Sec. 4. Definition of credit elsewhere
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The Small Business Act ( 15 U.S.C. 631 et seq.) is amended— in section 3 ( 15 U.S.C. 632 ), by striking subsection
(h)and inserting the following: The term credit elsewhere means— for the purposes of this Act (except as used in section 7(b)), the availability of credit on reasonable terms and conditions to the individual loan applicant from non-Federal, non-State, or non-local government sources, considering factors associated with conventional lending practices, including— the business industry in which the loan applicant operates; whether the loan applicant is an enterprise that has been in operation for a period of not more than 2 years; the adequacy of the collateral available to secure the requested loan; the loan term necessary to reasonably assure the ability of the loan applicant to repay the debt from the actual or projected cash flow of the business; and any other factor relating to the particular credit application, as documented in detail by the lender, that cannot be overcome except through obtaining a Federal loan guarantee under prudent lending standards; and for the purposes of section 7(b), the availability of credit on reasonable terms and conditions from non-Federal sources taking into consideration the prevailing rates and terms in the community in or near where the applicant small business concern transacts business, or the applicant homeowner resides, for similar purposes and periods of time. ; and in section 7(a)(1)(A)(i) ( 15 U.S.C. 636(a)(1)(A)(i) ), by inserting The Administrator has the authority to direct, and conduct oversight for, the methods by which lenders determine whether a borrower is able to obtain credit elsewhere. before No financial assistance .
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