S.1047 - Assisting Small Businesses Not Fraudsters Act (119th Congress)
Summary
S.1047, the "Assisting Small Businesses Not Fraudsters Act," aims to prevent individuals convicted of defrauding the government from receiving financial assistance from the Small Business Administration (SBA). The bill amends Section 16 of the Small Business Act to prohibit SBA assistance to associates of small businesses who have been convicted of financial misconduct related to covered loans or grants. The prohibition applies to the small business concern itself if it has such an associate.
Expected Effects
The Act will likely reduce fraud within SBA programs by creating disincentives for financial misconduct. It will also ensure that government funds intended for legitimate small businesses are not misused. However, it may also create additional administrative burdens for the SBA to verify the eligibility of applicants.
Potential Benefits
- Reduces the risk of fraudulent activities within SBA programs.
- Ensures that SBA funds are directed towards legitimate small businesses.
- Potentially increases public trust in government-funded programs.
- May deter individuals from engaging in financial misconduct related to government assistance.
- Could lead to a more efficient allocation of resources within the SBA.
Potential Disadvantages
- May create additional administrative burdens for the SBA in verifying applicant eligibility.
- Could potentially delay the disbursement of funds to eligible small businesses.
- May disproportionately affect small businesses in communities with higher rates of financial crime.
- The definition of "associate" could be interpreted broadly, potentially impacting legitimate businesses.
- The exclusion of Section 7(b) assistance might create a loophole, as this section covers disaster loans.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause, as it aims to prevent fraud and ensure responsible use of taxpayer money. Congress has the power to regulate commerce and provide for the general welfare through legislation like this, as outlined in Article I, Section 8. The bill does not appear to infringe on any specific constitutional rights or protections.
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).