S.901 - Loans In Our Neighborhoods Act of 2025; LIONs Act of 2025 (119th Congress)
Summary
S.901, the Loans In Our Neighborhoods Act of 2025 (LIONs Act of 2025), aims to amend the Small Business Act and the Small Business Investment Act of 1958. The primary goal is to increase the maximum loan amounts available to small businesses through the 7(a) loan program and development company loans. This bill was introduced in the Senate by Mr. Tillis and referred to the Committee on Banking, Housing, and Urban Affairs.
Expected Effects
The bill's passage would increase the maximum loan amount for 7(a) loans from $3,750,000 (or $5,000,000 in gross loan amount) to $7,500,000 (or $10,000,000 in gross loan amount). It would also increase the maximum loan amount for development company loans from $5,000,000 (or $5,500,000) to $10,000,000.
Potential Benefits
- Increased Access to Capital: Small businesses would have access to larger loans, enabling them to undertake more significant projects and expansions.
- Economic Growth: Larger loans could stimulate economic activity by allowing businesses to invest in growth and create jobs.
- Business Development: Development companies could finance larger projects, leading to community development and revitalization.
- Competitive Advantage: Businesses could become more competitive with increased capital for innovation and expansion.
- Simplified Loan Process: Consolidating loan programs and increasing limits could streamline the application process.
Potential Disadvantages
- Increased Risk of Default: Larger loan amounts could increase the risk of default for small businesses, especially during economic downturns.
- Potential for Inflation: Increased lending could contribute to inflation if not managed carefully.
- Strain on Lending Institutions: Lending institutions may face increased pressure to manage larger loan portfolios.
- Uneven Distribution of Benefits: The benefits may not be evenly distributed, potentially favoring larger or more established small businesses.
- Increased Government Debt: If loan defaults increase, it could lead to higher government debt and potential taxpayer burden.
Constitutional Alignment
The bill aligns with the spirit of promoting the general welfare, as stated in the Preamble of the US Constitution, by aiming to support small businesses and stimulate economic growth. Article I, Section 8, Clause 3 grants Congress the power to regulate commerce, which can be interpreted to include the regulation of small business loans. The bill does not appear to infringe upon any specific constitutional rights or limitations.
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).