7(a) Loan Agent Oversight Act
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Would require the Small Business Administration to submit an annual report to Congress on the agents who help small businesses apply for SBA 7(a) loans, covering fraud, referral fees, interest rates, and the concentration of risk among high-volume agents.
What this bill would do
What it would do
The bill would amend Section 47 of the Small Business Act to require the SBA Director to submit an annual report to Congress on 7(a) loan agents — people who provide fee-based assistance with loan applications, business plan preparation, and referral or brokerage services related to SBA 7(a) loans. The report must include the number and type of agents, the number of fraudulent loans involving agents, the SBA's purchase rate on agent-assisted loans, the number and total dollar value of referral fees paid (broken down by who paid them), a risk analysis of high-volume agents responsible for at least one percent of agent-assisted loan volume, an analysis of interest rates on agent-assisted loans, and a description of how the SBA communicates with agents.
The bill does not impose new licensing, registration, or conduct requirements on 7(a) agents themselves. It creates a disclosure and oversight mechanism through annual congressional reporting, not direct regulation of the agents' practices.
Key provisions
- 1Would require the SBA Director to submit an annual report to Congress on 7(a) loan agents, disaggregated by agent type consistent with existing fee-disclosure forms.
- 2Would require the report to include the number of fraudulent loans made where an applicant used a 7(a) agent and the SBA's purchase rate on those loans.
- 3Would require disclosure of the number and aggregate dollar value of referral fees paid to 7(a) agents, broken down by whether the applicant or lender paid them.
- 4Would require a consolidated, anonymized risk analysis of agents responsible for at least one percent of agent-assisted loan volume by dollar value or count.
- 5Would require the report to include an analysis of interest rates on loans for which an applicant or lender used agent services.
- 6Would define '7(a) agent' as any person providing loan-application assistance, business plan preparation, or consulting, broker, or referral services related to SBA 7(a) loans.
Who would be affected
The SBA, which would be required to compile and submit the annual report, and the 7(a) loan agents — brokers, consultants, and application-preparation services — whose activity would be tracked. Small businesses that use agents to apply for 7(a) loans would be indirectly affected, as would lenders participating in the 7(a) program whose referral fee payments would be disclosed.
Why it matters
If enacted, Congress would gain a structured, recurring data source to assess whether 7(a) agents are associated with elevated fraud or loan defaults, how much agents are being paid and by whom, and whether certain high-volume agents create outsized risk in the program — information that could inform future legislative or regulatory action targeting agent conduct.
What would change
Changes to existing law
Amends Small Business Act, Section 47 (15 U.S.C. 657t) (Sec. 2)
Adds a new subsection (j) requiring an annual report to Congress on 7(a) loan agents, including fraud data, referral fees, risk analysis, and interest rates.
Agencies directed to act
Funding and costs
Congressional Budget Office estimate
CBO estimates that implementing H.R. 1804 would cost approximately $5 million over the 2025–2030 period, subject to the availability of appropriated funds.
H.R. 1804 would require the Small Business Administration (SBA) to report annually to Congress on agents who help small businesses secure SBA-guaranteed 7(a) loans. CBO estimates the annual reporting requirement would cost roughly $1 million per year, totaling about $5 million over the 2025–2030 period. All spending would be discretionary — meaning it depends on funds being appropriated by Congress — and the bill has no effect on mandatory (direct) spending or revenues. CBO did not identify any intergovernmental or private-sector mandates in the bill.
How implementation would work
The SBA Director would produce the report annually, drawing on data already collected via the Fee Disclosure and Compensation Agreement forms and loan-performance records. The report must disaggregate agent counts by type, referral fees by payer (applicant vs. lender), and include a consolidated risk analysis — anonymized at the individual agent level — for agents responsible for at least one percent of agent-assisted loan volume by count or dollar value. No rulemaking is explicitly required; the bill adds the reporting obligation directly to the statute.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Small Business and Entrepreneurship.
Official CRS summary
Show the CRS summaryHide the CRS summary
This bill requires the Small Business Administration (SBA) to submit an annual report containing specified information related to 7(a) loan agents. These agents provide fee-based referral and loan application services related to the SBA's 7(a) Program. Under the 7(a) Program, the SBA provides loans and loan guarantees to small business borrowers who cannot obtain credit elsewhere on reasonable terms and conditions.
The required report must include (1) the number and type of agents assisting applicants for 7(a) loans, (2) the number of fraudulent loans made for which an applicant used the services of a 7(a) agent, (3) the purchase rate of loans for which an applicant used the services of a 7(a) agent, and (4) the number and aggregate dollar value of referral fees paid to 7(a) agents.
Legislative subjects
Commerce; Congressional oversight; Fraud offenses and financial crimes; Government information and archives; Government lending and loan guarantees; Government studies and investigations
Committee report
H. Rept. 119-33