Bill > HB601

This bill modifies the Maryland Small Business Development Financing Authority's (the Authority) rules for providing loan guarantees through the Small Business Guaranty Fund. The bill expands the forms of guaranty that the Authority can provide, now allowing guarantees through an irrevocable letter of credit, an official treasurer's check, funds on deposit in an escrow or depository account, or any other legal instrument that promises financial institutions reimbursement for loan losses. The bill maintains existing requirements that the Authority can guarantee up to 80% of a loan's principal and interest, with loans ranging from $5,000 to $2,000,000 for purposes like working capital, debt refinancing, equipment acquisition, property improvements, or property acquisition. The loan must mature within 10 years and have an interest rate not exceeding the monthly weighted average prime lending rate plus 2%. The Authority must still determine that the loan will have a substantial economic impact, which can be assessed by considering factors such as the guaranty obligation amount, loan terms, potential job creation, and other relevant considerations. The bill will take effect on October 1, 2025, providing more flexible financial support mechanisms for small businesses in Maryland.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0601?ys=2025RS