Investing in America's Small Businesses Act of 2016

Investing in America's Small Businesses Act of 2016 This bill amends the Community Development Banking and Financial Institutions Act of 1994 to require the Community Development Financial Institutions Fund to make grants to community development financial institutions to enable such institutions to establish a loan-loss reserve fund to defray the costs of a small business loan program. The bill defines "small business loan program" as a program in which a community development financial institution offers loans to small businesses that: (1) are made in amounts up to $50,000, (2) have no prepayment penalty, and (3) meet any affordability requirements established by Administrator of the Fund. A community development financial institution must provide non-federal matching funds equal to 50% of the amount of any grant received. The bill prohibits the use of such grants to make direct loans to small businesses. A community development financial institution may use such a grant to: (1) help recapture a portion or all of a defaulted loan made under its small business loan program, and (2) designate and utilize a fiscal agent for services the agent normally provides. The Fund shall make technical assistance grants to community development financial institutions to create, support, or maintain such a program.