A bill to amend the Small Business Act to increase the minimum disaster loan amount for which the Small Business Administration may require collateral, and for other purposes.

2/5/2025, 11:56 AM

Summary of Bill S 397

Bill 119 s 397, also known as the Small Business Disaster Loan Collateral Act, aims to amend the Small Business Act to raise the minimum amount of disaster loans for which the Small Business Administration (SBA) can demand collateral. Currently, the SBA can require collateral for disaster loans of $25,000 or more. This bill seeks to increase that minimum amount, although the specific new threshold is not specified in the bill text.

The purpose of this amendment is to provide greater flexibility for small businesses seeking disaster assistance from the SBA. By allowing the SBA to require collateral for larger loans, the agency can better protect taxpayer funds and ensure that loans are repaid in a timely manner. This change could potentially make it easier for small businesses to access the financial assistance they need to recover from disasters such as hurricanes, wildfires, or other emergencies.

Overall, Bill 119 s 397 aims to strengthen the SBA's ability to support small businesses in times of crisis while also safeguarding taxpayer dollars. It is important to note that this bill does not specify the exact new minimum loan amount for which collateral may be required, leaving room for interpretation and potential adjustments in the future.

Congressional Summary of S 397

Small Business Disaster Damage Fairness Act of 2025

This bill increases from $14,000 to $50,000 the threshold loan amount over which the Small Business Administration (SBA) may require collateral for a disaster loan.

The Government Accountability Office must report on the performance, including the default rate, of such loans.

Additionally, the SBA must (1) distinguish between rural and urban communities in the outreach and marketing for disaster loans, and (2) incorporate actions to mitigate challenges encountered by rural communities in accessing such loans.

Current Status of Bill S 397

Bill S 397 is currently in the status of Bill Introduced since February 4, 2025. Bill S 397 was introduced during Congress 119 and was introduced to the Senate on February 4, 2025. Bill S 397's most recent activity was Read twice and referred to the Committee on Small Business and Entrepreneurship. as of February 4, 2025

Bipartisan Support of Bill S 397

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Policy Area and Potential Impact of Bill S 397

Primary Policy Focus

Alternate Title(s) of Bill S 397

A bill to amend the Small Business Act to increase the minimum disaster loan amount for which the Small Business Administration may require collateral, and for other purposes.