Summary

Allows the Small Business Administration to make loans that cover business software, cloud services, and related technologies, including tools that use artificial intelligence. It clarifies that the change does not (1) retroactively forbid past loans for these purposes, (2) authorize loans for research and development, or (3) alter the legal definition of "working capital."

Key Points

• Authorizes SBA to make loans for business software, cloud services, and related technologies, including AI tools.
• Clarifies that the change does not retroactively make past loans impermissible.
• Explicitly prohibits using these loans for research and development.
• Does not change the statutory definition of working capital.
• Changes are about permitted loan uses; the bill does not appropriate new funds.
• Small businesses and technology vendors are the primary beneficiaries.
• SBA will need updated guidance, underwriting, and documentation to implement the change.
• Raises practical issues around collateral, valuation of software subscriptions, cybersecurity, and data privacy.

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