Introduced in House · Referred to the House Committee on Small Business on February 5, 2025
Small Business Disaster Damage Fairness Act of 2025 (H.R. 1021)
Live forecasts on this bill's candidate series — unconditional
Provisions
Section 2 — Collateral requirements for disaster loans
1. §2: $50,000 statutory no-required-collateral floor and broader disaster discretion
Section 2 — Collateral requirements for disaster loans
1. §2: $50,000 statutory no-required-collateral floor and broader disaster discretion
Section 7(d)(6) of the Small Business Act currently bars SBA from requiring collateral for §7(b)(1) physical disaster loans of $14,000 or less and lets the Administrator choose a higher threshold for a major disaster. Current 13 CFR 123.11 generally already uses $50,000 for physical home and business loans in presidential major disasters but retains $14,000 for physical loans in SBA-declared disasters. Section 2 would make $50,000 the statutory floor for all covered §7(b)(1) disasters and would let the Administrator select a still-higher amount for any disaster. It does not erase repayment or creditworthiness requirements, guarantee approval, or amend the separate §7(b)(2) Economic Injury Disaster Loan authority.
Quoted from the bill ▸
“by striking $14,000 and inserting $50,000” and “by striking major disaster and inserting disaster”.
Countersignable goals
Likely effects — shown regardless of the goals
Uniform statutory floor
SBA could not require collateral for a covered §7(b)(1) loan of $50,000 or less, replacing the $14,000 statutory floor and most directly changing treatment of physical loans made after SBA-declared disasters.
Broader administrative discretion
Replacing “major disaster” with “disaster” would permit the Administrator to set an unsecured threshold above $50,000 for any covered disaster, rather than reserving that discretion to a major disaster.
Participation effect
Applicants below the new floor would not be required to pledge available property or provide the associated collateral documentation, which may reduce friction or refusal-driven cancellations, but the bill does not relax repayment-capacity, eligibility, loss-verification, or loan-amount rules.
Credit and recovery trade-off
Less collateral may reduce recoveries after default even if it does not change whether borrowers default. The bill supplies no expected default, recovery, approval, take-up, or cost effect.
Implementation barriers
Small Business Administration
SBA would need to conform 13 CFR 123.11, operating procedures, forms, borrower notices, and loan systems, including the different declaration categories and aggregation of multiple physical loans after one disaster.
Applicants and loan officers
Requiring collateral below the threshold would be barred, but loan approval would still depend on eligibility and repayment ability, so a lower documentation burden need not produce more approvals or larger loans.
Evaluators
Public SBA loan files do not expose a stable collateral-required flag, pledged-asset value, refusal reason, or a clean accepted-application denominator, preventing a direct public compliance or take-up series.
Candidate outcome metrics
The current version of 13 CFR 123.11 and official SBA disaster-loan guidance: whether and when they reflect a mandatory $50,000 no-required-collateral floor for all §7(b)(1) physical disaster loans and higher-threshold discretion for any disaster. This is an enactment-contingent policy-state check, not a recurring registered series or proof of every loan decision.
SBA administrative data: approved §7(b)(1) physical-loan counts and dollars in the $14,001-to-$50,000 band, split by loan type, declaration type, and a fixed disaster cohort. Public files do not expose the collateral field or a stable application denominator, and disaster incidence and severity would dominate an unconditioned annual total.
SBA Loan Program Performance tables: Disaster program charge-off amount, charge-off rate as a share of unpaid principal balance, and post-charge-off recovery. These official fiscal-year tables aggregate loans outside the amended amount and authority, and they do not identify collateral status or report the bill's requested default-rate cohort, so they are context rather than a direct measure.
Live forecast $258,333,333 →Conditional forecast sketches
P(13 CFR 123.11 and official SBA guidance reflect a mandatory $50,000 no-required-collateral floor for all §7(b)(1) physical disaster loans by evaluation date d | §2 enacted). The bill sets no rulemaking deadline, so d would have to be preregistered separately.
P(approved count and dollars for §7(b)(1) physical disaster loans under SBA declarations in 13 CFR 123.3(a)(3) or (6), in the $14,001-to-$50,000 band | §2 enacted versus not enacted), conditioned on fixed disaster exposure. No recurring public series currently makes this resolution-ready.
Section 3 — GAO report on default rates
2. §3: one-time review of §7(b)(1) loan performance and the collateral amendment
Section 3 — GAO report on default rates
2. §3: one-time review of §7(b)(1) loan performance and the collateral amendment
Section 3 directs the Comptroller General to submit a report to the named House and Senate small-business committees no later than three years after enactment. The report must cover §7(b)(1) loan performance, including default rates, and the effect of Section 2's collateral amendments during a window beginning September 30, 2020 and ending two years after enactment. The placement of “during the period” does not clearly establish whether that window selects loan originations, observed performance, the amendment's impact, or all three. The bill neither defines “default rate” or the broader performance measures nor directs GAO to publish the committee submission.
Quoted from the bill ▸
“Not later than 3 years after the date of enactment of this Act” the Comptroller General shall submit “a report on the performance, including the default rate, of loans made under section 7(b)(1)”.
Countersignable goals
Likely effects — shown regardless of the goals
Enactment-relative evidence deadline
The statutory period would end two years after enactment and the report would be due one year later, leaving GAO a bounded analysis period but no calendar dates until enactment occurs.
Required performance scope
GAO would have to report a default rate and address the collateral amendment's impact, but “performance” could also encompass charge-offs, recoveries, delinquencies, approvals, processing, or borrower outcomes at GAO's methodological discretion.
Causal-attribution limit
Disaster mix, borrower composition, loan size, program operations, and portfolio seasoning can move defaults and recoveries independently of collateral policy; collateral may affect recovery after default without affecting the probability of default.
Implementation barriers
Government Accountability Office
GAO would need consistent loan-level data on amount, declaration and loan type, collateral decisions, origination cohort, delinquency or default, charge-offs, and recoveries relevant to a statutory period that begins years before enactment.
Government Accountability Office
A credible impact estimate needs a comparator or design that separates the statutory change from disasters and other policy or operational changes, but the bill specifies neither a counterfactual nor a denominator.
Congress and public evaluators
The statute would require submission to two committees, not public release, and would not prescribe a table, machine-readable file, revision policy, or stable series that Thesis can resolve automatically.
Candidate outcome metrics
Congressional committee records or a GAO product page showing that the §3 report was submitted to both named committees by the date three years after enactment. This is an enactment-contingent one-time event, not a recurring series, and the bill does not require a public posting.
The §3 GAO report's stated default rate and other performance estimates for §7(b)(1) loans under whatever cohort and time basis GAO adopts for the statutory period, together with its estimate or finding about Section 2's impact. The report is not yet extant, its denominator and causal method are unspecified, and no existing Thesis series can be named.
Conditional forecast sketches
P(GAO submits the §3 report to both named committees no later than three years after enactment | enactment). This is a one-sided implementation conditional; the bill does not require public release.
P(GAO-reported §7(b)(1) default rate under the cohort and time basis GAO states in the statutory report | enactment). The estimand is not resolution-ready until enactment fixes the period's end date and GAO defines the loan cohort, denominator, and performance methodology.
Section 4 — Rural and urban disaster-loan outreach
3. §4: distinguish rural communities and address their access barriers
Section 4 — Rural and urban disaster-loan outreach
3. §4: distinguish rural communities and address their access barriers
Beginning on enactment, Section 4 would require SBA's Associate Administrator for Disaster Recovery and Resilience to distinguish rural from urban communities in the disaster-loan outreach and marketing plan and incorporate actions addressing rural access challenges, consistent with GAO-24-106755. The requirement applies to the disaster loan program authorized by §7(b), not only the §7(b)(1) physical loans affected by Section 2. The bill does not define rural or urban, prescribe actions or spending, set a quantitative outcome, or require publication or recurring reporting.
Quoted from the bill ▸
The Associate Administrator “distinguishes between rural and urban communities in the outreach and marketing plan of the Administration” and “incorporates actions to mitigate challenges encountered by rural communities in accessing loans under the covered program”.
Countersignable goals
Likely effects — shown regardless of the goals
Plan-level duty
SBA would have an immediate statutory obligation to reflect rural and urban differences in its outreach plan rather than treating the GAO recommendation as nonbinding guidance.
Targeted access response
SBA could change outreach locations, channels, partners, materials, timing, or applicant assistance to address rural communications, awareness, and capacity barriers, but the bill does not select among those mechanisms.
Outcome uncertainty
A compliant plan need not change awareness, applications, approvals, timeliness, or recovery, and any rural-versus-urban comparison would also reflect disaster exposure, applicant mix, connectivity, local capacity, and credit eligibility.
Implementation barriers
Small Business Administration
SBA must choose operational definitions of rural and urban and translate an open-ended duty to “mitigate challenges” into field guidance, partner activity, and quality controls without statutory measures or minimum actions.
Office of Disaster Recovery and Resilience
The requirement begins on enactment but includes no appropriation, staffing authorization, implementation period, publication deadline, or recurring report, so capacity and external verifiability may constrain compliance.
Evaluators
Measuring access requires stable rural classifications, disaster-exposure denominators, accepted and incomplete applications, outreach contacts, and applicant outcomes; the public SBA files do not provide that recurring joined panel.
Candidate outcome metrics
An official SBA outreach and marketing plan, field guide, or other public implementation evidence that expressly distinguishes rural and urban communities and identifies actions addressing rural access challenges. The bill creates no publication duty or fixed evaluation date, and no recurring Thesis series exists.
SBA or GAO loan-level analysis using a fixed rural definition and disaster cohort: rural and urban received or accepted applications, approved, declined, withdrawn, and in-process outcomes, and post-approval cancellations. GAO-24-106755 provides a one-time FY2017–2022 baseline for those outcomes, not a recurring post-enactment official series.
No recurring official series measures rural awareness of SBA disaster loans, eligible nonapplication, outreach reach, applicant assistance, unmet financing need, or recovery attributable to SBA outreach. Application outcomes cannot identify people who never learned of or started the program.
Conditional forecast sketches
P(SBA has an operative outreach and marketing plan that expressly distinguishes rural and urban communities and identifies actions to mitigate rural access challenges by evaluation date d | §4 enacted). The bill sets no publication deadline or public-evidence rule, so d would have to be preregistered separately.
P(rural minus urban share of accepted applications approved, with accepted applications as the fixed denominator, for a fixed post-enactment disaster cohort | §4 enacted versus not enacted). No recurring public series or statutory rural definition currently makes this resolution-ready.