article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Strengthening Entrepreneurs' Economic Development Act of 2013''. SEC. 2. DIRECT LENDING PROGRAM FOR SMALL BUSINESS CONCERNS. (a) Establishment.--The Administrator of the Small Business Administration shall-- (1) establish and carry out a loan program (in this Act referred to as the ``program''); and (2) establish a process under which an eligible small business concern may submit an application to the Administrator for the purpose of securing a loan under the program. (b) Loan Amount.--Each loan made to an eligible small business concern under the program shall be in an amount not to exceed $150,000. (c) Repayment Period.--An eligible small business concern that receives a loan under the program shall repay the loan not later than 6 years after the date on which such loan is disbursed. (d) No Prepayment Penalty.--There shall be no prepayment penalty on a loan made under the program. (e) Interest Rate.--The maximum legal rate of interest on any loan made under the program shall not exceed the sum of the rate prescribed by the Administrator pursuant to section 7(a)(4)(A) of the Small Business Act (15 U.S.C. 636(a)(4)(A)) for direct loans plus 5 percent. (f) Borrower Fees.--With respect to each loan made to an eligible small business concern under the program, the Administrator may collect a fee from the borrower using the formula established under section 7(a)(18) of the Small Business Act (15 U.S.C. 636(a)(18)). (g) Underwriting Standards.--Not later than 180 days after the date of enactment of this Act, the Administrator shall issue guidance regarding prudent underwriting standards that must be used for loans made under the program. (h) Lender Participation.-- (1) Lenders.-- (A) In general.--The Administrator shall establish a process under which the Administrator makes available to lenders each loan application submitted for the purpose of such lenders originating, underwriting, closing, and servicing the loan for which the applicant applied. (B) Eligibility.--Lenders are eligible to receive a loan application described in subparagraph (A) if they participate in the program. (C) Local lenders.--The Administrator shall first make available a loan application described in subparagraph (A) to lenders within 50 miles of the principal office of the loan applicant. (D) Preferred lenders.--If a lender described in subparagraph (C) does not agree to originate, underwrite, close, and service the loan applied for within 5 business days of receiving a loan application described in subparagraph (A), the Administrator shall subsequently make available such loan application to lenders in the Preferred Lenders Program under section 7(a)(2)(C)(ii) of the Small Business Act (15 U.S.C. 636(a)(2)(C)(ii)). (E) Authority of administration to lend.--If a lender described in subparagraphs (C) and (D) does not agree to originate, underwrite, close, and service the loan applied for within 10 business days of receiving a loan application described in subparagraph (A), the Administrator shall, in accordance with the underwriting standards promulgated under subsection (g), consider such loan for origination, underwriting, closing, and servicing by the Administration within 10 business days. (2) Asset sales.--The Administrator shall offer to sell loans made by the Administrator under the program. Such sales shall be made through the semi-annual public solicitation (in the Federal Register and in other media) of offers to purchase. The Administrator may contract with vendors for due diligence, asset valuation, and other services related to such sales. The Administrator may not sell any loan under the program for less than 90 percent of the net present value of the loan, as determined and certified by a qualified third party. (3) Loans not sold.--The Administrator shall maintain and service loans made by the Administrator under this paragraph that are not sold through the asset sales under this subsection. (i) Definitions.--In this Act: (1) Administrator.--The term ``Administrator'' means the Administrator of the Small Business Administration. (2) Eligible small business concern.--The term ``eligible small business concern'' means a small business concern that has less than 20 employees. (3) Small business concern.--The term ``small business concern'' has the same meaning given such term under section 3 of the Small Business Act (15 U.S.C. 632). SEC. 3. FEE FOR HIGH-DOLLAR 7(A) LOANS. Section 7(a) of the Small Business Act is amended-- (1) by redesignating paragraphs (31) through (35) as paragraphs (32) through (36); and (2) by inserting the following new paragraph: ``(31) Fee for high-dollar loans.--With respect to each loan in excess of $2,000,000 approved under this subsection, the Administration shall assess, collect, and retain a fee not to exceed a certain percentage, as determined by the Administrator, of the outstanding balance of the deferred participation share of the loan, as necessary to reduce to zero the cost to the Administration of making loans under this subsection. As used in the paragraph, the term `cost' has the meaning given that term in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a).''.
summary: Strengthening Entrepreneurs' Economic Development Act of 2013 - Directs the Administrator of the Small Business Administration (SBA) to establish and carry out a direct lending program for small businesses (businesses with fewer than 20 employees). Sets forth provisions governing the amount and repayment period of, and interest rate on, such a loan. Authorizes the Administrator to collect a fee from the borrower. Directs the Administrator to: (1) issue guidance regarding prudent underwriting standards for such loans; (2) establish a process of making each loan application available to lenders for the purpose of originating, underwriting, closing, and servicing the loan; (3) first give priority to lenders within 50 miles of the principal office of the applicant, then make such applications available to lenders in the Preferred Lenders Program, and then consider such a loan for origination, underwriting, closing, and servicing by the Administrator; (4) offer to sell loans made under the program through the semi-annual public solicitation of offers to purchase; and (5) maintain and service loans that are not sold through asset sales. Amends the Small Business Act to require the SBA, for each small business loan in excess of $2 million that is approved under such Act, to collect a fee not to exceed a certain percentage of the outstanding balance of the deferred participation share of the loan as necessary to reduce to zero the cost to the SBA of making such loan.