Bill Overview
Title: SEED Act
Description: This bill requires lenders to refer applicants for certain small business loans to a resource partner if the applicant is determined ineligible for a loan under the program. Resource partners, such as small business development centers, provide informational tools and training to support business start-ups and existing business expansion. Lenders and the Small Business Administration must report on the number of resource partner referrals and the Government Accountability Office must periodically report on the rate of such referrals.
Sponsors: Rep. Sánchez, Linda T. [D-CA-38]
Target Audience
Population: People seeking small business loans and entrepreneurs
Estimated Size: 12000000
- The bill affects entrepreneurs seeking small business loans.
- It involves businesses that are startups or looking to expand, hence impacting small and medium business owners and potential entrepreneurs.
- Resource partners such as small business development centers are included, as they will provide support to these entrepreneurs.
- Lenders offering small business loans will be impacted as they need to refer applicants to resource partners if not eligible for loans.
- The Small Business Administration is involved as they must report on referrals, impacting their operational processes.
- Government Accountability Office will also be affected as they must report on the referral rates.
Reasoning
- The SEED Act primarily impacts small business owners or aspiring entrepreneurs who are seeking loans but have been denied. It connects them with resources to potentially succeed in their business ventures, which can improve their well-being over time by increasing their chances of business growth and success.
- Not everyone will be directly impacted by the policy. Some entrepreneurs may qualify for loans without needing the referral process, while others might not utilize the additional resources provided.
- Resource partners, such as small business development centers, will see an increase in clientele, but their impact on well-being will depend on the effectiveness and accessibility of their programs.
- Lenders and government agencies like the SBA and GAO might experience an increase in administrative tasks, which could lead to improvements in transparency and service efficiency over time.
- A key part of evaluating this policy's impact on personal well-being is understanding how successfully it can turn loan rejections into business opportunities through education and resources.
Simulated Interviews
Software Developer (San Francisco, CA)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- I think it's great to have a backup plan when loan applications don't work out.
- Getting connected to resources could be very helpful for someone like me with a solid idea but lacking business knowledge.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 4 |
Freelance Graphic Designer (Austin, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Having access to more training could be what I need to grow my business.
- It's frustrating not qualifying for loans, but I hope the resources will be useful.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 8 | 4 |
Restaurant Owner (Chicago, IL)
Age: 45 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- It's disappointing getting rejected for direct loans, but if the centers can help reassess my plan, it could work out.
- I'm hopeful but skeptical on the effectiveness of these resource centers. It depends on their reach and understandability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 3 |
| Year 5 | 5 | 3 |
| Year 10 | 4 | 3 |
| Year 20 | 3 | 2 |
Owner of a Small Grocery Store (New York, NY)
Age: 52 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 4/20
Statement of Opinion:
- The scope of help depends on the quality of the resource partners.
- I would appreciate guidance on marketing and operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 3 |
Retired Engineer (Houston, TX)
Age: 63 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 3/20
Statement of Opinion:
- I can leverage my industry knowledge, but business advising would be beneficial.
- I might still pursue my goals without policy due to savings, but policy support is reassuring.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Fitness Trainer (Denver, CO)
Age: 38 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Access to free business tools can be crucial, especially when loans fall through.
- The actual effectiveness of the resources will determine overall change.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 4 |
Musician (Seattle, WA)
Age: 27 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 6/20
Statement of Opinion:
- This seems helpful, especially if they teach how to handle financials and marketing.
- I'm always looking for more structured support to take bigger risks in my career.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Real Estate Agent (Miami, FL)
Age: 41 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Getting guidance on the business plan feels promising.
- I hope these resource partners offer in-depth help rather than surface-level resources.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Boutique Owner (Raleigh, NC)
Age: 36 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 7/20
Statement of Opinion:
- The concept is good, but implementation can be slow and not quite meet expectations.
- Connecting with someone knowledgeable about online business could help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Cook (Phoenix, AZ)
Age: 50 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- The resources can make a big difference, as commercial kitchen costs and permits are new to me.
- I'm cautiously optimistic about the result of the policy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 8 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 4 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Cost Estimates
Year 1: $10000000 (Low: $8000000, High: $12000000)
Year 2: $11000000 (Low: $9000000, High: $13000000)
Year 3: $11500000 (Low: $9500000, High: $13500000)
Year 5: $12000000 (Low: $10000000, High: $14000000)
Year 10: $13000000 (Low: $11000000, High: $15000000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The effectiveness of the referrals to resource partners will greatly influence the success of the program.
- Resource partners must be adequately funded and trained to handle increased demands.
- The data collection and reporting by SBA and GAO must be efficient to ensure accountability.