Pilot program

Section 7 of the Small Business Act (15 U.S.C. 636) is amended by adding at the end the following: (o) Pilot program (1) Definitions In this subsection: (A) Eligible intermediary The term eligible intermediary means— (i) a private, nonprofit entity, including a private, nonprofit community development corporation, a consortium of private, nonprofit organizations or nonprofit community development corporations, and an agency of or nonprofit entity established by a Native American Tribal Government, that— (I) seeks or has been awarded a loan from the Administrator to make loans to small business concerns under this subsection; and (II) has not less than 1 year of experience making loans to startup or socially and economically disadvantaged small business concerns; (ii) a community development financial institution, as defined in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702); and (iii) a minority depository institution, as defined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note). (B) Individual adversely impacted by the War on Drugs The term individual adversely impacted by the War on Drugs has the meaning given the term in section 301(b) of the Cannabis Administration and Opportunity Act. (C) Program The term Program means the small business intermediary lending pilot program established under paragraph (2). (D) Socially and economically disadvantaged small business concern The term socially and economically disadvantaged small business concern has the meaning given the term in section 8(a)(4)(A). (2) Establishment There is established a 10-year small business intermediary lending pilot program under which the Administrator may— (A) make direct loans to eligible intermediaries for the purpose of making loans to startup small business concerns, small business concerns owned and controlled by individuals adversely impacted by the War on Drugs, or socially and economically disadvantaged small business concerns; and (B) in conjunction with the direct loans described in subparagraph (A), make grants to eligible intermediaries for the purpose of providing intensive marketing, management, regulatory compliance, and technical assistance to the small business concerns described in subparagraph (A) that receive a loan under this subsection. (3) Loans to eligible intermediaries (A) Application Each eligible intermediary desiring a loan under this subsection shall submit an application to the Administrator that describes— (i) the type of small business concerns to be assisted; (ii) the size and range of loans to be made; (iii) the interest rate and terms of loans to be made; (iv) the geographic area to be served and the economic, poverty, and unemployment characteristics of the area; (v) the status of small business concerns in the area to be served and an analysis of the availability of credit; (vi) the marketing, management, regulatory compliance, and other technical assistance to be provided in connection with a loan made under this subsection; and (vii) the qualifications of the applicant to carry out this subsection. (B) Loan limits No loan may be made to an eligible intermediary under this subsection if the total amount outstanding and committed to the eligible intermediary by the Administrator would, as a result of such loan, exceed $10,000,000 during the participation of the eligible intermediary in the Program. (C) Loan duration Loans made by the Administrator under this subsection shall be for a term of 20 years. (D) Applicable interest rate Loans made by the Administrator to an eligible intermediary under the Program shall bear an annual interest rate equal to the interest rate described in subsection (m)(3)(F)(ii). (E) Fees; collateral The Administrator may not charge any fees or require collateral with respect to any loan made to an eligible intermediary under this subsection. (F) Delayed payments The Administrator shall not require the repayment of principal or interest on a loan made to an eligible intermediary under the Program during the 2-year period beginning on the date of the initial disbursement of funds under that loan. (G) Maximum participants and amounts During each fiscal year, the Administrator may make loans under the Program— (i) to not more than 30 eligible intermediaries; and (ii) in a total amount of not more than $300,000,000. (4) Loans to small business concerns (A) In general The Administrator, through an eligible intermediary, shall make loans to the small business concerns described in paragraph (2) for eligible uses under subsection (a). (B) Maximum loan An eligible intermediary may not make a loan under this subsection of more than $200,000 to any 1 small business concern. (C) Applicable interest rates (i) In general Subject to clause (ii), a loan made by an eligible intermediary to a small business concern under this subsection— (I) may have a fixed or a variable interest rate; and (II) shall bear an interest rate specified by the eligible intermediary in the application of the eligible intermediary for a loan under this subsection. (ii) Restrictions The Administrator may limit the interest rate or provide forbearance or deferment on repayment of a loan made by an eligible intermediary to a small business concern under this section. (D) Review restrictions The Administrator may not review individual loans made by an eligible intermediary to a small business concern before approval of the loan by the eligible intermediary. (5) Funding In addition to amounts otherwise available, there is appropriated, out of any funds in the Treasury not otherwise appropriated, for fiscal year 2026, to remain available until September 30, 2030— (A) $90,000,000 to carry out paragraph (2)(A); and (B) $41,000,000 to carry out paragraph (2)(B). (6) Termination The authority of the Administrator to make loans under the Program shall terminate on the date that is 10 years after the date of enactment of this subsection. (7) Sense of the Senate It is the sense of the Senate that the Administrator should issue regulations to ensure that the processing and disbursement of loans under this subsection prioritizes individuals adversely impacted by the War on Drugs..