S. 4534: Microbusiness Support Act

The Microbusiness Support Act aims to amend the Small Business Act by establishing a direct loan program specifically for microbusinesses, which are defined as independently owned and operated for-profit businesses with no more than 10 full-time employees and annual revenues capped at either $5 million or the applicable small business size standard for their industry.

Loan Program Overview

• Loan Amounts: Microbusinesses can receive loans up to a maximum of $100,000.
• Loan Terms: The bill requires the Small Business Administration (SBA) to issue guidelines within 90 days of enactment. These guidelines will cover repayment terms, underwriting criteria, interest rates, and other conditions for the loans.
• Interest Rates: The interest rate for these loans is proposed to be set at 6 percent per annum.
• Loan Fees: The SBA or authorized third parties can impose various fees to cover costs associated with loan processing, underwriting, and servicing. This may include charges for unused fees or draw fees for revolving lines of credit.

Eligibility Verification

The bill grants the SBA the authority to request documentation from businesses to verify their status as microbusinesses under the defined criteria.

Partnerships

The SBA can partner with third parties to facilitate the origination, disbursement, and servicing of loans under this program.

Purpose

The intent of this bill is to provide support for smaller businesses that may be at a disadvantage in accessing capital through traditional lending channels. By directly providing loans to microbusinesses, the Microbusiness Support Act aims to promote entrepreneurship and increase the economic contribution of small businesses across the country.

Relevant Companies

• None found