit loans (ERLC) and international trade loans. With respect to ERLC
loans, the rule deletes the present regulatory provision limiting such
loans to a maturity of three years. In addition, the regulation also
provides that SBA may guarantee standby letters of credit issued in
connection with ERLC lending. With respect to international trade
loans, the rule increases the percentage of the loan which SBA may
guarantee from 85 percent to 90 percent. Under the rule, up to $750,000
(instead of $250,000) of an international trade loan could be used for
working capital, supplies or ERLC financing.
EFFECTIVE DATES: This rule is effective January 23, 1995.
FOR FURTHER INFORMATION CONTACT:
John R. Cox, 202/205-6490.
SUPPLEMENTARY INFORMATION: Pub. L. 103-403 was enacted on October 22,
1994 (1994 legislation). Because this final rule is amending the
regulations to reflect literal statutory changes made by the 1994
legislation, SBA is publishing this final rule without opportunity for
prior public comment pursuant to 5 U.S.C. 553(b)(A). However, SBA
solicits and will consider any comments it receives with respect to
this final rule in making adjustments to the ERLC program.
Consistent with section 209 of the 1994 legislation, section
122.54-1 of SBA's regulations (13 CFR Sec. 122.54-1), which sets forth
the policy concerning ERLC loans, is amended to eliminate the
limitation on the term of those loans to three years. This means that,
because of the 1994 legislation, ERLC loans may now be made with
maturity periods in excess of three years. Section 209 of the 1994
legislation also authorizes SBA to guarantee standby letters of credit
issued in connection with export revolving lines of credit, and
Sec. 122.54-1 is amended to reflect this statutory change.
With respect to international trade loans, consistent with Sec. 211
of the 1994 legislation, section 122.57-3 of SBA's regulations (13 CFR
Sec. 122.57-3) is amended by substituting a 90 percent SBA guaranty in
lieu of the former 85 percent guaranty. In addition, to reflect section
210 of the 1994 legislation, section 122.57-3 is further amended to
allow up to $750,000 (increased from the present $250,000) of an
international trade loan to be used for working capital, supplies or
ERLC financing. Thus, under this final rule, SBA is authorized to
provide greater assistance to borrowers engaged in international trade
by providing an increased guaranty, and the small business concern may
obtain additional benefits because it may apply a larger portion of its
loan for working capital, supplies and ERLC financing.
Compliance With Executive Orders 12612, 12778 and 12866, the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq. and the Paperwork Reduction Act,
44 U.S.C. Ch. 35
For purposes of the Regulatory Flexibility Act, 5 U.S.C. 601 et
seq., SBA certifies that this final rule does not have a significant
economic impact on a substantial number of small entities.
SBA certifies that this final rule does not constitute a
significant regulatory action for the purposes of Executive Order
12866, since the change is not likely to result in an annual effect on
the economy of $100 million or more.
SBA certifies that the final rule does not impose additional
reporting or recordkeeping requirements which would be subject to the
Paperwork Reduction Act, 44 U.S.C. Chapter 35.
This final rule does not have federalism implications warranting
the preparation of a Federalism Assessment in accordance with Executive
Order 12612.
For purposes of Executive Order 12778, SBA certifies that this
final rule is drafted, to the extent practicable, in accordance with
the standards set forth in section 2 of that Order.
(Catalog of Federal Domestic Assistance Programs, No. 59.012)
List of Subjects in 13 CFR Part 122
Exports, Loan programs--business, Small businesses.
Accordingly, pursuant to the authority contained in section 5(b)(6)
of the Small Business Act (15 U.S.C. 634(b)(6), SBA amends part 122,
chapter I, title 13, Code of Federal Regulations, as follows:
PART 122--BUSINESS LOANS
1. The authority citation for part 122 continues to read as
follows:
Authority: 15 U.S.C. 634(b)(6), 636(a), 636(m).
2. Section 122.54-1 is revised to read as follows:
Sec. 122.54-1 Policy.
The Act authorizes a revolving line of credit for export purposes
generally including, but not limited to, the development of foreign
markets. SBA may guarantee standby letters of credit issued in
connection with revolving lines of credit for export purposes.
3. Section 122.57-3 is revised to read as follows:
Sec. 122.57-3 Amount and percentage of loan guaranty.
A guaranty commitment made by SBA pursuant to section 7(a)(16) of
the Act shall not exceed 90 percent of the amount of the loan. Such
guaranty commitment by SBA shall not exceed $1,250,000, of which not
more than $750,000 may be used for working capital, supplies, or
financings for export revolving lines of credit under Sec. 122.54. The
aggregate amount of $1,250,000 available from the business loan and
investment fund under this section shall be reduced by any other
financing from SBA pursuant to section 7(a) of the Act.
Dated: December 21, 1994.
Philip Lader,
Administrator.
[FR Doc. 95-1503 Filed 1-20-95; 8:45 am]
BILLING CODE 8025-01-M