Full Text of SB3243 97th General Assembly
SB3243eng 97TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning microlending.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the | 5 | | Microloan Program Act. | 6 | | Section 5. Definitions. For purposes of this Act: | 7 | | "Department" means the Department of Commerce and Economic | 8 | | Opportunity. | 9 | | "Director" means the Director of Commerce and Economic | 10 | | Opportunity. | 11 | | "Intermediary" means: (i) a private, non-profit entity; | 12 | | (ii) a private, non-profit community development corporation; | 13 | | (iii) a consortium of private, non-profit organizations or | 14 | | non-profit community development corporations; or (iv) a | 15 | | quasi-governmental economic development entity (such as a | 16 | | planning and development district) if no application is | 17 | | received from an eligible non-profit organization or the | 18 | | Director determines that the needs of a region or geographic | 19 | | area are not adequately served by an existing, eligible | 20 | | non-profit organization that has submitted an application. | 21 | | "Intermediary" also includes an intermediary that has | 22 | | completed the training program created and administered by the | 23 | | Director under Section 50. |
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| 1 | | "Microloan" means a short-term, fixed rate loan of not more | 2 | | than $35,000, made by an intermediary to a small business | 3 | | concern. | 4 | | "Rural area" means any political subdivision or | 5 | | unincorporated area: (i) in a non-metropolitan county (as | 6 | | defined by the Secretary of Agriculture) or its equivalent; or | 7 | | (ii) in a metropolitan county or its equivalent that has a | 8 | | resident population of less than 20,000 if the Department of | 9 | | Commerce and Economic Opportunity has determined such a | 10 | | political subdivision or area to be rural. | 11 | | "Small business concern" means a legal entity, including a | 12 | | corporation, partnership, or sole proprietorship, that: (i) is | 13 | | formed for the purpose of making a profit; (ii) is | 14 | | independently owned and operated; and (iii) has 5 employees or | 15 | | fewer. | 16 | | Section 10. Purposes. The purposes of the Microloan Program | 17 | | are: | 18 | | (1) to assist female, low-income, veteran, and | 19 | | minority entrepreneurs and business owners and other | 20 | | individuals possessing the capability to operate | 21 | | successful business concerns; | 22 | | (2) to assist small business concerns in those areas | 23 | | suffering from a lack of credit due to economic downturns; | 24 | | (3) to establish a microloan program to be administered | 25 | | by the Department of Commerce and Economic Opportunity in |
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| 1 | | order to: | 2 | | (A) make grants to eligible intermediaries to | 3 | | enable those intermediaries to provide small-scale | 4 | | loans to small business concerns for working capital or | 5 | | the acquisition of materials, supplies, or equipment; | 6 | | and | 7 | | (B) make grants to eligible intermediaries that, | 8 | | together with non-State matching funds, will enable | 9 | | those intermediaries to provide intensive marketing, | 10 | | management, and technical assistance to microloan | 11 | | borrowers. | 12 | | Section 15. Microloan program established. Subject to | 13 | | appropriation, a microloan program is established in the | 14 | | Department of Commerce and Economic Opportunity under which the | 15 | | Director of Commerce and Economic Opportunity may: | 16 | | (1) make grants to eligible intermediaries, as | 17 | | provided under Section 25, for the purpose of making | 18 | | short-term, fixed interest rate microloans to small | 19 | | business concerns; | 20 | | (2) in conjunction with these grants and subject to the | 21 | | requirements of Section 30, make grants to these | 22 | | intermediaries for the purpose of providing intensive | 23 | | marketing, management, and technical assistance to small | 24 | | business concerns that are borrowers under this Act; and | 25 | | (3) issue grants to administer a training program to |
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| 1 | | train intermediaries in the knowledge, skills, and | 2 | | understanding of microlending necessary to operate | 3 | | successful microloan programs. | 4 | | Section 20. Eligibility for participation. An intermediary | 5 | | shall be eligible to receive loans and grants under paragraphs | 6 | | (1) and (2) of Section 15 if it meets the definition of | 7 | | intermediary in Section 5. | 8 | | Section 25. Grants to intermediaries. | 9 | | (a) As part of its application for a grant, each | 10 | | intermediary shall submit a description to the Director of the | 11 | | type of businesses to be assisted; the size and range of loans | 12 | | to be made; the geographic area to be served and its economic, | 13 | | poverty, and unemployment characteristics; the status of small | 14 | | business concerns in the area to be served and an analysis of | 15 | | their credit and technical assistance needs; any marketing, | 16 | | management, and technical assistance to be provided in | 17 | | connection with a loan made under this Act; the local economic | 18 | | credit markets, including the costs associated with obtaining | 19 | | credit locally; the qualifications of the applicant to carry | 20 | | out the purpose of this Act; and any plan to involve other | 21 | | technical assistance providers or private sector lenders in | 22 | | assisting selected business concerns. | 23 | | (b) As a condition of any grant made to an intermediary | 24 | | under paragraph (2) of Section 15, the Department shall require |
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| 1 | | the intermediary to contribute not less than 15% of the grant | 2 | | amount in cash as a match from non-State sources. | 3 | | (c) No grant shall be made to an intermediary under this | 4 | | Act if the total amount outstanding and committed to that | 5 | | intermediary (excluding outstanding grants) from the Business | 6 | | Microloan and Investment Fund would, as a result of that grant, | 7 | | exceed $750,000 in the first year of the intermediary's | 8 | | participation in the program or $3,500,000 in later years of | 9 | | the intermediary's participation in the program. | 10 | | (d) An intermediary may make a loan under this Act of not | 11 | | more than $35,000 to a small business concern only if the small | 12 | | business concern demonstrates that it is unable to obtain | 13 | | credit elsewhere at comparable interest rates and that it has | 14 | | good prospects for success. In no case shall an intermediary | 15 | | commit to any one borrower more than $35,000. | 16 | | Section 30. Marketing, management, and technical | 17 | | assistance grants to intermediaries. The Department may make | 18 | | grants to intermediaries that receive a grant under paragraph | 19 | | (1) of Section 15 to provide marketing, management, and | 20 | | technical assistance to small business concerns that are | 21 | | prospective borrowers or borrowers under this Act. | 22 | | Section 35. Program funding for microloans. Under the | 23 | | program authorized by this Act, the Department may fund, on a | 24 | | competitive basis, not more than 300 intermediaries annually. |
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| 1 | | Section 40. Equitable distribution of intermediaries. In | 2 | | approving intermediaries and providing funding to | 3 | | intermediaries under this Act, the Department shall select and | 4 | | provide funding to intermediaries as will ensure appropriate | 5 | | availability of loans for small businesses in all industries | 6 | | located throughout the State, particularly those located in | 7 | | urban and in rural areas.
| 8 | | Section 45. Grants for management, marketing, technical | 9 | | assistance, and related services.
| 10 | | (a) The Department may procure technical assistance for | 11 | | intermediaries participating in the Microloan Program to | 12 | | ensure that those intermediaries have the knowledge, skills, | 13 | | and understanding of microlending practices necessary to | 14 | | operate successful microloan programs. | 15 | | (b) The General Assembly may appropriate up to 7% of the | 16 | | balance in the Business Microloan and Investment Fund to the | 17 | | Department for the specific purpose of providing one or more | 18 | | technical assistance grants to experienced microlending | 19 | | organizations that have demonstrated experience in providing | 20 | | training support for microenterprise development and financing | 21 | | to achieve the purposes set forth in Section 10. | 22 | | Section 50. Training program. The Department may issue | 23 | | grants to administer a training program for intermediaries that |
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| 1 | | presently have minimal or no expertise or experience in | 2 | | microlending. The training program shall train the | 3 | | intermediaries in the knowledge, skills, and understanding of | 4 | | microlending practices necessary to operate successful | 5 | | microloan programs. | 6 | | Section 55. Report to General Assembly. On November 1, | 7 | | 2014, the Department shall submit to the General Assembly a | 8 | | report, including the Department's evaluation of the | 9 | | effectiveness of the microloan program and the following: | 10 | | (1) the numbers and locations of the intermediaries | 11 | | funded to conduct microloan programs; | 12 | | (2) the amounts of each grant to intermediaries; | 13 | | (3) a description of the matching contributions of each | 14 | | intermediary; | 15 | | (4) the numbers and amounts of microloans made by the | 16 | | intermediaries to small business concern borrowers; | 17 | | (5) a summary of the repayment history of each | 18 | | intermediary; | 19 | | (6) a description of the loan portfolio of each | 20 | | intermediary including the extent to which it provides | 21 | | microloans to small business concerns in rural areas; and | 22 | | (7) any recommendations for legislative changes that | 23 | | would improve program operations. | 24 | | Section 60. Business Microloan and Investment Fund. The |
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| 1 | | Business Microloan and Investment Fund is created as a special | 2 | | fund in the State treasury to accept appropriations, grants, | 3 | | gifts, and other donations made to fund the Microloan Program | 4 | | created by this Act. Moneys in the Fund may, subject to | 5 | | appropriation, be used by the Department to carry out the | 6 | | requirements of this Act. | 7 | | Section 95. The State Finance Act is amended by adding | 8 | | Section 5.811 as follows: | 9 | | (30 ILCS 105/5.811 new) | 10 | | Sec. 5.811. The Business Microloan and Investment Fund. |
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