Limits on disaster loans

(a) Low funding Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended— (1) by redesignating the second paragraph designated as paragraph (16), relating to statute of limitations, as added by the COVID–19 EIDL Fraud Statute of Limitations Act of 2022 (Public Law 117–165; 136 Stat. 1363), as paragraph (18); and (2) by inserting after paragraph (16), relating to disaster declarations in rural areas, as added by the Disaster Assistance for Rural Communities Act (Public Law 117–249; 136 Stat. 2350), the following: (17) Requirements when funding is low (A) In general Not later than 24 hours after the unobligated balance of amounts available for the cost of direct loans authorized by this subsection is less than 10 percent of the most recent appropriation for such costs, the Administrator shall notify the Committee on Appropriations and the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Appropriations and the Committee on Small Business of the House of Representatives. (B) Limitation on obligating funds During the period beginning on the first business day occurring on or after the date by which the Administrator is required to notify Congress under subparagraph (A) and ending on the date on which additional amounts are appropriated for such costs, the Administrator may not obligate funds for a direct loan authorized under this subsection in an amount that is more than the amount of such a loan for which collateral is required.. (b) Repeal of authority To increase amount of loans for which collateral is not required Section 7(d)(6) of the Small Business Act is amended by striking (or such higher amount as the Administrator determines appropriate in the event of a major disaster).