Microloan Improvement Act of 2020
This bill revises the microloan program through which the Small Business Administration (SBA) provides, through designated intermediaries, certain financial assistance to small businesses.
Specifically, the bill raises the limit on the aggregate amount for loans the SBA makes to an intermediary participating in the microloan program. Further, the bill (1) authorizes an intermediary to offer a line of credit to a small business, (2) increases the average amount for loans from an intermediary to participating small businesses that makes the intermediary eligible for a reduced interest rate on SBA loans, and (3) makes certain intermediaries eligible to receive a 5% technical assistance grant.
The bill also places limits on the repayment term for a microloan, and it prohibits the SBA from imposing any additional limitation on the term for repayment of a microloan.
The SBA must reserve 15% of new loan funds that are made available for disbursement as microloans to designated underutilized states and make the remaining 85% available for any state.
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