Summary

Prohibits the Small Business Administration (SBA) from making any new direct loans under subsection (a) of section 7 of the Small Business Act, while requiring the SBA to continue servicing direct loans made under that authority before this law takes effect. Existing direct loan borrowers keep their loans and continued servicing, but no new direct 7(a) loans may be originated by the SBA after enactment.

Key Points

• Prohibits the SBA from making any new direct loans under subsection (a) of section 7 of the Small Business Act.
• Requires the SBA to continue servicing direct loans made under that authority before the law takes effect.
• Existing direct loan borrowers retain servicing and loan administration despite the prohibition on new originations.
• Does not, by its text, change SBA guaranteed loan programs or other loan authorities unless addressed elsewhere.
• No new appropriations or tax changes are created by this single-section change.
• Operational changes for the SBA focus on stopping originations and maintaining servicing operations.
• Small businesses seeking new SBA direct 7(a) loans will need to pursue alternate financing or other SBA programs.

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