H.R.1021 - Small Business Disaster Damage Fairness Act of 2025 (119th Congress)
Summary
H.R.1021, the Small Business Disaster Damage Fairness Act of 2025, aims to amend the Small Business Act. The bill seeks to increase the minimum disaster loan amount for which the Small Business Administration (SBA) may require collateral from $14,000 to $50,000. It also mandates a GAO report on the performance and default rates of disaster loans, and requires the SBA to distinguish between rural and urban communities in its disaster loan outreach efforts.
Expected Effects
The Act will likely result in small businesses being able to access larger disaster loans without needing to provide collateral. The GAO report will provide data on the effectiveness of the SBA's disaster loan program. Furthermore, the SBA will tailor its outreach to better serve rural communities.
Potential Benefits
- Increased Access to Capital: Small businesses can access larger disaster loans without collateral.
- Improved SBA Outreach: Rural communities will receive more targeted assistance.
- Data-Driven Improvements: The GAO report will inform future policy decisions.
- Fairer Loan Terms: Adjusting collateral requirements reduces the burden on small businesses.
- Economic Recovery: Facilitates quicker recovery for businesses after disasters.
Potential Disadvantages
- Increased Risk of Default: Higher loan amounts without collateral could lead to higher default rates.
- Potential for Abuse: The relaxed collateral requirements might be exploited.
- Administrative Burden: Implementing differentiated outreach programs may increase administrative costs.
- Delayed Impact: The GAO report takes three years, delaying potential improvements.
- Limited Scope: The Act primarily focuses on loan amounts and outreach, potentially neglecting other critical aspects of disaster recovery.
Constitutional Alignment
The bill aligns with the Constitution's Article I, Section 8, which grants Congress the power to regulate commerce and provide for the general welfare. By amending the Small Business Act, Congress is exercising its authority to support small businesses, which are vital to the economy. There are no apparent conflicts with individual rights or freedoms guaranteed by the Bill of Rights.
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).