Small Business 7(a) Loan Agent Transparency Act

Bill 118 HR 1651, also known as the Small Business 7(a) Loan Agent Transparency Act, aims to increase transparency in the small business loan process by requiring loan agents to disclose their fees and relationships with lenders to borrowers. The bill specifically targets the Small Business Administration's 7(a) loan program, which provides loans to small businesses that may not qualify for traditional bank loans.

Under the proposed legislation, loan agents would be required to provide borrowers with a written disclosure of all fees associated with the loan, including any fees paid by the lender to the agent. This information would help small business owners make more informed decisions about their financing options and avoid potentially predatory lending practices.

Additionally, the bill would prohibit loan agents from receiving compensation from both the borrower and the lender for the same loan transaction. This provision is designed to prevent conflicts of interest and ensure that loan agents are acting in the best interests of the borrower. Overall, the Small Business 7(a) Loan Agent Transparency Act seeks to protect small business owners from deceptive lending practices and promote greater transparency in the small business loan market. By requiring loan agents to disclose their fees and relationships with lenders, the bill aims to empower small business owners to make more informed decisions about their financing options.