Bill Overview
Title: Collateral Requirements for Disaster Loans Act
Description: This bill makes permanent the increased threshold limits for the minimum major-disaster loan amount for which the Small Business Administration may require collateral.
Sponsors: Rep. Velazquez, Nydia M. [D-NY-7]
Target Audience
Population: Individuals and Businesses Impacted by Major Disasters
Estimated Size: 800000
- The bill relates to disaster loans and impacts those who are eligible for disaster loans, which includes individuals and businesses affected by major disasters.
- Disaster loans are often targeted at recovery efforts for impacted areas, often including homeowners, renters, businesses, and non-profit organizations.
- The Small Business Administration (SBA) handles the direct disbursement of these loans, which are commonly issued during times of declared natural disasters.
- The bill focuses on the collateral requirements set by the SBA for such loans, implying a change for borrowers who need financial backing post-disaster.
Reasoning
- The simulated interviews consider the impact on a diverse set of stakeholders including small business owners, homeowners, renters, and individuals in diverse geographic and economic situations.
- Budget limitations imply only a portion of eligible applicants could receive benefits within the first year, highlighting the importance of rank and need in the loan approval process.
- The impact on wellbeing is also varied; while some experience significant relief, others may not benefit at all, maintaining pre-policy wellbeing scores throughout the evaluated durations.
Simulated Interviews
Small Business Owner (Miami, FL)
Age: 45 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- The increased threshold will help us secure a loan without risking too much of our limited assets.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 6 | 4 |
Homeowner (Santa Rosa, CA)
Age: 34 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- I need all the help I can get to rebuild our home after the fire.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 3 |
| Year 3 | 5 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 3 |
Non-Profit Employee (New Orleans, LA)
Age: 28 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 5/20
Statement of Opinion:
- This will make it easier for our non-profit to continue helping those in need.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Homeowner (Houston, TX)
Age: 52 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 7/20
Statement of Opinion:
- If I can get a better deal on a loan, it will ease my retirement worries.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Small Business Owner (New York, NY)
Age: 39 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- This bill will let us take loans without putting our entire business on the line.
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 | 9 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 4 |
Renter (Des Moines, IA)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- My landlord might benefit, but it doesn't really change things for me directly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Retired (Gulf Coast, MS)
Age: 65 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- I hope this means less red tape and a quicker rebuild.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 2 |
Community Organizer (Tucson, AZ)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 6/20
Statement of Opinion:
- My role won't be directly impacted, but it might help speed up recovery.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 5 |
Homeowner and Small Business Owner (San Juan, PR)
Age: 23 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- This could ease the pressure if I qualify.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 2 |
Homeowner (Paradise, CA)
Age: 44 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 7/20
Statement of Opinion:
- Any additional support for rebuilding is helpful.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $50000000 (Low: $30000000, High: $70000000)
Year 2: $52000000 (Low: $32000000, High: $72000000)
Year 3: $54000000 (Low: $34000000, High: $74000000)
Year 5: $58000000 (Low: $38000000, High: $78000000)
Year 10: $68000000 (Low: $48000000, High: $88000000)
Year 100: $150000000 (Low: $130000000, High: $170000000)
Key Considerations
- The policy's effectiveness highly depends on the frequency and scale of natural disasters in the United States.
- There are uncertainties regarding administrative costs triggered by SBA rule changes under the new collateral guidelines.
- The actual economic impact may vary significantly across geographic regions based on disaster frequency and severity.