,,ii ,cal5d> ,no4 #aeh #aah? ,,congress 
#a/ ,session  ,s4 #bdhb  ,,9 ,,! ,,s5ate
 ,,( ,,! ,,unit$ ,,/ates  ,july #be1    
#bjbc,mr4 ,c>d91 f ! ,committee on      
,small ,bus9ess & ,entrepr5eur%ip1      
report$ ! foll[+ orig9al bill2 :i* 0    
read twice & plac$ on ! cal5d>  ,a      
,,bill  ,to am5d ! ,small ,bus9ess ,act 
to au?orize ! ,community ,advantage     
,loan ,program ( ! ,small ,bus9ess      
,adm9i/ration1 & = o!r purposes4  #a4   
,%ort title2 table ( cont5ts  7a7 ,%ort 
title ,?is ,act may be cit$ z !         
,community ,advantage ,loan ,program    
,act ( #bjbc4  7b7 ,table ( cont5ts ,!  
table ( cont5ts = ?is ,act is z foll[s3 
,sec4 #a4 ,%ort title2 table (          
cont5ts4,sec4 #b4 ,def9itions4,,title   
,i--,community ,advantage ,loan         
,program,sec4 #aja4 ,community          
,advantage ,loan ,program4,,title       
,,ii--,small ,bus9ess ,l5d+             
,companies,sec4 #bja4 ,%ort title4,sec4 
#bjb4 ,f9d+s4,sec4 #bjc4 ,l5d+          
crit]ia4,sec4 #bjd4 ,affiliation &      

fran*ise directory4,sec4 #bje4 ,loan    
au?orization4,sec4 #bjf4 ,ov]sight (    
small bus9ess l5d+ companies4,sec4 #bjg4
 ,(fice ( ,cr$it ,risk ,managem5t4,sec4 
#bjh4 ,d5i$ loan or loan modification   
reque/4,sec4 #bji4 ,direct l5d+4,sec4   
#baj4 ,re/riction on ref9anc+ debt4,sec4
 #baa4 ,,gao /udy4  #b4 ,def9itions ,9  
?is ,act3 7#a7 ,adm9i/ration ,! t]m     
,adm9i/ration means ! ,small ,bus9ess   
,adm9i/ration4  7#b7 ,adm9i/rator ,! t]m
 ,adm9i/rator means ! ,adm9i/rator ( !  
,adm9i/ration4  ,i ,community ,advantage
 ,loan ,program  #aja4 ,community       
,advantage ,loan ,program  7a7 ,9 g5]al 
,section #g7;a7 ( ! ,small ,bus9ess ,act
 7#ae ,u4,s4,c4 #fcf7;a77 is am5d$ by   
add+ at ! end ! foll[+3  7#ch7          
,community ,advantage ,loan ,program    
7,a7 ,purposes ,! purposes ( !          
,community ,advantage ,loan ,program    
are-- 7i7 to create a mission-ori5t$    
loan gu>antee program2  7ii7 to increase
 l5d+ to small bus9ess conc]ns 9        
und]s]v$ & rural m>kets1 includ+ to new 

bus9esses2  7iii7 to ensure t ! program 
"u ?is subsection exp&s inclusion & m   
broadly meets congressional int5t to    
rea* borr[]s :o are unable to get cr$it 
else:]e on reasonable t]ms & conditions2
  7iv7 to help und]s]v$ small bus9ess   
conc]ns become bankable by utiliz+ !    
small doll> f9anc+ & bus9ess support    
exp]i5ce ( mission-ori5t$ l5d]s2  7v7 to
 all[ c]ta9 mission-ori5t$ l5d]s1       
prim>ily f9ancial int]m$i>ies focus$ on 
economic developm5t 9 und]s]v$ m>kets1  
access to gu>antees = loans "u ?is      
subsection 7ref]r$ to 9 ?is p>agraph z  
#g7;a7 loans7 & provide managem5t &     
te*nical assi/ance to small bus9ess     
conc]ns z ne$$2 &  7vi7 to assi/ cov]$  
in/itutions ) provid+ bus9ess support   
s]vices & te*nical assi/ance to small   
bus9ess conc]ns1 :5 ne$$4  7,b7         
,def9itions ,9 ?is p>agraph3 7i7        
,community ,advantage ,network ,p>tn] ,!
 t]m ,community ,advantage ,network     
,p>tn]-- 7,i7 means a nonpr(it1         
mission-ori5t$ organization t acts z a  

,ref]ral ,ag5t to cov]$ in/itutions 9   
ord] to exp& ! rea* ( ! program to small
 bus9ess conc]ns 9 und]s]v$ m>kets2 &   
7,,ii7 does n include a cov]$ in/itution
 mak+ loans "u ! program4  7ii7 ,cov]$  
in/itution ,! t]m cov]$ in/itution means
 an entity t-- 7,i7 is-- 7aa7 a         
developm5t company1 z def9$ 9 section   
#ajc ( ! ,small ,bus9ess ,inve/m5t ,act 
( #aieh 7#ae ,u4,s4,c4 #ffb71 p>ticipat+
 9 ! #ejd ,loan ,gu>anty program        
e/abli%$ "u title ,v ( t ,act 7#ae      
,u4,s4,c4 #fie et seq472  7bb7 a        
nonpr(it int]m$i>y1 z def9$ 9 subsection
 7m77#aa71 p>ticipat+ 9 ! microloan     
program "u subsection 7m72  7cc7 a      
non-,f$]ally regulat$ entity c]tifi$ z a
 community developm5t f9ancial          
in/itution by ! ,community ,developm5t  
,f9ancial ,in/itutions ,fund e/abli%$ "u
 section #ajd7;a7 ( ! ,community        
,developm5t ,bank+ & ,f9ancial          
,in/itutions ,act ( #aiid 7#ab ,u4,s4,c4
 #dgjc7;a772 or  7dd7 an eligible       
int]m$i>y1 z def9$ 9 subsection 7l77#a71

 p>ticipat+ 9 ! small bus9ess int]m$i>y 
l5d+ program e/abli%$ "u subsection     
7l77#b72 &  7,,ii7 has approv$ &        
disburs$ #aj simil>ly siz$ loans 9 !    
prec$+ #bd-mon? p]iod & is s]vic+ n less
 ?an #aj simil>ly siz$ loans to small   
bus9ess conc]ns 9 ! portfolio ( !       
entity4  7iii7 ,exi/+ bus9ess ,! t]m    
exi/+ bus9ess means a small bus9ess     
conc]n t has be5 9 exi/5ce = n less ?an 
#b ye>s on ! date on :i* a loan is made 
to ! small bus9ess conc]n "u ! program4 
7iv7 ,new bus9ess ,! t]m new bus9ess    
means a small bus9ess conc]n t has be5 9
 exi/5ce = n m ?an #b ye>s on ! date on 
:i* a loan is made to ! small bus9ess   
conc]n "u ! program4  7v7 ,program ,!   
t]m program means ! ,community          
,advantage ,loan ,program e/abli%$ "u   
subp>agraph 7,c74  7vi7 ,ref]ral ,ag5t  
,! t]m ,ref]ral ,ag5t has ! mean+ giv5 !
 t]m 9 section #ajc4a7;f7 ( title #ac1  
,code ( ,f$]al ,regulations1 or any     
successor regulation4  7vii7 ,rural area
 ,! t]m rural area means any c\nty t !  

,bureau ( ! ,c5sus has def9$ z mo/ly    
rural or completely rural 9 ! mo/ rec5t 
dec5nial c5sus4  7viii7 ,small bus9ess  
conc]n 9 an und]s]v$ m>ket ,! t]m small 
bus9ess conc]n 9 an und]s]v$ m>ket means
 a small bus9ess conc]n-- 7,i7 t is     
locat$ 9-- 7aa7 a l[- to mod]ate-income 
community2  7bb7 a ,h,u,b,zone1 z t t]m 
is def9$ 9 section #ca7;b72  7cc7 a     
rural area2  7dd7 a community t has be5 
designat$ z an emp[]m5t zone or         
ent]prise community "u section #acia ( !
 ,int]nal ,rev5ue ,code ( #aihf2  7ee7 a
 community t has be5 designat$ z a      
qualifi$ opportunity zone "u section    
#adjj,z-#a ( ! ,int]nal ,rev5ue ,code ( 
#aihf2 or  7ff7 a community t has be5   
designat$ z a promise zone by !         
,secret>y ( ,h\s+ & ,urban ,developm5t2 
7,,ii7 = :i* m ?an #ej p]c5t ( !        
employees reside 9 a l[- or             
mod]ate-income community2  7,,iii7 t is 
a new bus9ess2 or  7,,iv7 t is own$ &   
controll$ by vet]ans or sp\ses (        
vet]ans4  7,c7 ,e/abli%m5t ,!re is      

e/abli%$ a ,community ,advantage ,loan  
,program "u :i* ! ,adm9i/ration may     
gu>antee loans clos$ by cov]$           
in/itutions "u ?is subsection1 ) an     
emphasis on loans made to small bus9ess 
conc]ns 9 und]s]v$ m>kets4  7,d7        
,program levels ,9 fiscal ye> #bjbd &   
ea* fiscal ye> !reaft]1 n m ?an #aj     
p]c5t ( ! numb] ( loans gu>ante$ "u ?is 
subsection may be gu>ante$ "u ! program4
  7,e7 ,gr&fa!r+ ( exi/+ l5d]s ,any     
cov]$ in/itution t 0 lic5s$ by !        
,adm9i/rator z a ,community ,advantage  
small bus9ess l5d+ company1 or t        
p>ticipat$ 9 ! ,community ,advantage    
,pilot ,program ( ! ,adm9i/ration1 dur+ 
! p]iod beg9n+ on ,may #a1 #bjbc1 & end+
 on ,septemb] #cj1 #bjbc1 & 0 9 good /&+
 dur+ t p]iod1 z det]m9$ by !           
,adm9i/ration-- 7i7 %all be designat$ z 
p>ticipants 9 ! program2  7ii7 %all n be
 requir$ to submit an application to    
p>ticipate 9 ! program2 &  7iii7 = !    
purpose ( det]m9+ ! loan loss res]ve    
am\nt ( ! cov]$ in/itution1 %all h      

p>ticipation 9 ! ,community ,advantage  
,pilot ,program includ$ 9 ! calculation 
"u subp>agraph 7,j74  7,f7 ,requirem5t  
to make loans to und]s]v$ m>kets ,n less
 ?an #fj p]c5t ( loans clos$ by a cov]$ 
in/itution "u ! program %all consi/ (   
loans made to small bus9ess conc]ns 9   
und]s]v$ m>kets4  7,g7 ,maximum loan    
am\nt2 collat]al  7i7 ,maximum loan     
am\nt  7,i7 ,9 g5]al ,except z provid$ 9
 subclause 7,,ii71 ! maximum loan am\nt 
= a loan gu>ante$ "u ! program is       
#cej1jjj4  7,,ii7 ,exp]i5c$ l5d]s  7aa7 
,9 g5]al ,! ,adm9i/rator may approve n m
 ?an #h cov]$ in/itutions 7ref]r$ to 9  
?is subclause z ! exp]i5c$ l5d]s71 ea* (
 :i* has n less ?an #e ye>s ( exp]i5ce  
mak+ loans "u ! ,community ,advantage   
,pilot ,program ( ! ,adm9i/ration or !  
program e/abli%$ "u ?is p>agraph1 to be 
eligible to make loans "u ?is subclause4
  7bb7 ,maximum loan am\nt ,subject to  
item 7dd71 an exp]i5c$ l5d] may make a  
loan gu>ante$ "u ! program 9 an am\nt t 
is n m ?an #gej1jjj4  7cc7 ,p>ticipation

 by ! ,adm9i/ration ,) respect to an    
agreem5t to p>ticipate 9 a loan made "u 
?is subclause on a def]r$ basis1 !      
p>ticipation by ! ,adm9i/ration %all    
be-- 7,,aa7 #ge p]c5t ( ! balance ( !   
f9anc+ out/&+ at ! "t ( ! disbursem5t ( 
! loan1 if t balance is m ?an #cej1jjj2 
7,,bb7 z describ$ 9 clause 7i7 (        
p>agraph 7#b77;,g71 if ! balance ( !    
f9anc+ out/&+ at ! "t ( ! disbursem5t ( 
! loan is z describ$ 9 t clause2 or     
7,,cc7 z describ$ 9 clause 7ii7 (       
p>agraph 7#b77;,g71 if ! balance ( !    
f9anc+ out/&+ at ! "t ( ! disbursem5t ( 
! loan is z describ$ 9 t clause4  7dd7  
,requirem5ts to make loans 9 c]ta9      
am\nts ,n less ?an #fj p]c5t ( loans    
clos$ by ea* exp]i5c$ l5d] "u ! program 
%all consi/ ( loans 9 an am\nt t is n m 
?an #cej1jjj4  7ii7 ,collat]al  7,i7 ,9 
g5]al ,a cov]$ in/itution %all n be     
requir$ to take collat]al ) respect to a
 loan gu>ante$ "u ! program if ! am\nt (
 t loan is n m ?an #ej1jjj4  7,,ii7     
,policies & proc$ures ( cov]$ in/itution

 ,9 det]m9+ ! am\nt ( collat]al requir$ 
) respect to a loan gu>ante$ "u !       
program1 a cov]$ in/itution may use !   
collat]al policies & proc$ures ( ! cov]$
 in/itution ) respect to simil>ly siz$  
comm]cial loans clos$ by ! cov]$        
in/itution t are n gu>ante$ by !        
,adm9i/ration4  7,h7 ,int]e/ rates ,!   
maximum all[able int]e/ rate prescrib$  
by ! ,adm9i/ration on any f9anc+ made on
 a def]r$ basis pursuant to ! program   
%all n exce$ ! maximum all[able int]e/  
rate "u sections #abj4bac & #abj4bad (  
title #ac1 ,code ( ,f$]al ,regulations1 
or any successor regulations4  7,i7     
,ref9anc+ ( ,community ,advantage       
program loans ,a loan gu>ante$ "u !     
program or gu>ante$ "u ! ,community     
,advantage ,pilot ,program ( !          
,adm9i/ration may be ref9anc$ into ano!r
 #g7;a7 loan made by a l5d] t does n    
p>ticipate 9 ! program4  7,j7 ,loan loss
 res]ve requirem5ts  7i7 ,loan loss     
res]ve acc\nt = cov]$ in/itutions ,a    
cov]$ in/itution-- 7,i7 ) n m ?an #e    

ye>s ( p>ticipation 9 ! program %all    
ma9ta9 a loan loss res]ve acc\nt ) an   
am\nt equal to #e p]c5t ( ! out/&+ am\nt
 ( ! ungu>ante$ portion ( ! loan        
portfolio ( ! cov]$ in/itution "u !     
program2 &  7,,ii7 ) m ?an #e ye>s (    
p>ticipation 9 ! program %all ma9ta9 a  
loan loss res]ve acc\nt ) an am\nt equal
 to ! av]age repur*ase rate ( ! cov]$   
in/itution ov] ! prec$+ #cf-mon? p]iod1 
except t su* am\nt %all n be less ?an #c
 p]c5t ( ! out/&+ am\nt ( ! ungu>ante$  
portion ( ! loan portfolio ( ! cov]$    
in/itution "u ! program4  7ii7          
,additional loan loss res]ve am\nt =    
sell+ loans on ! second>y m>ket ,9      
addition to ! am\nt requir$ 9 ! loan    
loss res]ve acc\nt "u clause 7i71 a     
cov]$ in/itution t sells a program loan 
on ! second>y m>ket %all be requir$ to  
ma9ta9 ! foll[+ additional am\nts 9 !   
loan loss res]ve acc\nt3 7,i7 ,= a cov]$
 in/itution ) less ?an #e ye>s (        
exp]i5ce sell+ program loans on !       
second>y m>ket1 an am\nt equal to #c    

p]c5t ( ! gu>ante$ portion ( ea* program
 loan sold on ! second>y m>ket4  7,,ii7 
,= a cov]$ in/itution ) m ?an #e ye>s ( 
exp]i5ce sell+ program loans on !       
second>y m>ket1 an am\nt equal to !     
av]age repur*ase rate = loans sold by ! 
cov]$ in/itution on ! second>y m>ket ov]
 ! prec$+ #cf mon?s1 except t su* am\nt 
%all be n less ?an #b p]c5t ( ! gu>ante$
 portion ( ea* program loan sold into ! 
second>y m>ket4  7iii7 ,recalculation   
,on ,octob] #a ( ea* ye>1 ! ,adm9i/rator
 %all recalculate ! loan loss res]ve    
requir$ "u clauses 7i7 & 7ii74  7,k7    
,tra9+ ,! ,adm9i/ration-- 7i7 %all      
provide accessible upfront & ongo+ tra9+
 = cov]$ in/itutions mak+ loans "u !    
program to support program compliance & 
improve ! int]face betwe5 ! cov]$       
in/itutions & ! ,adm9i/ration1 :i* %all 
include-- 7,i7 guidance = foll[+ !      
regulations ( ! ,adm9i/ration2 &  7,,ii7
 guidance specific to mission-ori5t$    
l5d+ t is int5d$ to help l5d]s          
effectively rea* & support small bus9ess

 conc]ns 9 und]s]v$ m>kets1 includ+     
managem5t & te*nical assi/ance deliv]y2 
7ii7 may ent] into a contract to provide
 ! tra9+ describ$ 9 clause 7i7 ) an     
organization-- 7,i7 ) exp]tise 9 l5d+ "u
 ?is subsection2 &  7,,ii7 prim>ily     
specializ+ 9-- 7aa7 mission-ori5t$ l5d+2
 &  7bb7 l5d+ to small bus9ess conc]ns 9
 und]s]v$ m>kets2 &  7iii7 %all provide 
tra9+ = ! employees & contractors ( !   
,adm9i/ration t regul>ly engage ) cov]$ 
in/itutions or borr[]s "u ! program4    
7,l7 ,community advantage outrea* &     
education ,! ,adm9i/rator-- 7i7 %all    
develop & implem5t a program to promote 
to1 conduct outrea* to1 & educate       
prospective cov]$ in/itutions ab\t !    
program2 &  7ii7 may ent] into a        
contract ) #a or m nonpr(it             
organizations exp]i5c$ 9 work+ ) & tra9+
 mission-ori5t$ l5d]s to provide !      
promotion1 outrea*1 & education describ$
 9 clause 7i74  7,m7 ,community         
advantage network p>tn] p>ticipation    
7i7 ,9 g5]al ,a cov]$ in/itution t uses 

a ,community ,advantage ,network ,p>tn] 
%all abide by policies & proc$ures ( !  
,adm9i/ration conc]n+ ! use ( ,ref]ral  
,ag5t fees p]mitt$ by ! ,adm9i/ration & 
disclosure ( ^? fees4  7ii7 ,paym5t (   
fees ,not)/&+ any o!r provision ( law1  
all fees describ$ 9 clause 7i7 %all be  
paid by ! cov]$ in/itution to !         
,community ,advantage ,network ,p>tn] ^u
 disbursem5t ( ! applicable program     
loan4  7,n7 ,delegat$ au?ority ,a cov]$ 
in/itution is n eligible to receive     
delegat$ au?ority f ! ,adm9i/ration "u !
 program until ! cov]$ in/itution has   
satisfi$ ! foll[+ applicable            
requirem5ts3 7i7 ,= a cov]$ in/itution  
actively p>ticipat+ 9 ! ,community      
,advantage ,pilot ,program ( !          
,adm9i/ration1 z ( ! day be=e ! date (  
enactm5t ( ?is p>agraph-- 7,i7 ! cov]$  
in/itution has approv$ & fully disburs$ 
n few] ?an #aj loans "u t ,pilot        
,program2 &  7,,ii7 ! ,adm9i/ration has 
evaluat$ ! ability ( ! cov]$ in/itution 
to fulfill program requirem5ts4  7ii7 ,=

 any cov]$ in/itution n describ$ 9      
clause 7i7-- 7,i7 ! cov]$ in/itution has
 approv$ & fully disburs$ n few] ?an #bj
 loans "u ! program2 &  7,,ii7 !        
,adm9i/ration has evaluat$ ! ability ( !
 cov]$ in/itution to fulfill program    
requirem5ts4  7,o7 ,report+  7i7 ,weekly
 reports  7,i7 ,9 g5]al ,! ,adm9i/ration
 %all report on ! website ( !           
,adm9i/ration1 z "p ( ! weekly reports  
on l5d+ approvals "u ?is subsection--   
7aa7 on & aft] ! date ( enactm5t ( ?is  
p>agraph1 ! numb] & doll> am\nt ( loans 
gu>ante$ "u ! ,community ,advantage     
,pilot ,program ( ! ,adm9i/ration2 &    
7bb7 on & aft] ! date on :i* !          
,adm9i/ration beg9s to approve loans "u 
! program1 ! numb] & doll> am\nt ( loans
 gu>ante$ "u ! program4  7,,ii7 ,sep>ate
 acc\nt+ ,! numb] & doll> am\nt ( loans 
report$ 9 a weekly report "u subclause  
7,i7 = loans gu>ante$ "u ! ,community   
,advantage ,pilot ,program ( !          
,adm9i/ration & "u ! program %all       
include a breakd[n by ! demographic     

in=mation ( ! own]s ( ! small bus9ess   
conc]ns1 by :e!r ! small bus9ess conc]n 
is a new bus9ess or an exi/+ bus9ess1 & 
by :e!r ! small bus9ess conc]n is locat$
 9 an urban or rural area1 & brok5 d[n  
by-- 7aa7 loans ( n m ?an #ej1jjj2  7bb7
 loans ( m ?an #ej1jjj & n m ?an        
#aej1jjj2  7cc7 loans ( m ?an #aej1jjj &
 n m ?an #bej1jjj2  7dd7 loans ( m ?an  
#bej1jjj & n m ?an #cej1jjj2 &  7ee7    
loans ( m ?an #cej1jjj & n m ?an        
#gej1jjj4  7ii7 ,annual reports  7,i7 ,9
 g5]al ,= ea* fiscal ye> 9 :i* ! program
 is 9 effect1 ! ,adm9i/ration %all      
submit to ! ,committee on ,small        
,bus9ess & ,entrepr5eur%ip ( ! ,s5ate & 
! ,committee on ,small ,bus9ess ( !     
,h\se ( ,repres5tatives1 & make publicly
 available on ! int]net1 in=mation ab\t 
loans provid$ "u ! program & "u !       
,community ,advantage ,pilot ,program ( 
! ,adm9i/ration4  7,,ii7 ,cont5ts ,ea*  
report submitt$ & made publicly         
available "u subclause 7,i7 %all        
include-- 7aa7 ! numb] & doll> am\nts ( 

loans provid$ to small bus9ess conc]ns  
"u ! program1 includ+ a breakd[n by--   
7,,aa7 ! demographic in=mation ( ! own]s
 ( ! small bus9ess conc]n2 7,,bb7 :e!r !
 small bus9ess conc]n is locat$ 9 an    
urban or rural area2 & 7,,cc7 :e!r !    
small bus9ess conc]n is an exi/+ bus9ess
 or a new bus9ess1 z provid$ 9 ! weekly 
reports on l5d+ approvals "u ?is        
subsection2  7bb7 ! proportion ( loans  
describ$ 9 item 7aa7 comp>$ to-- 7,,aa7 
o!r #g7;a7 loans ( any am\nt2 7,,bb7 o!r
 #g7;a7 loans ( simil> am\nts2 7,,cc7   
express loans provid$ "u p>agraph 7#ca7 
( simil> am\nts2 & 7,,dd7 o!r #g7;a7    
loans ( simil> am\nts provid$ to small  
bus9ess conc]ns 9 und]s]v$ m>kets2  7cc7
 ! numb] & doll> am\nts ( loans provid$ 
to small bus9ess conc]ns "u ea* category
 describ$ 9 subitems 7,,aa71 7,,bb71 &  
7,,cc7 ( item 7aa71 :i* %all be brok5   
d[n by-- 7,,aa7 loans ( n m ?an #ej1jjj2
 7,,bb7 loans ( m ?an #ej1jjj & n m ?an 
#aej1jjj2 7,,cc7 loans ( m ?an #aej1jjj 
& n m ?an #bej1jjj2 7,,dd7 loans ( m ?an

 #bej1jjj & n m ?an #cej1jjj2 & 7,,ee7  
loans ( m ?an #cej1jjj & n m ?an        
#gej1jjj2  7dd7 ! numb] & doll> am\nts (
 loans provid$ to small bus9ess conc]ns 
"u ! program by ,/ate1 & ! jobs creat$  
or reta9$ )9 ea* ,/ate2 &  7ee7 a li/ ( 
cov]$ in/itutions p>ticipat+ 9 ! program
 & ! ,community ,advantage ,pilot       
,program ( ! ,adm9i/ration1 includ+--   
7,,aa7 ! "n1 location1 & contact        
in=mation1 su* z ! website & telephone  
numb]1 ( ea* cov]$ in/itution2 & 7,,bb7 
a breakd[n by ! numb] & doll> am\nt ( ! 
loans approv$ = small bus9ess conc]ns4  
7,,iii7 ,tim+ ,an annual report requir$ 
"u ?is clause %all-- 7aa7 be submitt$ & 
made publicly available n lat] ?an      
,decemb] #a ( ea* ye>2 &  7bb7 cov] !   
l5d+ activity = ! fiscal ye> t end$ on  
,septemb] #cj ( t same ye>4  7,p7 ,,gao 
report ,n lat] ?an #e ye>s aft] ! date (
 enactm5t ( ?is p>agraph1 ! ,comptroll] 
,g5]al ( ! ,unit$ ,/ates %all submit to 
! ,adm9i/rator1 ! ,committee on ,small  
,bus9ess & ,entrepr5eur%ip ( ! ,s5ate1 &

 ! ,committee on ,small ,bus9ess ( !    
,h\se ( ,repres5tatives a report-- 7i7  
assess+-- 7,i7 ! ext5t to :i* ! program 
fulfills ! requirem5ts ( ?is p>agraph2 &
  7,,ii7 ! p]=mance ( cov]$ in/itutions 
p>ticipat+ 9 ! program2 &  7ii7 provid+ 
recomm5dations on ! adm9i/ration ( !    
program & ! f9d+s "u subclauses 7,i7 &  
7,,ii7 ( clause 7i74  7,q7 ,regulations 
7i7 ,9 g5]al ,n lat] ?an #ahj days aft] 
! date ( enactm5t ( ?is p>agraph1 !     
,adm9i/rator %all promulgate regulations
 gov]n+ ! program1 includ+ metrics =    
l5d] p]=mance1 metrics ( success &      
b5*m>ks ( ! program1 & crit]ia =        
appropriate managem5t & te*nical        
assi/ance4  7ii7 ,updates ,!            
,adm9i/rator %all consult ! report      
submitt$ "u subp>agraph 7,p7 &1 n lat]  
?an #ahj days aft] ! date on :i* !      
,comptroll] ,g5]al ( ! ,unit$ ,/ates    
submits ! report1 promulgate any        
necess>y *anges to exi/+ regulations ( !
 ,adm9i/ration bas$ on ! recomm5dations 
conta9$ 9 ! report4  4  7b7             

,p>ticipation ,section #g7;a77#b7 ( !   
,small ,bus9ess ,act 7#ae ,u4,s4,c4     
#fcf7;a77#b77 is am5d$-- 7#a7 9         
subp>agraph 7,a71 9 ! matt] prec$+      
clause 7i71 by /rik+ & 7,f7 & ins]t+    
7,f71 & 7,g72 &  7#b7 by add+ at ! end !
 foll[+3  7,g7 ,p>ticipation 9 !        
,community ,advantage ,loan ,program    
,subject to subp>agraph                 
7,g77i77,,ii77cc7 ( p>agraph 7#ch71 9 an
 agreem5t to p>ticipate 9 a loan on a   
def]r$ basis "u t p>agraph1 !           
p>ticipation by ! ,adm9i/ration %all    
be-- 7i7 #hj p]c5t ( ! balance ( !      
f9anc+ out/&+ at ! "t ( ! disbursem5t ( 
! loan1 if t balance is m ?an #aej1jjj &
 n m ?an #cej1jjj2 or  7ii7 #ij p]c5t ( 
! balance ( ! f9anc+ out/&+ at ! "t ( ! 
disbursem5t ( ! loan1 if t balance is n 
m ?an #aej1jjj4  4  ,,ii ,small ,bus9ess
 ,l5d+ ,companies  #bja4 ,%ort title    
,?is title may be cit$ z ! ,mod]niz+    
,,sba's ,bus9ess ,loan ,programs ,act ( 
#bjbc4  #bjb4 ,f9d+s ,congress f9ds t-- 
7#a7 9 #aihb1 ! ,adm9i/ration plac$ a   

moratorium on lic5s+ new small bus9ess  
l5d+ companies because ! ,adm9i/ration  
lack$ ! res\rces to effectively s]vice &
 sup]vise additional small bus9ess l5d+ 
companies2  7#b7 accord+ to ! ,(fice ( !
 ,inspector ,g5]al ( ! ,adm9i/ration1 ! 
r$uction 9 /aff 9 ! ,(fice ( ,cr$it     
,risk ,managem5t ( ! ,adm9i/ration f #db
 full-"t employees to #bi full-"t       
employees c\ld affect ! fiscal ye> #bjbc
 goals ( ! ,adm9i/ration = ov]sight     
reviews2  7#c7 ! ,adm9i/ration has      
f9aliz$ a rulemak+ to lift ! moratorium 
on ! lic5s+ new small bus9ess l5d+      
companies & e/abli% a new ,community    
,advantage small bus9ess l5d+ company   
lic5se1 & !re is no cap on ! numb] (    
small bus9ess l5d+ companies lic5ses t  
c\ld be issu$ by ! ,adm9i/ration2  7#d7 
! increas$ co/s & fees = an exi/+       
,community ,advantage l5d] 9 !          
,community ,advantage ,pilot ,program ( 
! ,adm9i/ration to obta9 & ma9ta9 a     
,community ,advantage small bus9ess l5d+
 company lic5se c\ld be co/ prohibitive 

= a majority ( curr5t ,community        
,advantage l5d]s to transition to a     
,community ,advantage small bus9ess l5d+
 company2  7#e7 on ,may #a1 #bjbc1 !    
,adm9i/ration ann\nc$ t ! ,community    
,advantage ,pilot ,program w\ld sunset  
on ,septemb] #cj1 #bjbc1 & ! au?ority ( 
a ,community ,advantage l5d] to make    
loans "u section #g7;a7 ( ! ,small      
,bus9ess ,act 7#ae ,u4,s4,c4 #fcf7;a77  
"u ! pilot program w t]m9ate2  7#f7 !   
,adm9i/ration does n h adequate res\rces
 to issue ei!r m ?an #c new small       
bus9ess l5d+ company lic5ses or new     
,community ,advantage small bus9ess l5d+
 company lic5ses1 z ! ,(fice ( ,cr$it   
,risk ,managem5t does n h ! capacity to 
assume additional ov]sight              
responsibilities2 &  7#g7 9 ord] to     
increase small doll> l5d+ 9 und]s]v$    
areas1 ! ,community ,advantage ,pilot   
,program %\ld be made p]man5t1 giv+     
l5d]s c]ta9ty to cont9ue to make loans  
"u section #g7;a7 ( ! ,small ,bus9ess   
,act 7#ae ,u4,s4,c4 #fcf7;a774  #bjc4   

,l5d+ crit]ia  7a7 #g7;a7 loans ,section
 #g7;a77#a7 ( ! ,small ,bus9ess ,act    
7#ae ,u4,s4,c4 #fcf7;a77#a77 is am5d$ by
 add+ at ! end ! foll[+3  7,d7          
,und]writ+ requirem5ts  7i7 ,9 g5]al ,) 
respect to a loan gu>ante$ "u ?is       
subsection-- 7,i7 ! applicant 7includ+  
an op]at+ company7 %all be cr$itwor?y2  
7,,ii7 ! loan mu/ be s s\nd z to        
reasonably assure repaym5t2 &  7,,iii7  
subject to ! approval ( ! ,adm9i/rator1 
! ,director ( ! ,(fice ( ,cr$it ,risk   
,managem5t may require additional       
crit]ia4  7ii7 ,l5d+ crit]ia = loans (  
#cej1jjj or m ,) respect to a loan      
gu>ante$ "u ?is section t is n less ?an 
#cej1jjj1 ! ,adm9i/ration & l5d]s %all1 
z applicable1 consid] ! foll[+3 7,i7    
,cr$it hi/ory ( ! applicant 7& ! op]at+ 
company1 if applicable71 & ! associates 
& gu>antors ( ! applicant4  7,,ii7      
,exp]i5ce & dep? ( managem5t4  7,,iii7  
,/r5g? ( ! bus9ess4  7,,iv7 ,pa/ e>n+s1 
project$ ca% fl[1 & future prospects4   
7,v7 ,ability to repay ! loan ) e>n+s f 

! bus9ess ( ! applicant4  7,,vi7        
,suffici5t inve/$ equity to op]ate on a 
s\nd f9ancial basis4  7,,vii7 ,pot5tial 
= long-t]m success4  7,,viii7 ,nature & 
value ( collat]al 7al?\gh inadequate    
collat]al may n be ! sole reason = d5ial
 ( a loan application74  7,,ix7 ,!      
effect any affiliate ( ! applicant may h
 on ! ultimate repaym5t ability ( !     
applicant4  7iii7 ,l5d+ crit]ia = loans 
( less ?an #cej1jjj ,) respect to a loan
 gu>ante$ "u ?is section t is less ?an  
#cej1jjj-- 7,i7 l5d]s %all use          
appropriate & g5]ally acceptable        
comm]cial cr$it analysis processes &    
proc$ures consi/5t ) ^? us$ =           
simil>ly-siz$ comm]cial loans t are n   
gu>ante$ by ! ,adm9i/ration2  7,,ii7 !  
,adm9i/ration & l5d]s may use a bus9ess 
cr$it scor+ model2 &  7,,iii7 !         
,adm9i/ration & l5d]s %all1 z           
applicable1 consid]-- 7aa7 ! cr$it score
 or cr$it hi/ory ( ! applicant 7& !     
op]at+ company1 if applicable71 & !     
associates & gu>antors ( ! applicant2   

7bb7 ! e>n+s or ca% fl[ ( ! applicant2  
7cc7 any equity or collat]al ( !        
applicant2 &  7dd7 ! effect any         
affiliates ( ! applicant may h on !     
ultimate repaym5t ability ( ! applicant4
  4  7b7 #ejd_/;,,cdc loans ,section    
#ejb ( ! ,small ,bus9ess ,inve/m5t ,act 
( #aieh 7#ae ,u4,s4,c4 #fif7 is am5d$ by
 add+ at ! end ! foll[+3  7#h7          
,und]writ+ requirem5ts  7,a7 ,9 g5]al ,)
 respect to a loan made "u ?is section--
 7i7 ! applicant 7includ+ an op]at+     
company7 %all be cr$itwor?y2 &  7ii7 !  
loan mu/ be s s\nd z to reasonably      
assure repaym5t4  7,b7 ,l5d+ crit]ia ,) 
respect to a loan made "u ?is section-- 
7i7 l5d]s & c]tifi$ developm5t companies
 %all use appropriate & g5]ally         
acceptable comm]cial cr$it analysis     
processes & proc$ures consi/5t ) ^? us$ 
= simil>ly-siz$ comm]cial loans t are n 
gu>ante$ by ! ,adm9i/ration2  7ii7 !    
,adm9i/ration1 l5d]s1 & c]tifi$         
developm5t companies may use a bus9ess  
cr$it scor+ model2 &  7iii7 !           

,adm9i/ration1 l5d]s1 & c]tifi$         
developm5t companies %all1 z applicable1
 consid]-- 7,i7 ! cr$it score or cr$it  
hi/ory ( ! applicant 7& ! op]at+        
company1 if applicable71 & ! associates 
& gu>antors ( ! applicant2  7,,ii7 !    
e>n+s or ca% fl[ ( ! applicant2 &       
7,,iii7 any equity or collat]al ( !     
applicant4  4  #bjd4 ,affiliation &     
fran*ise directory  7a7 ,affiliation    
pr9ciples  7#a7 ,bus9ess loans ,section 
#g7;a77#a7 ( ! ,small ,bus9ess ,act 7#ae
 ,u4,s4,c4 #fcf7;a77#a771 z am5d$ by    
section #bjc7;a7 ( ?is ,act1 is am5d$ by
 add+ at ! end ! foll[+3  7,e7          
,affiliation pr9ciples ,affiliation "u  
any ( ! circum/ances describ$ bel[ is   
suffici5t to e/abli% affiliation =      
applicants = a loan gu>ante$ "u ?is     
subsection3 7i7 ,affiliation bas$ on    
own]%ip  7,i7 ,9 g5]al ,= det]m9+       
affiliation bas$ on equity own]%ip1 a   
conc]n is an affiliate ( an individual1 
conc]n1 or entity t owns or has ! p[] to
 control m ?an #ej p]c5t ( ! vot+ equity

 ( ! conc]n4  7,,ii7 ,o!r (fic]s ,if no 
individual1 conc]n1 or entity is f\nd to
 control a conc]n "u subclause 7,i71 !  
,adm9i/rator %all deem ! bo>d (         
directors1 presid5t1 or *ief executive  
(fic] 7or o!r (fic]s1 manag+ memb]s1 or 
p>tn]s :o control ! managem5t ( !       
conc]n7 to be 9 control ( ! conc]n4     
7,,iii7 ,m9ority %>ehold] ,!            
,adm9i/rator %all deem a m9ority        
%>ehold] ( a conc]n to be 9 control ( ! 
conc]n if t individual or entity has !  
ability1 "u ! *>t]1 by-laws1 or %>ehold]
 agreem5t ( ! conc]n1 to prev5t a quorum
 or o!rwise block action by ! bo>d (    
directors or %>ehold]s ( ! conc]n4  7ii7
 ,affiliation aris+ "u /ock options1    
conv]tible securities1 & agreem5ts to   
m]ge  7,i7 ,9 g5]al ,9 det]m9+ ! size ( 
a conc]n1 ! ,adm9i/rator %all-- 7aa7    
consid] /ock options1 conv]tible        
securities1 & agreem5ts to m]ge 7includ+
 agreem5ts 9 pr9ciple7 to h a pres5t    
effect on ! p[] to control a conc]n2 &  
7bb7 treat options1 conv]tible          

securities1 & agreem5ts describ$ 9 item 
7aa7 z ?\gh ! rights grant$ h be5       
ex]cis$4  7,,ii7 ,agreem5ts to op5 or   
cont9ue negotiations ,an agreem5t to op5
 or cont9ue negotiations t[>ds !        
possibility ( a m]g] or a sale ( /ock at
 "s lat] date is n consid]$ an agreem5t 
9 pr9ciple & is n giv5 pres5t effect4   
7,,iii7 ,conditions prec$5t ,/ock       
options1 conv]tible securities1 &       
agreem5ts t are subject to conditions   
prec$5t t are incapable ( fulfillm5t1   
speculative1 conjectural1 or un5=ceable 
"u ,/ate or ,f$]al law1 or :]e !        
probability ( ! transaction 7or ex]cise 
( ! rights7 occurr+ is %[n to be        
extremely remote1 are n giv5 pres5t     
effect4  7,,iv7 ,t]m9ation ( control    
7aa7 ,9 g5]al ,an individual1 conc]n1 or
 o!r entity t controls #a or m o!r      
conc]ns _c use /ock options1 conv]tible 
securities1 or agreem5ts to appe> to    
t]m9ate su* control be=e actually do+ s4
  7bb7 ,dive/+ ,! ,adm9i/rator %all n   
give pres5t effect to ! ability ( an    

individual1 conc]n1 or o!r entity to    
dive/ all or "p ( _! own]%ip int]e/ 9 a 
conc]n 9 ord] to avoid a f9d+ (         
affiliation4  7iii7 ,affiliation bas$ on
 managem5t ,affiliation arises :]e--    
7,i7 ! *ief executive (fic] or presid5t 
( ! applicant conc]n 7or o!r (fic]s1    
manag+ memb]s1 or p>tn]s :o control !   
managem5t ( ! conc]n7 also controls !   
managem5t ( #a or m o!r conc]ns2  7,,ii7
 a s+le individual1 conc]n1 or entity t 
controls ! bo>d ( directors or managem5t
 ( #a conc]n also controls ! bo>d (     
directors or managem5t ( #a ( m o!r     
conc]ns2 or  7,,iii7 a s+le individual1 
conc]n1 or entity controls ! managem5t (
 ! applicant conc]n ?r\gh a managem5t   
agreem5t4  7iv7 ,affiliation bas$ on    
id5tity ( int]e/  7,i7 ,def9ition ,9 ?is
 clause1 ! t]m close relative means--   
7aa7 a sp\se1 p>5t1 *ild1 or sibl+2 &   
7bb7 ! sp\se ( any individual describ$ 9
 item 7aa74  7,,ii7 ,close relatives    
,affiliation arises :5 !re is an id5tity
 ( int]e/ betwe5 close relatives )      

id5tical or sub/antially id5tical       
bus9ess or economic int]e/s1 su* z :]e !
 close relatives op]ate conc]ns 9 ! same
 or simil> indu/ry 9 ! same geographic  
area4  7,,iii7 ,aggregat$ int]e/s ,if ! 
,adm9i/rator det]m9es t int]e/s describ$
 9 subclause 7,,ii7 %\ld be aggregat$1  
an individual or firm may rebut t       
det]m9ation ) evid5ce %[+ t ! int]e/s   
deem$ to be affiliat$ are 9 fact        
sep>ate4  7v7 ,affiliation bas$ on      
fran*ise & lic5se agreem5ts  7,i7 ,9    
g5]al ,! re/ra9ts impos$ on a fran*isee 
or lic5see by its fran*ise or lic5se    
agreem5t g5]ally %all n be consid]$ 9   
det]m9+ :e!r ! fran*isor or lic5sor is  
affiliat$ ) an applicant fran*isee or   
lic5see1 if ! applicant fran*isee or    
lic5see has ! "r to pr(it f its ef=ts & 
be>s ! risk ( loss comm5surate )        
own]%ip4  7,,ii7 ,nature ( agreem5t ,=  
purposes ( subclause 7,i71 !            
,adm9i/rator %all only consid] !        
fran*ise or lic5se agreem5ts ( !        
applicant conc]n4  7vi7 ,det]m9+ !      

conc]n's size ,9 det]m9+ ! size ( a     
conc]n1 ! ,adm9i/rator c\nts ! receipts1
 employees1 or ! alt]nate size /&>d 7if 
applicable7 ( ! conc]n ^: size is at    
issue & all ( ! dome/ic & =eign         
affiliates ( ! conc]n1 reg>dless ( :e!r 
! affiliates are organiz$ = pr(it4      
7vii7 ,exceptions to affiliation ,!     
exceptions to affiliation describ$ 9    
section #aba4ajc7;b7 ( title #ac1 ,code 
( ,f$]al ,regulations1 or any successor 
regulation1 %all apply4  4  7#b7        
#ejd_/;,,cdc loans ,section #ejb ( !    
,small ,bus9ess ,inve/m5t ,act ( #aieh  
7#ae ,u4,s4,c4 #fif71 z am5d$ by section
 #bjc7;b7 ( ?is ,act1 is am5d$ by add+  
at ! end ! foll[+3  7#i7 ,affiliation   
pr9ciples ,affiliation "u any ( !       
circum/ances describ$ bel[ is suffici5t 
to e/abli% affiliation = applicants = a 
loan "u ?is section3 7,a7 ,affiliation  
bas$ on own]%ip  7i7 ,own]%ip ( ano!r   
bus9ess ,:5 ! applicant owns m ?an #ej  
p]c5t ( ano!r bus9ess1 ! applicant & !  
o!r bus9ess are affiliat$4  7ii7        

,own]%ip by o!r bus9esses  7,i7 ,9 g5]al
 ,:5 a bus9ess owns m ?an #ej p]c5t ( an
 applicant1 ! bus9ess t owns ! applicant
 is affiliat$ ) ! applicant4  7,,ii7    
,o!r bus9ess own$ by own] ( applicant   
,if a bus9ess entity own] t owns m ?an  
#ej p]c5t ( an applicant also owns m ?an
 #ej p]c5t ( ano!r bus9ess t op]ates 9 !
 same #c-;digit ,nor? ,am]ican ,indu/ry 
,classification ,sy/em subsector z !    
applicant1 !n ! bus9ess entity own]1 !  
o!r bus9ess1 & ! applicant are all      
affiliat$4  7iii7 ,own]%ip by           
individuals ,:5 an individual owns m ?an
 #ej p]c5t ( ! applicant & ! individual 
also owns m ?an #ej p]c5t ( ano!r       
bus9ess entity t op]ates 9 ! same       
#c-;digit ,nor? ,am]ican ,indu/ry       
,classification ,sy/em subsector z !    
applicant1 ! applicant & ! individual   
own]'s o!r bus9ess entity are affiliat$4
  7iv7 ,less ?an #ej p]c5t ,:5 an       
applicant does n h an own] t owns m ?an 
#ej p]c5t ( ! applicant1 if an own] (   
#bj p]c5t or m ( ! applicant also owns m

 ?an #ej p]c5t ( ano!r bus9ess entity t 
op]ates 9 ! same #c-;digit ,nor?        
,am]ican ,indu/ry ,classification ,sy/em
 subsector z ! applicant1 ! applicant & 
! own]'s o!r bus9ess entity are         
affiliat$4  7v7 ,sp\se & m9or *ildr5    
,own]%ip int]e/s ( sp\ses & m9or *ildr5 
%all be comb9$ :5 det]m9+ am\nt (       
own]%ip int]e/4  7vi7 ,p]c5tage (       
own]%ip ,:5 det]m9+ ! p]c5tage ( own]%ip
 t an individual owns 9 a bus9ess1 !    
,adm9i/rator %all consid] ! pro rata    
own]%ip ( entities4  7,b7 ,affiliation  
aris+ "u /ock options1 conv]tible       
securities1 & agreem5ts to m]ge  7i7 ,9 
g5]al ,! ,adm9i/rator %all-- 7,i7       
consid] /ock options1 conv]tible        
securities1 & agreem5ts to m]ge 7includ+
 agreem5ts 9 pr9ciple7 to h a pres5t    
effect on ! own]%ip ( an entity2 &      
7,,ii7 treat options1 conv]tible        
securities1 & agreem5ts describ$ 9      
subclause 7,i7 z ?\gh ! rights grant$ h 
be5 ex]cis$4  7ii7 ,agreem5ts to op5 or 
cont9ue negotiations ,an agreem5t to op5

 or cont9ue negotiations t[>ds !        
possibility ( a m]g] or a sale ( /ock at
 "s lat] date is n consid]$ an agreem5t 
9 pr9ciple & is n giv5 pres5t effect4   
7iii7 ,conditions prec$5t ,/ock options1
 conv]tible securities1 & agreem5ts t   
are subject to conditions prec$5t t are 
incapable ( fulfillm5t1 speculative1    
conjectural1 or un5=ceable "u ,/ate or  
,f$]al law1 or :]e ! probability ( !    
transaction 7or ex]cise ( ! rights7     
occurr+ is %[n to be extremely remote1  
are n giv5 pres5t effect4  7iv7 ,ability
 to dive/ ,! ,adm9i/rator %all n give   
pres5t effect to individuals'1 conc]ns'1
 or o!r entities' ability to dive/ all  
or "p ( _! own]%ip int]e/ to avoid a    
f9d+ ( affiliation4  7,c7 ,det]m9+ !    
conc]n's size ,9 det]m9+ ! size ( a     
conc]n1 ! ,adm9i/rator c\nts ! receipts1
 employees1 or ! alt]nate size /&>d 7if 
applicable7 ( ! conc]n ^: size is at    
issue & all ( ! dome/ic & =eign         
affiliates ( ! conc]n1 reg>dless ( :e!r 
! affiliates are organiz$ = pr(it4  7,d7

 ,exceptions to affiliation ,!          
exceptions to affiliation describ$ 9    
section #aba4ajc7;b7 ( title #ac1 ,code 
( ,f$]al ,regulations1 or any successor 
regulation1 %all apply4  4  7b7         
,fran*ise directory ,n lat] ?an #cj days
 aft] ! date ( enactm5t ( ?is ,act1 !   
,adm9i/ration %all publi% & ma9ta9 on ! 
website ( ! ,adm9i/ration a ,fran*ise   
,directory1 :i* %all conta9 a li/ t     
l5d]s & c]tifi$ developm5t companies may
 use 9 evaluat+ :e!r a fran*ise is      
eligible = f9anc+ f ! ,adm9i/ration4    
#bje4 ,loan au?orization  7a7 #g7;a7    
loans ,section #g7;a77#a7 ( ! ,small    
,bus9ess ,act 7#ae ,u4,s4,c4            
#fcf7;a77#a771 z am5d$ by section       
#bjd7;a7 ( ?is ,act1 is am5d$ by add+ at
 ! end ! foll[+3  7,f7 ,loan            
au?orization  7i7 ,9 g5]al ,) respect to
 a loan made or gu>ante$ "u ?is         
subsection1 ! ,adm9i/ration %all issue a
 writt5 agreem5t provid+ ! t]ms &       
conditions "u :i* ! ,adm9i/ration w make
 or gu>antee ! loan4  7ii7 ,n a contract

 ,a writt5 agreem5t issu$ "u clause 7i7 
is n a contract to make a loan4  4  7b7 
#ejd_/;,,cdc loans ,section #ejb ( !    
,small ,bus9ess ,inve/m5t ,act ( #aieh  
7#ae ,u4,s4,c4 #fif71 z am5d$ by section
 #bjd7;b7 ( ?is ,act1 is am5d$ by add+  
at ! end ! foll[+3  7#aj7 ,loan         
au?orization  7,a7 ,9 g5]al ,) respect  
to a loan made "u ?is section1 !        
,adm9i/ration %all issue a writt5       
agreem5t provid+ ! t]ms & conditions "u 
:i* ! ,adm9i/ration w make ! loan4  7,b7
 ,n a contract ,a writt5 agreem5t issu$ 
"u subp>agraph 7,a7 is n a contract to  
make a loan4  4  #bjf4 ,ov]sight ( small
 bus9ess l5d+ companies  7a7 ,def9ition 
,section #c7r7 ( ! ,small ,bus9ess ,act 
7#ae ,u4,s4,c4 #fcb7r77 is am5d$1 9 !   
matt] prec$+ p>agraph 7#a71 by /rik+ ,z 
us$ 9 section #bc ( ?is ,act & ins]t+ ,9
 ?is ,act4  7b7 ,capital requirem5ts2   
maximum numb] ,section #g7;a77#a7 ( !   
,small ,bus9ess ,act 7#ae ,u4,s4,c4     
#fcf7;a77#a771 z am5d$ by section       
#bje7;a7 ( ?is ,act1 is am5d$ by add+ at

 ! end ! foll[+3  7,g7 ,additional      
provisions relat+ to small bus9ess l5d+ 
companies  7i7 ,maximum numb]  7,i7 ,9  
g5]al ,n m ?an #ag small bus9ess l5d+   
companies may be au?oriz$ to make loans 
"u ?is subsection at any "t4  7,,ii7    
,exi/+ small bus9ess l5d+ companies     
7aa7 ,9 g5]al ,except z provid$ 9       
subclause 7,,iii71 ea* ( ! #ad small    
bus9ess l5d+ companies au?oriz$ to make 
loans "u ?is subsection z ( ,june #a1   
#bjbc %all reta9 su* au?orization on &  
aft] ! date ( enactm5t ( ?is            
subp>agraph4  7bb7 ,loss ( au?orization 
,) respect to a l5d] t1 z ( ! date (    
enactm5t ( ?is subp>agraph1 is au?oriz$ 
z a ,community ,advantage small bus9ess 
l5d+ company1 t l5d] %all1 beg9n+ on t  
date ( enactm5t-- 7,,aa7 no long] h t   
au?orization2 & 7,,bb7 be designat$ z a 
l5d] "u ! ,community ,advantage ,loan   
,program e/abli%$ "u p>agraph 7#ch74    
7,,iii7 ,transf] or sale ,! ,adm9i/rator
 %all h ! discretion to au?orize !      
transf] or sale ( a lic5se ( a small    

bus9ess l5d+ company to make loans "u   
?is subsection to ano!r small bus9ess   
l5d+ company4  7,,iv7 ,limitation (     
delegat$ au?ority  7aa7 ,9 g5]al        
,not)/&+ p>agraph 7#ca71 any small      
bus9ess l5d+ company t ! ,adm9i/ration  
au?orizes aft] ,june #a1 #bjbc to make  
loans "u ?is subsection %all be         
ineligible = delegat$ au?ority f !      
,adm9i/ration to process1 close1 s]vice1
 & liquidate c]ta9 loans made "u ?is    
subsection = ! #e-ye> p]iod beg9n+ on ! 
date on :i* ! ,adm9i/ration au?orizes ! 
small bus9ess l5d+ company to make loans
 "u ?is subsection4  7bb7 ,exi/+        
,s,b,l,cs ,item 7aa7 %all n apply )     
respect to ea* ( ! #ad small bus9ess    
l5d+ companies au?oriz$ to make loans "u
 ?is subsection z ( ,june #a1 #bjbc4    
7ii7 ,m9imum capital requirem5ts  7,i7  
,9 g5]al ,except z provid$ 9 subclauses 
7,,ii7 & 7,,iii71 to be au?oriz$ to make
 loans "u ?is subsection1 a small       
bus9ess l5d+ company %all comply ) !    
m9imum capital requirem5ts 9 effect on  

,janu>y #c1 #bjba4  7,,ii7 ,approv$ on  
or aft] ,janu>y #d1 #bjba ,any small    
bus9ess l5d+ company au?oriz$ by !      
,adm9i/ration to make loans "u ?is      
subsection on or aft] ,janu>y #d1 #bjba1
 includ+ 9 ! ev5t ( a *ange ( own]%ip or
 control1 %all ma9ta91 at a m9imum1 !   
great] (-- 7aa7 un5cumb]$ paid-9 capital
 & paid-9 surplus ( n less ?an          
#e1jjj1jjj2 or  7bb7 an am\nt equal to  
#aj p]c5t ( ! aggregate ( its %>e ( all 
out/&+ loans4  7,,iii7 ,requirem5ts on &
 aft] ,janu>y #d1 #bjbd ,on & aft]      
,janu>y #d1 #bjbd1 ea* small bus9ess    
l5d+ company t makes or acquires a loan 
"u ?is subsection %all ma9ta91 at a     
m9imum1 ! great] (-- 7aa7 un5cumb]$     
paid-9 capital & paid-9 surplus ( n less
 ?an #e1jjj1jjj2 or  7bb7 an am\nt equal
 to #aj p]c5t ( ! aggregate ( its %>e ( 
all out/&+ loans4  7iii7 ,crit]ia =     
lic5s+ small bus9ess l5d+ companies ,!  
,adm9i/rator %all use uni=m t]ms = !    
lic5s+ ( bus9ess conc]ns z small bus9ess
 l5d+ companies & ! p>ticipation ( ^?   

companies 9 ! programs "u ?is           
subsection4  4  7c7 ,annual /ress te/+ &
 reviews ,section #bc7;d7 ( ! ,small    
,bus9ess ,act 7#ae ,u4,s4,c4 #fej7;d77  
is am5d$-- 7#a7 9 p>agraph 7#a71 by     
ins]t+ ,9 g5]al4-- aft] 7#a72  7#b7 9   
p>agraph 7#b71 by ins]t+ ,he>+4-- aft]  
7#b72  7#c7 by r$esignat+ p>agraphs 7#c7
 & 7#d7 z p>agraphs 7#d7 & 7#e71        
respectively2  7#d7 by ins]t+ aft]      
p>agraph 7#b7 ! foll[+3  7#c7 ,special  
sup]visory au?orities relat$ to small   
bus9ess l5d+ companies  7,a7 ,review &  
revocation ( au?ority  7i7 ,9 g5]al ,!  
,director ( ! ,(fice ( ,cr$it ,risk     
,managem5t 79 ?is p>agraph ref]r$ to z !
 ,director7-- 7,i7 may review & revoke !
 au?ority ( a small bus9ess l5d+ company
 to make1 s]vice1 or liquidate bus9ess  
loans "u section #g7;a7 = p]=mance1     
excessive losses1 or pr$atory l5d+2     
7,,ii7 %all review & may revoke !       
au?ority ( a small bus9ess l5d+ company 
to make1 s]vice1 or liquidate bus9ess   
loans "u section #g7;a7 if-- 7aa7 ! e>ly

 default rate = ! small bus9ess l5d+    
company exce$s ! av]age default rate =  
all small bus9ess l5d+ companies        
p>ticipat+ 9 ! loan program "u section  
#g7;a72  7bb7 ! small bus9ess l5d+      
company fails to comply ) ! requirem5ts 
"u subp>agraph 7,b72 or  7cc7 !         
,director f9ds 9 an audit conduct$ "u   
subp>agraph 7,c77ii7 t ! small bus9ess  
l5d+ company is n 9 compliance ) #a or m
 ( ! requirem5ts describ$ 9 subp>agraph 
7,c72 &  7,,iii7 %all revoke ! au?ority 
( a small bus9ess l5d+ company to make1 
s]vice1 or liquidate bus9ess loans "u   
section #g7;a7 if ! ,director has       
det]m9$ ! small bus9ess l5d+ company has
 fail$ to comply ) ! requirem5ts 9      
subclause 7,,ii7 or 7,,iii7 (           
subp>agraph 7,b77ii7 = #b or m ye>s 9 a 
r[4  7ii7 ,report+ requirem5t ,if !     
,director revokes ! au?ority ( a small  
bus9ess l5d+ company to make1 s]vice1 or
 liquidate bus9ess loans "u section     
#g7;a71 ! ,director %all report !       
revocation1 along ) details & in=mation 

describ+ :y t decision 0 made1 to !     
,(fice ( ! ,inspector ,g5]al ( !        
,adm9i/ration4  7,b7 ,annual /ress te/s 
7i7 ,9 g5]al ,ea* small bus9ess l5d+    
company %all-- 7,i7 conduct an annual   
/ress te/ ( ! portfolio ( ! small       
bus9ess l5d+ company "u section #g7;a7 9
 accordance ) ! requirem5ts "u clause   
7ii72 &  7,,ii7 report to ! ,director ! 
f9d+s ( ea* annual /ress te/ conduct$ "u
 subclause 7,i74  7ii7 ,requirem5ts ,ea*
 /ress te/ conduct$ "u clause 7i7 %all  
comply ) ! foll[+ requirem5ts3 7,i7 ,!  
small bus9ess l5d+ company %all use     
f9ancial data z ( ,decemb] #ca ( !      
cal5d> ye> prior to ! report+ ye>4      
7,,ii7 ,! small bus9ess l5d+ company    
%all use ! sc5>ios provid$ by !         
,director1 :i* %all reflect a m9imum (  
#b sets ( economic & f9ancial           
conditions1 includ+ basel9e & sev]ely   
adv]se sc5>ios t incorporate            
consid]ation ( int]e/ rate risk4 ,!     
,director %all provide a description ( !
 sc5>ios requir$ to be us$ by ea* small 

bus9ess l5d+ company n lat] ?an ,febru>y
 #ae ( ! report+ ye>4  7,,iii7 ,! bo>d (
 directors & s5ior managem5t ( ea* small
 bus9ess l5d+ company %all consid] !    
results ( ! /ress te/s conduct$ "u ?is  
subsection 9 ! normal c\rse ( bus9ess1  
includ+ capital plann+1 assessm5t (     
capital adequacy1 & risk managem5t      
practices ( ! small bus9ess l5d+        
company4  7,c7 ,compliance ) ,bank      
,secrecy ,act & anti-money laund]+      
requirem5ts  7i7 ,def9ition ,9 ?is      
subp>agraph1 ! t]m ,bank ,secrecy ,act  
means-- 7,i7 section #ba ( ! ,f$]al     
,deposit ,insurance ,act 7#ab ,u4,s4,c4 
#ahbi;b72  7,,ii7 *apt] #b ( title ,i ( 
,public ,law #ia-ejh 7#ab ,u4,s4,c4     
#aiea et seq472 &  7,,iii7 sub*apt] ,,ii
 ( *apt] #ec ( title #ca1 ,unit$ ,/ates 
,code4  7ii7 ,annual reviews ,!         
,director-- 7,i7 %all conduct annual    
reviews to ensure t small bus9ess l5d+  
companies are 9 compliance ) !          
requirem5ts conta9$ 9 ! regulations     
issu$ "u clause 7iii72 &  7,,ii7 9      

conduct+ a review "u subclause 7,i71 may
 n rely on self-c]tification by a small 
bus9ess l5d+ company t ! small bus9ess  
l5d+ company is 9 compliance ) ^?       
requirem5ts4  7iii7 ,regulations ,n lat]
 ?an #a ye> aft] ! date ( enactm5t ( !  
,mod]niz+ ,,sba's ,bus9ess ,loan        
,programs ,act ( #bjbc1 ! ,adm9i/rator  
%all1 9 consultation ) o!r appropriate  
,f$]al ag5cies1 issue regulations to    
provide a framework to ensure t small   
bus9ess l5d+ companies are 9 compliance 
) ! requirem5ts "u ! ,bank ,secrecy     
,act1 includ+ ,"k ,y\r ,cu/om] &        
anti-money laund]+ requirem5ts1 & any   
applicable consum] protection laws1     
includ+ ! ,tru? 9 ,l5d+ ,act 7#ae       
,u4,s4,c4 #afja et seq471 ! ,equal      
,cr$it ,opportunity ,act 7#ae ,u4,s4,c4 
#afia et seq471 & ! ,gramm-,lea*-,bliley
 ,act 7,public ,law #ajf-ajb2 #aac ,/at4
 #acch74  2  7#e7 9 p>agraph 7#d71 z s  
r$esignat$1 by ins]t+ ,notification4--  
aft] 7#d72 &  7#f7 9 p>agraph 7#e71 z s 
r$esignat$1 by ins]t+ ,delegation4--    

aft] 7#e74  #bjg4 ,(fice ( ,cr$it ,risk 
,managem5t ,section #dg ( ! ,small      
,bus9ess ,act 7#ae ,u4,s4,c4 #fegt7 is  
am5d$-- 7#a7 9 subsection 7c7-- 7,a7 9  
p>agraph 7#a71 by ins]t+ be=e ! p]iod at
 ! end ! foll[+3 ) a demon/rat$ c>e] 9  
or out/&+ qualifications or exp]tise    
relat$ to f9ance & f9ancial risk        
managem5t4 ,! ,director %all report     
directly to ! ,adm9i/rator2 &  7,b7 by  
add+ at ! end ! foll[+3  7#c7           
,comp5sation ,! ,adm9i/rator %all fix ! 
comp5sation ( ! ,director-- 7,a7 z      
necess>y to c>ry out ! duties ( !       
,(fice2 &  7,b7 9 an am\nt t is n less  
?an ! highe/ rate ( basic pay = ! ,s5ior
 ,executive ,s]vice "u section #echb7;b7
 ( title #e1 ,unit$ ,/ates ,code4  2 &  
7#b7 9 subsection 7h77#b7-- 7,a7 9      
subp>agraph 7,i71 by /rik+ & at ! end2  
7,b7 9 subp>agraph 7,j71 by /rik+ !     
p]iod at ! end & ins]t+ a semicolon2 &  
7,c7 by add+ at ! end ! foll[+3  7,k7 ! 
numb] ( #g7;a7 l5d]s t _h an e>ly       
default rate ( m ?an #c p]c5t2 &  7,l7  

an analysis ( ! m$ian & av]age cr$it    
scores ( borr[]s relat+ to e>ly default 
rates1 pur*ase rates1 & *>ge (fs4  4    
#bjh4 ,d5i$ loan or loan modification   
reque/  7a7 #g7;a7 loans ,section       
#g7;a77#a7 ( ! ,small ,bus9ess ,act 7#ae
 ,u4,s4,c4 #fcf7;a77#a771 z am5d$ by    
section #bjf7;b7 ( ?is ,act1 is am5d$ by
 add+ at ! end ! foll[+3  7,h7 ,d5i$    
loan or loan modification reque/  7i7   
,role ( ,adm9i/rator ,! ,adm9i/rator may
 n int]v5e or make a f9al decision )    
respect to a reque/ = reconsid]ation ( a
 d5i$ loan or loan modification reque/  
made by an applicant or recipi5t ( a    
loan "u ?is subsection4  7ii7 ,f9al     
decision ,only ! ,director ( ! ,(fice ( 
,f9ancial ,assi/ance may make a f9al    
decision ) respect to a reque/ =        
reconsid]ation ( a d5i$ loan or loan    
modification reque/ made by an applicant
 or recipi5t ( a loan "u ?is subsection4
  4  7b7 #ejd_/;,,cdc loans ,section    
#ejb ( ! ,small ,bus9ess ,inve/m5t ,act 
( #aieh 7#ae ,u4,s4,c4 #fif71 z am5d$ by

 section #bje7;b7 ( ?is ,act1 is am5d$  
by add+ at ! end ! foll[+3  7#aa7 ,d5i$ 
loan or loan modification reque/  7,a7  
,role ( ,adm9i/rator ,! ,adm9i/rator may
 n int]v5e or make a f9al decision )    
respect to a reque/ = reconsid]ation ( a
 d5i$ loan or loan modification reque/  
made by an applicant or recipi5t ( a    
loan "u ?is section4  7,b7 ,f9al        
decision ,only ! ,director ( ! ,(fice ( 
,f9ancial ,assi/ance may make a f9al    
decision ) respect to a reque/ =        
reconsid]ation ( a d5i$ loan or loan    
modification reque/ made by an applicant
 or recipi5t ( a loan "u ?is section4  4
  #bji4 ,direct l5d+ ,section #g7;a77#a7
 ( ! ,small ,bus9ess ,act 7#ae ,u4,s4,c4
 #fcf7;a77#a771 z am5d$ by section      
#bjh7;a7 ( ?is ,act1 is am5d$ by add+ at
 ! end ! foll[+3  7,i7 ,notification    
requir$ be=e direct l5d+ ,n lat] ?an #fj
 days be=e ! ,adm9i/ration implem5ts any
 policy or pilot program t w\ld all[ !  
,adm9i/ration to directly make a loan "u
 ?is subsection1 ! ,adm9i/rator %all    

submit a notification to ,congress =    
review4  4  #baj4 ,re/riction on        
ref9anc+ debt ,section #g7;a77#a7 ( !   
,small ,bus9ess ,act 7#ae ,u4,s4,c4     
#fcf7;a77#a771 z am5d$ by section #bji (
 ?is ,act1 is am5d$ by add+ at ! end !  
foll[+3  7,j7 ,re/riction on ref9anc+   
debt  7i7 ,def9ition ,9 ?is subp>agraph1
 ! t]m delegat$ au?ority means /atus    
grant$ by ! ,adm9i/ration to a l5d] to  
all[ ! l5d] to process1 close1 s]vice1 &
 liquidate c]ta9 loans made "u ?is      
subsection )\t prior review by !        
,adm9i/ration4  7ii7 ,re/riction ,a l5d]
 %all be prohibit$ f us+ any delegat$   
au?ority "u ?is subsection to ref9ance  
any debt held by ! l5d]1 includ+ any    
loan made "u ?is subsection4  4  #baa4  
,,gao /udy ,n lat] ?an #b ye>s aft] !   
date ( enactm5t ( ?is ,act1 !           
,comptroll] ,g5]al ( ! ,unit$ ,/ates    
%all conduct a /udy & submit to !       
,adm9i/rator1 ! ,committee on ,small    
,bus9ess & ,entrepr5eur%ip ( ! ,s5ate1 &
 ! ,committee on ,small ,bus9ess ( !    

,h\se ( ,repres5tatives a report t      
includes-- 7#a7 an analysis ( ! use (   
alt]native cr$it models = loans made "u 
section #g7;a7 ( ! ,small ,bus9ess ,act 
7#ae ,u4,s4,c4 #fcf7;a77 9 an am\nt (   
less ?an #cej1jjj1 includ+-- 7,a7 an    
analysis ( :e!r appropriate gu>drails   
are 9 place to prev5t fraud1 wa/e1 &    
abuse & provide protections = ! borr[]2 
7,b7 an evaluation ( ! effectiv5ess ( ^?
 cr$it models 9 r$uc+ b>ri]s to access  
to capital to und]s]v$ & rural          
communities2 &  7,c7 recomm5dations z to
 :e!r improvem5ts c be made by          
,adm9i/ration 9 its use ( alt]native    
cr$it models to prev5t wa/e1 fraud1 &   
abuse & to improve access to capital to 
und]s]v$ & rural communities2  7#b7 an  
audit ( ! op]ations1 /aff+1 & res\rces (
 ! ,(fice ( ,cr$it ,risk ,managem5t ( ! 
,adm9i/ration1 includ+ ! ef=ts ( !      
,(fice to implem5t ! new ov]sight       
provisions "u ! am5dm5ts made by ?is    
title2 &  7#c7 a survey ( ! practices ( 
l5d]s "u section #g7;a7 ( ! ,small      

,bus9ess ,act 7#ae ,u4,s4,c4 #fcf7;a77  
relat+ to ! use ( crim9al hi/ory :5     
det]m9+ :e!r to approve a loan "u t     
section or a simil>ly siz$ comm]cial    
loan t is n gu>ante$ by ! ,adm9i/ration4
  ,july #be1 #bjbc,read twice & plac$ on
 ! cal5d>