119-s2662

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2662 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2662

To amend the Small Business Investment Act of 1958 to improve the loan 
guaranty program, enhance the ability of small manufacturers to access 
 affordable capital, and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 August 1, 2025

 Ms. Klobuchar (for herself and Mr. Young) introduced the following 
 bill; which was read twice and referred to the Committee on Small 
 Business and Entrepreneurship

_______________________________________________________________________

 A BILL

To amend the Small Business Investment Act of 1958 to improve the loan 
guaranty program, enhance the ability of small manufacturers to access 
 affordable capital, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``504 Modernization and Small 
Manufacturer Enhancement Act of 2025''.

SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOPMENT COMPANY PROGRAM.

 

Section 501
            (d) (3) of the Small Business Investment Act of 1958 (15 
U.S.C. 695
            (d) (3) ) is amended--

    (1) by redesignating subparagraphs
        (A) through
            (L) as 
 subparagraphs
        (B) through
            (M) , respectively;

    (2) by inserting before subparagraph
        (B) , as so 
 redesignated, the following:
 ``
        (A) workforce development through work-based or 
 work-integrated training, which shall be satisfied by 
 demonstrating that a small business concern that is a 
 subject of the project has--
 ``
            (i) a documented in-house training 
 program, the duration of which is not shorter 
 than 12 weeks; or
 ``
            (ii) entered into a contract with an 
 entity--
 ``
            (I) to provide trained applicants 
 for any open position of employment at 
 the small business concern; and
 ``
            (II) that ensures that any 
 applicant provided to the small 
 business concern under subclause
            (I) has undergone not fewer than 12 weeks 
 of training that is relevant to the 
 open position described in that 
 subclause,'';

    (3) by amending subparagraph
            (D) , as so redesignated, to 
 read as follows:
 ``
            (D) expansion of minority-owned, employee-owned, 
 or women-owned business development,'';

    (4) in subparagraph
            (L) , as so redesignated, by striking 
 ``producers, or'' and inserting ``producers,'';

    (5) in subparagraph
            (M) , as so redesignated, by striking 
 the period at the end and inserting a comma;

    (6) by inserting after subparagraph
            (M) , as so 
 redesignated, the following:
 ``
        (N) enhanced ability for small business concerns 
 to reduce costs by using energy efficient products and 
 generating renewable energy,
 ``
        (O) aid revitalizing of any area for which a 
 disaster has been declared or determined under 
 subparagraph
        (A) ,
        (B) ,
            (C) , or
        (E) of 

section 7

    (b)

    (2) of the Small Business Act (15 U.S.C. 636

    (b)

    (2) ), or
 ``
        (P) expansion of small business concerns with 10 
 or fewer employees.''; and

    (7) in the flush text following subparagraph
        (P) , as added 
 by paragraph

    (6) , by striking ``subparagraphs
        (J) and
        (K) '' and 
 inserting ``subparagraphs
        (K) and
            (L) ''.

SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFACTURING LOANS.

 

Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 
696) is amended--

    (1) in the matter preceding paragraph

    (1) , by striking 
 ``The Administration'' and inserting the following:
 ``

    (a) In General.--The Administration''; and

    (2) in subsection

    (a) , as so designated--
        (A) in paragraph

    (2)
        (A) --
            (i) in the matter preceding clause
            (i) , by 
 striking ``section'' and inserting 
 ``subsection''; and
            (ii) in clause
            (iii) , by striking 
 ``$5,500,000'' and inserting ``$10,000,000''; 
 and
        (B) in paragraph

    (3)
        (A) , by striking ``this 
 section'' and inserting ``this subsection''.

SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCEDURE.

 Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
et seq.) is amended--

    (1) in 

section 502 (15 U.S.C. 696), as amended by this Act, 
 by adding at the end the following:
 ``

    (b) Closing.--An accredited lender certified company may take any 
of the following actions to facilitate the closing of a loan made under 
subsection

    (a) :
 ``

    (1) Reallocate the cost of the project with respect to 
 which the loan is made in an amount that is not more than 10 
 percent of the overall cost of the project.
 ``

    (2) Correct any name that is applicable to the loan, 
 including the name of any borrower, guarantor, eligible passive 
 company described in paragraph

    (3)
        (A) , and operating company 
 described in paragraph

    (3)
        (B) .
 ``

    (3) Add any of the following to receive proceeds of the 
 loan:
 ``
        (A) An eligible passive company that complies 
 with 

section 120.111 of title 13, Code of Federal 
 Regulations, or any successor regulation.
 ``
        (B) If an eligible passive company is added under 
 subparagraph
        (A) , an operating company with respect to 
 that eligible passive company.
 ``

    (4) Correct the address of any property with respect to 
 which the loan is made.
 ``

    (5) Correct the name of any interim lender or third-party 
 lender.
 ``

    (6) Change any third-party lender or interim lender if 
 that lender is a financial institution that is regulated by the 
 Federal Government or a State government.
 ``

    (7) Make a guarantor a co-borrower or a co-borrower a 
 guarantor.
 ``

    (8) Add a guarantor that does not change ownership with 
 respect to the loan.
 ``

    (9) Reduce the amount of standby debt before the closing 
 as a result of regularly scheduled payments.
 ``

    (10) Reduce the cost of the project with respect to which 
 the loan is made.
 ``
            (c) Accredited Lender Certified Company Defined.--In this 
section, the term `accredited lender certified company' means a 
certified development company that meets the requirements under 

section 507

    (b) , including a certified development company that the 
Administration has designated as an accredited lender under such 

section 507

    (b) .''; and

    (2) by adding at the end the following:

``

SEC. 511. CLOSING AND OVERSIGHT.

 ``

    (a) SBA District Counsels.--Beginning on the date that is 180 
days after the date of enactment of this section, with respect to the 
program established under this title, district counsels of the 
Administration shall be subject to the same requirements, and shall 
have the same authority and responsibilities, as in effect with respect 
to that program on the day before the date of enactment of this 
section, except that--
 ``

    (1) the Office of Credit Risk Management of the 
 Administration shall have the responsibility for all duties 
 relating to conducting file reviews of loans made under this 
 title; and
 ``

    (2) district counsels of the Administration shall not 
 have any responsibility relating to the review of closing 
 packages with respect to a loan made under this title.
 ``

    (b) Designated Attorneys.--For the purposes of this title, the 
following provisions and requirements shall apply with respect to a 
designated attorney of a certified development company:
 ``

    (1) A designated attorney that meets the requirements 
 determined under paragraph

    (2) shall be responsible for 
 certifying documents relating to the closing of a loan 
 described in this title.
 ``

    (2) The Administrator may determine any continuing 
 education requirements that the designated attorney shall be 
 required to satisfy in order to be permitted to close a loan 
 made under this title.
 ``

    (3) If, as of the date of enactment of this section, a 
 certified development company does not have a designated 
 attorney, during the 180-day period beginning on that date of 
 enactment, the certified development company may identify such 
 an attorney, subject to the approval of the Administrator.''.

SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR SMALL MANUFACTURERS.

    (a) Contribution Requirement.--

Section 502

    (a)

    (3)
            (C) of the Small 
Business Investment Act of 1958 (15 U.S.C. 696

    (a)

    (3)
            (C) ), as so 
designated by this Act, is amended--

    (1) by redesignating clauses
            (i) ,
            (ii) ,
            (iii) , and
            (iv) as 
 subclauses
            (I) ,
            (II) ,
            (III) , and
            (IV) , respectively, and 
 adjusting the margins of such subclauses accordingly;

    (2) by inserting before subclause
            (I) , as so redesignated, 
 the following:
 ``
            (i) for a small business concern that is 
 not a small manufacturer (as defined in 

section 501

    (e)

    (7) )--'';

    (3) in subclause
            (III) , as so redesignated, by striking 
 ``clauses
            (i) and
            (ii) '' and inserting ``subclauses
            (I) and
            (II) '';

    (4) in subclause
            (IV) as so redesignated, by striking the 
 period at the end and inserting ``; or''; and

    (5) by adding at the end the following:
 ``
            (ii) for a small manufacturer (as defined 
 in 

section 501

    (e)

    (7) )--
 ``
            (I) at least 5 percent of the 
 total cost of the project financed, if 
 the small business concern has been in 
 operation for a period of 2 years or 
 less;
 ``
            (II) at least 5 percent of the 
 total cost of the project financed, if 
 the project involves a limited or 
 single purpose building or structure;
 ``
            (III) at least 10 percent of the 
 total cost of the project financed if 
 the project involves both of the 
 conditions set forth in subclauses
            (I) and
            (II) ; or
 ``
            (IV) at least 5 percent of the 
 total cost of the project financed, in 
 all other circumstances, at the 
 discretion of the development 
 company.''.

    (b) Collateral Requirements.--

Section 502

    (a)

    (3)
        (E)
            (i) of the Small 
Business Investment Act of 1958 (15 U.S.C. 696

    (a)

    (3)
        (E)
            (i) ), as so 
designated by this Act, is amended by adding at the end the following: 
``Additional collateral shall not be required in the case of a small 
manufacturer (as defined in 

section 501

    (e)

    (7) ).''.
            (c) Debt Refinancing.--

Section 502

    (a)

    (7)
        (B) of the Small Business 
Investment Act of 1958 (15 U.S.C. 696

    (a)

    (7)
        (B) ), as so designated by 
this Act, is amended--

    (1) in the matter preceding clause
            (i) , by inserting ``(or 
 in the case of a small manufacturer (as defined in 

section 501

    (e)

    (7) ), that does not exceed 100 percent of the project 
 cost of the expansion)'' after ``cost of the expansion'';

    (2) in clause
            (v) , by adding ``and'' at the end;

    (3) by striking clause
            (vi) ; and

    (4) by redesignating clause
            (vii) as clause
            (vi) .
            (d) Amount of Guaranteed Debenture.--

Section 503

    (a) of the Small 
Business Investment Act of 1958 (15 U.S.C. 697

    (a) ) is amended by adding 
at the end the following:
 ``

    (5) Any debenture issued by a State or local development company 
to a small manufacturer (as defined in 

section 501

    (e)

    (7) ) with respect 
to which a guarantee is made under this subsection shall be in an 
amount equal to not more than 50 percent of the cost of the project 
with respect to which such debenture is issued, without regard to 
whether good cause has been shown.''.

SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS.

 Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
et seq.), as amended by this Act, is amended by adding at the end the 
following:

``

SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS.

 ``

    (a) In General.--The Administrator shall ensure that each 
district office of the Administration partners with not less than 1 
resource partner to provide training to small business concerns 
assigned a North American Industry Classification System code for 
manufacturing on obtaining assistance under the program carried out 
under this title, including with respect to the application process 
under that program and partnering with development companies under this 
title.
 ``

    (b) Resource Partner Defined.--In this section, the term 
`resource partner' means--
 ``

    (1) a small business development center, as defined in 
 

section 3 of the Small Business Act (15 U.S.C. 632);
 ``

    (2) a women's business center described in 

section 29 of 
 such Act (15 U.S.C. 656);
 ``

    (3) a chapter of the Service Corps of Retired Executives 
 established under 

section 8

    (b)

    (1)
        (B) of such Act (15 U.S.C. 
 637

    (b)

    (1)
        (B) ); and
 ``

    (4) a Veteran Business Outreach Center described in 
 

section 32 of such Act (15 U.S.C. 657b).''.

SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXISTING BUILDINGS.

    (a) In General.--

Section 502

    (a) of the Small Business Investment 
Act of 1958 (15 U.S.C. 696

    (a) ), as so designated by this Act, is 
amended by striking paragraphs

    (4) and

    (5) and inserting the following:
 ``

    (4) New facilities.--
 ``
        (A) In general.--With respect to a project to 
 construct a new facility, an assisted small business 
 concern may permanently lease not more than 20 percent 
 of the project to commercial or residential tenants if 
 such concern--
 ``
            (i) permanently occupies and uses not 
 less than 60 percent of the project;
 ``
            (ii) plans to occupy and use an 
 additional portion of the project that is not 
 permanently leased not later than 3 years after 
 receipt of assistance under this section; and
 ``
            (iii) plans to permanently occupy and use 
 80 percent of the project not later than 10 
 years after receipt of such assistance.
 ``
        (B) Small manufacturers.--With respect to an 
 assisted small business concern that is a small 
 manufacturer (as defined in 

section 501

    (e)

    (7) ), 
 subparagraph
        (A)
            (i) shall apply with `50 percent' 
 substituted for `60 percent'.
 ``

    (5) Existing buildings.--With respect to a project to 
 acquire, renovate, or reconstruct an existing building, the 
 following shall apply:
 ``
        (A) Occupancy requirements.--The assisted small 
 business concern may permanently lease not more than 50 
 percent of the project if the concern permanently 
 occupies and uses not less than 50 percent of the 
 project.
 ``
        (B) Exception.--The assisted small business 
 concern may permanently lease more than 50 percent of 
 the project to commercial or residential tenants if--
 ``
            (i) such concern--
 ``
            (I) has occupied and used the 
 existing building for a consecutive 12-
 month period before submitting an 
 application for assistance under this 
 section;
 ``
            (II) agrees to permanently use 
 less than 50 percent of the existing 
 building and permanently lease more 
 than 50 percent for a consecutive 12-
 month period after receiving such 
 assistance; and
 ``
            (III) affirms that the existing 
 building is appropriate for current and 
 reasonably anticipated needs; and
 ``
            (ii) the development company assisting 
 such project--
 ``
            (I) provides written notice to 
 the Administrator on the date on which 
 the development company closes the loan 
 for such project; and
 ``
            (II) once each year during the 
 first 5 years of the loan, and once 
 every 2 years for the remainder of the 
 loan--
 ``

    (aa) conducts an 
 examination of the assisted 
 small business concern to 
 ensure the concern is not a 
 real estate development 
 business; and
 ``

    (bb) files with the 
 Administrator an anti-investor 
 certification signed by the 
 development company and the 
 assisted small business 
 concern.
 ``
            (C) Lease term.--Any residential lease made under 
 this paragraph shall be for a term of not more than 1 
 year, and any commercial lease made under this 
 paragraph shall be for a term of not more than 5 
 years.''.

    (b) Report.--Not later than 5 years after the date of enactment of 
this Act, the Administrator of the Small Business Administration shall 
submit to Congress a report analyzing the impact of the amendments made 
by this section on access to capital for small business concerns (as 
defined in 

section 3 of the Small Business Act (15 U.S.C. 632)), and 
recommending whether similar notice, examination, and certifications 
requirements should be made to the program established under 

section 7

    (a) of the Small Business Act (15 U.S.C. 636

    (a) ).
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