Sponsors (2)
Last progress November 6, 2025 (3 months ago)
Introduced on November 6, 2025 by Jeanne Shaheen
Read twice and referred to the Committee on Small Business and Entrepreneurship.
Creates an exception to waive the Small Business Administration (SBA) guarantee fee for certain 7(a) business loans made to veterans and eligible spouses when the deferred participation share is $1,000,000 or less. The amendment also updates wording in an existing provision, removes and redesignates subparagraphs, and adds a statutory definition for "veteran or spouse of a veteran" that references various existing veteran categories.
Amends Section 7(a) of the Small Business Act (paragraph (18), subparagraph (A)) by changing the opening phrase from "With respect" to "Except as provided in subparagraph (C), with respect" to make room for a new exception.
Adds new subparagraph (C) creating an exception: the Administration may not collect a guarantee fee under subparagraph (A) for a loan guaranteed under subsection 7(a) if all three conditions are met — (I) the loan is not made under paragraph (36) or (37); (II) the loan is made to a small business concern owned by a veteran or spouse of a veteran; and (III) the deferred participation share of the total loan amount is not more than $1,000,000.
Defines the term "veteran or spouse of a veteran" for the new exception to include: (I) a veteran; (II) an individual eligible to participate in the Transition Assistance Program under 10 U.S.C. 1144; (III) a member of a reserve component named in 10 U.S.C. 10101; (IV) the spouse of an individual described in (I), (II), or (III); and (V) the surviving spouse (as defined in 38 U.S.C. 101) of an individual described in (I), (II), or (III) who died while serving on active duty or as a result of a service-connected disability. This definition appears in subparagraph (C)(ii).
In paragraph (31) of Section 7(a), strikes subparagraph (G) and redesignates subparagraph (H) as subparagraph (G).
Primary beneficiaries are veterans and eligible spouses seeking SBA 7(a) loans with a deferred participation share of $1,000,000 or less; they will save on guarantee fees, lowering upfront borrowing costs. Small businesses owned or controlled by qualifying veterans/spouses may find financing more affordable and accessible, potentially increasing loan uptake. Lenders and secondary-market participants will need to apply the waiver and use the new statutory definition for underwriting and documentation; operational impacts should be limited to eligibility verification and system updates. The SBA may see reduced guarantee-fee receipts depending on how many loans qualify, which could modestly affect program offsets or the agency's loan-guarantee-related accounts. The amendment is narrowly targeted, imposes no new mandates on states or localities, and does not create new appropriations, though it does require administrative implementation by the SBA and participating lenders. No effective date was provided in the summary; implementation timing will follow the statute's enactment provisions or subsequent SBA guidance.