Bill > SB1008

This bill modifies the Maryland Small Business Development Financing Authority's Small Business Guaranty Fund by expanding the forms of guaranty that can be provided to financial institutions for small business loans. Specifically, the bill allows the Authority to authorize guarantees through various financial instruments, including an irrevocable letter of credit, an official treasurer's check, funds deposited in an escrow or depository account, or any other legal instrument that promises reimbursement for loan losses, all within specified limits. The bill maintains existing requirements that loans must be for amounts between $5,000 and $2,000,000, used for purposes such as working capital, debt refinancing, equipment acquisition, property improvements, or real property acquisition, and must mature within 10 years. The Authority must still determine that the loan will have a substantial economic impact, which can be assessed by considering factors like the guaranty obligation amount, loan terms, potential job creation, and other relevant considerations. The legislation ensures that the terms of these financial instruments cannot be so restrictive that they discourage financial institutions from offering the loans. The bill is set to take effect on October 1, 2025, and aims to provide more flexible financial support for small businesses in Maryland.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/SB1008?ys=2025RS