PRIVATE DISASTER LOANS.

SEC. 12083. PRIVATE DISASTER LOANS.(a) In General.—Section 7 of the Small Business Act (15 U.S.C. 636) is amended by inserting after subsection (b) the following:“(c) Private Disaster Loans.—“(1) Definitions.—In this subsection—“(A) the term ‘disaster area’ means any area for which the President declared a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9), during the period of that major disaster declaration;“(B) the term ‘eligible individual’ means an individual who is eligible for disaster assistance under subsection (b)(1) relating to a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9);“(C) the term ‘eligible small business concern’ means a business concern that is—“(i) a small business concern, as defined under this Act; or“(ii) a small business concern, as defined in section 103 of the Small Business Investment Act of 1958;“(D) the term ‘preferred lender’ means a lender participating in the Preferred Lender Program;“(E) the term ‘Preferred Lender Program’ has the meaning given that term in subsection (a)(2)(C)(ii); and“(F) the term ‘qualified private lender’ means any privately-owned bank or other lending institution that—“(i) is not a preferred lender; and“(ii) the Administrator determines meets the criteria established under paragraph (10).“(2) Program required.—The Administrator shall carry out a program, to be known as the Private Disaster Assistance program, under which the Administration may guarantee timely payment of principal and interest, as scheduled, on 122 STAT. 2181 any loan made to an eligible small business concern located in a disaster area and to an eligible individual.“(3) Use of loans.—A loan guaranteed by the Administrator under this subsection may be used for any purpose authorized under subsection (b).“(4) Online applications.—“(A) Establishment.—The Administrator may establish, directly or through an agreement with another entity, an online application process for loans guaranteed under this subsection.“(B) Other federal assistance.—The Administrator may coordinate with the head of any other appropriate Federal agency so that any application submitted through an online application process established under this paragraph may be considered for any other Federal assistance program for disaster relief.“(C) Consultation.—In establishing an online application process under this paragraph, the Administrator shall consult with appropriate persons from the public and private sectors, including private lenders.“(5) Maximum amounts.—“(A) Guarantee percentage.—The Administrator may guarantee not more than 85 percent of a loan under this subsection.“(B) Loan amount.—The maximum amount of a loan guaranteed under this subsection shall be $2,000,000.“(6) Terms and conditions.—A loan guaranteed under this subsection shall be made under the same terms and conditions as a loan under subsection (b).“(7) Lenders.—“(A) In general.—A loan guaranteed under this subsection made to—“(i) a qualified individual may be made by a preferred lender; and“(ii) a qualified small business concern may be made by a qualified private lender or by a preferred lender that also makes loans to qualified individuals.“(B) Compliance.—If the Administrator determines that a preferred lender knowingly failed to comply with the underwriting standards for loans guaranteed under this subsection or violated the terms of the standard operating procedure agreement between that preferred lender and the Administration, the Administrator shall do 1 or more of the following:“(i) Exclude the preferred lender from participating in the program under this subsection.“(ii) Exclude the preferred lender from participating in the Preferred Lender Program for a period of not more than 5 years.“(8) Fees.—“(A) In general.—The Administrator may not collect a guarantee fee under this subsection.“(B) Origination fee.—The Administrator may pay a qualified private lender or preferred lender an origination fee for a loan guaranteed under this subsection in an amount agreed upon in advance between the qualified private lender or preferred lender and the Administrator.122 STAT. 2182“(9) Documentation.—A qualified private lender or preferred lender may use its own loan documentation for a loan guaranteed by the Administrator under this subsection, to the extent authorized by the Administrator. The ability of a lender to use its own loan documentation for a loan guaranteed under this subsection shall not be considered part of the criteria for becoming a qualified private lender under the regulations promulgated under paragraph (10).“(10) Implementation regulations.—“(A) In general.—Not later than 1 year after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, the Administrator shall issue final regulations establishing permanent criteria for qualified private lenders.“(B) Report to congress.—Not later than 6 months after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, the Administrator shall submit a report on the progress of the regulations required by subparagraph (A) to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives.“(11) Authorization of appropriations.—“(A) In general.—Amounts necessary to carry out this subsection shall be made available from amounts appropriated to the Administration to carry out subsection (b).“(B) Authority to reduce interest rates and other terms and conditions.—Funds appropriated to the Administration to carry out this subsection, may be used by the Administrator to meet the loan terms and conditions specified in paragraph (6).“(12) Purchase of loans.—The Administrator may enter into an agreement with a qualified private lender or preferred lender to purchase any loan guaranteed under this subsection.”.(b) Effective Date.—The amendments made by this section shall apply to any major disaster declared on or after the date of enactment of this Act.