15 U.S.C. § 685: Long-term loans to…

Summary

Companies can make loans to small businesses to help them get money for good financing, growth, modernization, and expansion. Loans can be made directly or shared with other lenders, either at once or later. The Administration sets the maximum interest rate for the company’s share. For companies that issued debentures under this chapter, the Administration may allow a maximum rate based on the debenture coupon rate each year plus other company expenses it approves. Loans cannot have a term longer than twenty years. Each loan must be good value or have enough security to reasonably assure it will be repaid. A company that made a loan may extend or renew it for extra periods up to ten years if that will help with an orderly payoff.

Title 15, §685

Commerce and Trade, Source: USLM XML via OLRC

(a)Authorization

Each company is authorized to make loans, in the manner and subject to the conditions described in this section, to incorporated and unincorporated small-business concerns in order to provide such concerns with funds needed for sound financing, growth, modernization, and expansion.

(b)Direct loans; loans on participation basis

Loans made under this section may be made directly or in cooperation with other lenders, incorporated or unincorporated, through agreements to participate on an immediate or deferred basis.

(c)Maximum rate of interest

The maximum rate of interest for the company’s share of any loan made under this section shall be determined by the Administration: Provided, That the Administration also shall permit those companies which have issued debentures pursuant to this chapter to charge a maximum rate of interest based upon the coupon rate of interest on the outstanding debentures, determined on an annual basis, plus such other expenses of the company as may be approved by the Administration.

(d)Maturity

Any loan made under this section shall have a maturity not exceeding twenty years.

(e)Soundness of loan; security

Any loan made under this section shall be of such sound value, or so secured, as reasonably to assure repayment.

(f)Extension or renewal

Any company which has made a loan to a small-business concern under this section is authorized to extend the maturity of or renew such loan for additional periods, not exceeding ten years, if the company finds that such extension or renewal will aid in the orderly liquidation of such loan.

Notes & Related Subsidiaries

Editorial Notes

References in Text

For definition of “this chapter”, referred to in subsec. (c), see

References in Text

note set out under section 661 of this title.

Amendments

1992—Subsec. (c). Pub. L. 102–366 inserted before period at end “: Provided, That the Administration also shall permit those companies which have issued debentures pursuant to this chapter to charge a maximum rate of interest based upon the coupon rate of interest on the outstanding debentures, determined on an annual basis, plus such other expenses of the company as may be approved by the Administration”. 1976—Subsec. (b). Pub. L. 94–305 struck out provision that in agreements to participate in loans on a deferred basis, the participation by the company shall not be in excess of 90 percentum of the balance of the loan outstanding at the time of disbursement. 1961—Subsec. (b). Pub. L. 87–341 substituted “other lenders, incorporated or unincorporated” for “other lending institutions”.

Statutory Notes and Related Subsidiaries

Effect of Small Business Equity Enhancement Act of 1992 on Securities LawsNothing in amendment by Pub. L. 102–366 to be construed to affect applicability of securities laws or to otherwise supersede or limit jurisdiction of Securities and Exchange Commission, see section 418 of Pub. L. 102–366, set out as a note under section 661 of this title.

§685 Long-term Loans to Small-business Concerns

Summary

Title 15, §685

Notes & Related Subsidiaries

Editorial Notes

References in Text

References in Text

Amendments

Statutory Notes and Related Subsidiaries

Citations & Metadata