republic-os/legal/us/code/title-12/chapter-54/section-5705.md

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LegalText	12 U.S.C. § 5705	Approving collateral support and other innovative credit access and guarantee initiatives for small businesses and manufacturers	us	united_states_code	code_section	12	BANKS AND BANKING	54	STATE SMALL BUSINESS CREDIT INITIATIVE	5705	12 U.S.C. § 5705	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc12@119-100.zip	/us/usc/t12/s5705	data/legal/raw/us/code/title-12/usc12.xml	8c8c60adfd446947f7ac2dcac29a0fcf988333781314981b7fd17aafc33fb6cc	e6b98700ef4156ac33fde5d105824845d727afa91a53f3762be2cf4d1a3b01fa	f8d359ee464be0bb5fb8dbe2642af195903a21bc76388599cb4a085cd77352c4	2026-07-04	official	legal us-code

12 U.S.C. § 5705 - Approving collateral support and other innovative credit access and guarantee initiatives for small businesses and manufacturers

Text

(a) Application A participating State that establishes a new, or has an existing, credit support program that meets the eligibility criteria in subsection (c) may apply to the Secretary to have the State other credit support program approved as eligible for Federal contributions to, or for the account of, the State program.

(b) Approval The Secretary shall approve such State other credit support program as eligible for Federal contributions to, or for the account of, the program if—

(1) the Secretary determines that the State satisfies the requirements of paragraphs (1) through (3) of section 5704(b) of this title;

(2) the Secretary determines that the State other credit support program meets the eligibility criteria in subsection (c);

(3) the Secretary determines the State other credit support program to be eligible based on the additional considerations in subsection (d); and

(4) within 9 months after March 11, 2021, the State has filed with Treasury a complete application for Treasury approval.

(c) Eligibility criteria for State other credit support programs For a State other credit support program to be approved under this section, that program shall be required to be a program of the State that—

(1) can demonstrate that, at a minimum, $1 of public investment by the State program will cause and result in $1 of new private credit;

(2) can demonstrate a reasonable expectation that, when considered with all other State programs of the State, such State programs together have the ability to use amounts of new Federal contributions to, or for the account of, all such programs in the State to cause and result in amounts of new small business lending at least 10 times the new Federal contribution amount;

(3) for those State other credit support programs that provide their credit support through 1 or more financial institution lenders, requires the financial institution lenders to have a meaningful amount of their own capital resources at risk in their small business lending; and

(4) uses Federal funds allocated under this chapter to extend credit support that—

(A) targets an average borrower size of 500 employees or less;

(B) does not extend credit support to borrowers that have more than 750 employees;

(C) targets support towards loans with an average principal amount of $5,000,000 or less; and

(D) does not extend credit support to loans that exceed a principal amount of $20,000,000.

(d) Additional considerations In making a determination that a State other credit support program is eligible for Federal contributions to, or for the account of, the State program, the Secretary shall take into account the following additional considerations:

(1) The anticipated benefits to the State, its businesses, and its residents to be derived from the Federal contributions to, or for the account of, the approved State other credit support program, including the extent to which resulting small business lending will expand economic opportunities.

(2) The operational capacity, skills, and experience of the management team of the State other credit support program.

(3) The capacity of the State other credit support program to manage increases in the volume of its small business lending.

(4) The internal accounting and administrative controls systems of the State other credit support program, and the extent to which they can provide reasonable assurance that funds of the State program are safeguarded against waste, loss, unauthorized use, or misappropriation.

(5) The soundness of the program design and implementation plan of the State other credit support program.

(e) Federal contributions to approved State other credit support programs A State other credit support program approved under this section will be eligible for receiving Federal contributions to, or for the account of, the State program in an amount consistent with the schedule describing the apportionment of allocated Federal funds among State programs delivered by the State to the Secretary under the allocation agreement.

(f) Minimum Program Requirements for State other credit support programs (1) Fund 11 So in original. Probably should be “Secretary”. to prescribe The Secretary shall, by regulation or other guidance, prescribe Program requirements for approved State other credit support programs.

(2) Considerations for fund In prescribing minimum Program requirements for approved State other credit support programs, the Secretary shall take into consideration, to the extent the Secretary determines applicable and appropriate, the minimum Program requirements for approved State capital access programs in section 5704(e) of this title.

(Pub. L. 111–240, title III, § 3006, Sept. 27, 2010, 124 Stat. 2577; Pub. L. 117–2, title III, § 3301(a)(1)(D), Mar. 11, 2021, 135 Stat. 69.)

Notes

Editorial Notes

Amendments2021—Subsec. (b)(4). Pub. L. 117–2 substituted “March 11, 2021” for “September 27, 2010”.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 AmendmentAmendment by Pub. L. 117–2 applicable with respect to funds appropriated under section 3301 of Pub. L. 117–2 and funds appropriated on and after Mar. 11, 2021, see section 3301(g) of Pub. L. 117–2, set out as a note under section 5701 of this title.