Small Business Disaster Damage Fairness Act of 2024
Impact
If enacted, HB 9611 would significantly alter the collateral requirements for disaster loans under the Small Business Act. By increasing the loan amount that requires collateral, the bill seeks to address the financial needs of small businesses during times of crisis. This adjustment could empower more businesses to recover after natural disasters or other emergencies, thereby enhancing the overall economic landscape. Additionally, a report would be mandated to assess the performance of these loans and the influence of the new requirements on default rates within three years of the bill's enactment.
Summary
House Bill 9611, known as the Small Business Disaster Damage Fairness Act of 2024, aims to increase the minimum disaster loan amount that requires collateral from the Small Business Administration (SBA). Specifically, the bill proposes raising the collateral requirement from $14,000 to $50,000 and expanding the definition of qualifying disasters to include any disasters, not just major ones. This change is anticipated to provide small businesses access to larger loans when facing financial challenges due to disasters, ultimately promoting economic resilience and stability.
Contention
The proposed increase in collateral requirements may raise concerns among certain stakeholders. Critics might argue that while the bill aims to assist small businesses, the higher collateral threshold could deter some entrepreneurs from applying for loans they desperately need during crises. Furthermore, there may be discussions regarding the potential administrative burden on the SBA to manage these increased requirements and the implications for loan performance monitoring. Balancing the need for collateral with the necessity of accessible financing for small businesses will likely be a point of contention as the bill moves through the legislative process.
To amend section 7(b) of the Small Business Act to make disaster loans available for damages caused by prolonged power outages, and for other purposes.