H.R.1375 - To amend the Small Business Act with respect to the maximum additional loan amount for certain disaster loans, and for other purposes. (119th Congress)
Summary
H.R. 1375 aims to amend the Small Business Act, specifically targeting the maximum additional loan amount available for certain disaster loans. The bill proposes increasing this maximum from 20% to 30%. This adjustment seeks to provide greater financial assistance to small businesses recovering from disasters.
Expected Effects
The immediate effect will be an increase in the potential loan amount available to eligible small businesses after a disaster. This could lead to faster recovery and rebuilding efforts. The change directly amends Section 7(b)(1)(A) of the Small Business Act.
Potential Benefits
- Increased access to capital for small businesses affected by disasters.
- Potentially faster recovery times for businesses and local economies.
- Greater financial flexibility for businesses to rebuild and adapt.
- May encourage more businesses to invest in disaster preparedness.
- Could lead to increased job retention and creation in disaster-stricken areas.
Potential Disadvantages
- Increased risk of loan defaults due to larger loan amounts.
- Potential strain on the Small Business Administration's resources.
- May not address underlying issues that make businesses vulnerable to disasters.
- Could create a moral hazard, where businesses take on more risk knowing larger loans are available.
- The increase might not be sufficient for all businesses, depending on the scale of the disaster.
Constitutional Alignment
The bill appears to align with the spirit of the Constitution, particularly the General Welfare Clause (Preamble). Congress has the power to enact laws that promote the general welfare, and supporting small businesses after disasters can be seen as fulfilling this role. Article 1, Section 8 gives Congress the power to make laws that are necessary and proper for carrying out its enumerated powers.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).