Amends TCA Title 4; Title 7; Title 9; Title 10; Title 13; Title 45 and Title 67.

As described below, this bill enacts the "Support Micro-Businesses Act," which creates a micro-business revolving loan fund program in the department of economic and community development to support micro-businesses, which are businesses that are based in this state, independently owned and operated, and employ five or fewer individuals.<br /> <br /> This bill requires the department of economic and community development, subject to appropriations, to establish a micro-business revolving loan fund to provide low interest loans to community development financial institutions in order to provide funding for those lending organizations' loans to micro-businesses located within this state that generate economic growth and job creation within this state but that are unable to obtain adequate credit or adequate terms for credit. This bill also requires the department to direct loans to minority-owned, women-owned, and other micro-businesses that have difficulty accessing traditional credit markets.<br /> <br /> This bill authorizes the department to provide low interest loans to the following local community-based lending organizations if the use of a community development financial institution is not practicable:<br /> <br /> (1) Small business lending consortia;<br /> <br /> (2) Certified development companies;<br /> <br /> (3) Providers of U.S. department of agriculture business and industrial guaranteed loans;<br /> <br /> (4) United States small business administration loan providers;<br /> <br /> (5) Credit unions; and<br /> <br /> (6) Community banks.<br /> <br /> This bill requires the department to identify eligible lending organizations through competitive statewide or local solicitations. In order to be eligible to receive program funds, this bill requires a lending organization to establish sufficient expertise to analyze micro-business applications for program loans, evaluate the creditworthiness of micro-businesses, and regularly monitor program loans. This bill requires the lending organization to review every loan application in order to determine:<br /> <br /> (1) The feasibility of the proposed use of the requested financing by the micro-business applicant;<br /> <br /> (2) The likelihood of repayment; and<br /> <br /> (3) The potential that the loan will generate economic development and jobs in this state.<br /> <br /> This bill requires the department to create two categories of loans, a microloan with a principal amount of less than $25,000; and a loan with a principal amount of $25,000 or more. This bill requires those loans to be used for the creation and retention of jobs, including working capital; acquiring or improving real property; acquiring machinery, equipment, property, or improvements; and refinancing debt obligations.<br /> <br /> Prior to receiving program funds, this bill requires a lending organization to certify to the department that the loan complies with this bill and rules promulgated pursuant to this bill, and that the lending organization has satisfied its obligations pursuant to and in compliance with this Act, program rules, and agreements entered into between the department and the lending organization.<br /> <br /> This bill prohibits a lending organization from using more than 25 percent of the principal amount of funds received from the department to fund an applicant loan, unless the department establishes a higher allowable percentage by rule. This bill authorizes a lending organization to charge application, commitment, and loan guarantee fees pursuant to a schedule of fees adopted by the lending organization and approved by the department. However, this bill requires a lending organization to waive application fees for micro-business loans of less than $5,000.<br /> <br /> This bill requires the department to conduct a study into the factors related to increasing the number of microfinance lenders in this state; publish the study report on the department's website no later than July 1, 2023; and provide a copy of the report to the chief clerks of the senate and house of representatives for distribution to the speakers and appropriate subject matter chairs, and to the legislative librarian.<br /> <br /> This bill authorizes the department to promulgate rules to effectuate this bill.<br />