Main Street Parity Act
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- Crpt 119Hrpt406
Summary
House Report 119–406 of the 119th Congress, submitted December 12, 2025 by Mr. WILLIAMS of Texas from the Committee on Small Business to accompany H.R. 5763, the Main Street Parity Act, together with minority views. The committee reports the bill favorably without amendment. The report states H.R. 5763 removes an additional five percent equity requirement for limited or single purpose properties under the SBA 504 loan program, citing charge-off rates for such properties. It records a hearing on September 16, 2025 and a roll call vote of 27 ayes to 0 nos on November 18, 2025, and sets out the section-by-section analysis and changes to section 502 of the Small Business Investment Act of 1958. The minority views, signed by Ranking Member Nydia M. Velázquez, support eliminating the special purpose equity requirement.
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119TH CONGRESS REPORT
" HOUSE OF REPRESENTATIVES !
1st Session 119–406
MAIN STREET PARITY ACT
DECEMBER 12, 2025.—Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. WILLIAMS of Texas, from the Committee on Small Business,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 5763]
The Committee on Small Business, to whom was referred the bill
(H.R. 5763) to amend the Small Business Investment Act of 1958
to modify the criteria for loans for plant acquisition, construction,
conversion or expansion, and for other purposes, having considered
the same, reports favorably thereon without amendment and rec-
ommends that the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary ........................................................................ 2
II. Need for Legislation .................................................................................... 2
III. Hearings ....................................................................................................... 2
IV. Committee Consideration ........................................................................... 2
V. Committee Votes ......................................................................................... 2
VI. Section-by-Section of H.R. 5763 ................................................................. 4
VII. Congressional Budget Office Cost Estimate ............................................. 4
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures 4
IX. Oversight Findings & Recommendations .................................................. 4
X. Performance Goals and Objectives ............................................................ 4
XI. Statement of Duplication of Federal Programs ........................................ 4
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits ..................................................................................................... 5
XIII. Federal Mandates Statement ..................................................................... 5
XIV. Federal Advisory Committee Statement ................................................... 5
XV. Applicability to Legislative Branch ........................................................... 5
XVI. Statement of Constitutional Authority ...................................................... 5
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XVII. Changes in Existing Law Made by the Bill, as Reported ........................ 5
XVIII. Minority Views ............................................................................................ 11
69–006
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2
I. PURPOSE AND BILL SUMMARY
On October 14, 2025, Chairman Williams, along with Represent-
ative Simon, introduced H.R. 5763, the Main Street Parity Act.
H.R. 5763 removes an additional five percent equity requirement
for limited or single purpose properties under the Small Business
Administration’s (SBA) 504 loan program.
II. NEED FOR LEGISLATION
The SBA 504 loan program provides long-term, fixed-rate financ-
ing of up to $5.5 million for acquiring fixed assets such as land,
buildings, and heavy machinery. Under the 504 loan program,
small business owners are typically required to contribute at least
ten percent of the total project cost. However, for properties classi-
fied as ‘‘limited or single purpose,’’ such as dairy farms, bowling
alleys, or nursing homes, an additional five percent of the total
project cost is required for the project. This imposes an added fi-
nancial burden on entrepreneurs because of the labeling of their
property.
This additional percentage requirement was introduced nearly 30
years ago based on the assumption that limited or single-purpose
properties pose a greater financial risk to the loan program—data
from the past 15 years disputes that assumption. Charge-off rates
for these special-purpose properties perform comparatively to, or
better than, the overall 504 loan program.
Some industries, such as bowling alleys and hospitals, even have
a zero percent charge-off rate, outperforming the 504 loan program
average charge-off rate of 0.5 percent. The additional five percent
equity requirement punishes small business owners with these lim-
ited or single purpose properties.
This bill brings parity to all industries in the 504 loan program
by eliminating the additional five percent equity requirement for
limited or single-purpose properties. H.R. 5763 will ensure that
small business owners are treated equally and not penalized based
on outdated assumptions.
III. HEARINGS
On September 16, 2025, the Committee on Small Business held
a hearing examining matters related to H.R. 5763 entitled ‘‘Path-
way to Capital: The Role of SBA Lending in Supporting Main
Street America.’’
IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on November 18, 2025, and ordered H.R.
5763 to be reported favorably to the House of Representatives by
a roll call vote of 27 ayes to 0 nos.
V. COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of Representa-
tives requires the Committee to list the recorded votes on the mo-
tion to report legislation and amendments thereto. The Committee
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voted to favorably report H.R. 5763 to the House of Representatives
at 11:41 AM.
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VI. SECTION-BY-SECTION OF H.R. 5763
Section 1—Short title
This Act may be cited as the ‘‘Main Street Parity Act.’’
Section 2—Modification to criteria for loans for plant acquisition,
construction, conversion or expansion
This section removes the statutory requirement that limited-pur-
pose property builders must provide an additional five percent eq-
uity to obtain an SBA loan under the 504 loan program.
VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
Pursuant to 3(c)(3) of rule XIII of the Rules of the House of Rep-
resentatives, the Committee adopts as its own the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to section 402 of the Congressional Budget Act of 1974. At the
time this report was filed, the Committee has requested but not re-
ceived a cost estimate from the Director of the Congressional Budg-
et Office.
VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY,
AND TAX EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House
of Representatives and section 308(a)(I) of the Congressional Budg-
et Act of 1974, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement author-
ity, and tax expenditures. While the Committee has not received an
estimate of new budget authority contained in the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to section 402 of the Congressional Budget Act of 1974, the
Committee does not believe that there will be any new or increased
costs attributable to this legislation.
IX. OVERSIGHT FINDINGS & RECOMMENDATIONS
In accordance with clause 3(c)(1) of rule XIII and clause 2(b)(1)
of rule X of the Rules of the House of Representatives, the over-
sight findings and recommendations of the Committee on Small
Business with respect to the subject matter contained in H.R. 5763
are incorporated into the descriptive portions of this report.
X. PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirements of clause 3(c)(4) of rule XIII of
the Rules of the House of Representatives, the goal of H.R. 5763
is to bring parity to all industries under the SBA’s 504 loan pro-
gram.
XI. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House
of Representatives, no provision of H.R. 5763 is known to be dupli-
cative of another Federal program, including any program that was
included in a report to Congress pursuant to section 21 of Public
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Law 111–139 or the most recent Catalog of Federal Domestic As-
sistance.
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XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS,
AND LIMITED TARIFF BENEFITS
With respect to clause 9 of rule XXI of the Rules of the House
of Representatives, the Committee finds that the bill does not con-
tain any congressional earmarks, limited tax benefits, or limited
tariff benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI of
the Rules of the House of Representatives.
XIII. FEDERAL MANDATES STATEMENT
The Committee will adopt as its own the estimate of the Federal
mandates prepared by the Director of the Congressional Budget Of-
fice pursuant to section 423 of the Unfunded Mandates Reform Act.
XIV. FEDERAL ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b) of the
Federal Advisory Committee Act were created by this legislation.
XV. APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to the
terms and conditions of employment or access to public services or
accommodations within the meaning of section 102(b)(3) of the Con-
gressional Accountability Act.
XVI. STATEMENT OF CONSTITUTIONAL AUTHORITY
Pursuant to clause 7 of rule XII of the Rules of the House, the
Committee finds that the authority for this legislation in Art. I, § 8,
cl.1 of the Constitution of the United States.
XVII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be omit-
ted is enclosed in black brackets, new matter is printed in italics,
and existing law in which no change is proposed is shown in
roman):
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be omit-
ted is enclosed in black brackets, new matter is printed in italics,
and existing law in which no change is proposed is shown in
roman):
SMALL BUSINESS INVESTMENT ACT OF 1958
* * * * * * *
TITLE V—LOANS TO STATE AND LOCAL DEVELOPMENT
COMPANIES
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* * * * * * *
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LOANS FOR PLANT ACQUISITION, CONSTRUCTION, CONVERSION, AND
EXPANSION
SEC. 502. The Administration may, in addition to its authority
under section 501, make loans for plant acquisition, construction,
conversion or expansion, including the acquisition of land, to State
and local development companies, and such loans may be made or
effected either directly or in cooperation with banks or other lend-
ing institutions through agreements to participate on an immediate
or deferred basis: Provided, however, That the foregoing powers
shall be subject to the following restrictions and limitations:
(1) USE OF PROCEEDS.—The proceeds of any such loan shall
be used solely by the borrower to assist 1 or more identifiable
small business concerns and for a sound business purpose ap-
proved by the Administration.
(2) MAXIMUM AMOUNT.—
(A) IN GENERAL.—Loans made by the Administration
under this section shall be limited to—
(i) $5,000,000 for each small business concern if the
loan proceeds will not be directed toward a goal or
project described in clause (ii), (iii), (iv), or (v);
(ii) $5,000,000 for each small business concern if the
loan proceeds will be directed toward 1 or more of the
public policy goals described under section 501(d)(3);
(iii) $5,500,000 for each project of a small manufac-
turer;
(iv) $5,500,000 for each project that reduces the bor-
rower’s energy consumption by at least 10 percent;
and
(v) $5,500,000 for each project that generates renew-
able energy or renewable fuels, such as biodiesel or
ethanol production.
(B) DEFINITION.—As used in this paragraph, the term
‘‘small manufacturer’’ means a small business concern—
(i) the primary business of which is classified in sec-
tor 31, 32, or 33 of the North American Industrial
Classification System; and
(ii) all of the production facilities of which are lo-
cated in the United States.
(3) CRITERIA FOR ASSISTANCE.—
(A) IN GENERAL.—Any development company assisted
under this section or section 503 of this title must meet
the criteria established by the Administration, including
the extent of participation to be required or amount of
paid-in capital to be used in each instance as is deter-
mined to be reasonable by the Administration.
(B) COMMUNITY INJECTION FUNDS.—
(i) SOURCES OF FUNDS.—Community injection funds
may be derived, in whole or in part, from—
(I) State or local governments;
(II) banks or other financial institutions;
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(III) foundations or other not-for-profit institu-
tions; or
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(IV) the small business concern (or its owners,
stockholders, or affiliates) receiving assistance
through a body authorized by this title.
(ii) FUNDING FROM INSTITUTIONS.—Not less than 50
percent of the total cost of any project financed pursu-
ant to øclauses (i), (ii), or (iii) of subparagraph (C)¿
clause (i) of subparagraph (C) shall come from the in-
stitutions described in subclauses (I), (II), and (III) of
clause (i).
(C) FUNDING FROM A SMALL BUSINESS CONCERN.—The
small business concern (or its owners, stockholders, or af-
filiates) receiving assistance through a body authorized by
this title shall provide—
(i) at least 15 percent of the total cost of the project
financed, if the small business concern has been in op-
eration for a period of 2 years or less; or
ø(ii) at least 15 percent of the total cost of the
project financed if the project involves the construction
of a limited or single purpose building or structure;
ø(iii) at least 20 percent of the total cost of the
project financed if the project involves both of the con-
ditions set forth in clauses (i) and (ii); or¿
ø(iv)¿ (ii) at least 10 percent of the total cost of the
project financed, in all other circumstances, at the dis-
cretion of the development company.
(D) SELLER FINANCING.—Seller-provided financing may
be used to meet the requirements of subparagraph (B), if
the seller subordinates the interest of the seller in the
property to the debenture guaranteed by the Administra-
tion.
(E) COLLATERALIZATION.—
(i) IN GENERAL.—The collateral provided by the
small business concern shall generally include a subor-
dinate lien position on the property being financed
under this title, and is only 1 of the factors to be eval-
uated in the credit determination. Additional collateral
shall be required only if the Administration deter-
mines, on a case-by-case basis, that additional security
is necessary to protect the interest of the Government.
(ii) APPRAISALS.—
(I) IN GENERAL.—With respect to commercial
real property provided by the small business con-
cern as collateral, an appraisal of the property by
a State licensed or certified appraiser—
(aa) shall be required by the Administration
before disbursement of the loan if the esti-
mated value of that property is more than the
Federal banking regulator appraisal thresh-
old; or
(bb) may be required by the Administration
or the lender before disbursement of the loan
if the estimated value of that property is
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equal to or less than the Federal banking reg-
ulator appraisal threshold, and such appraisal
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8
is necessary for appropriate evaluation of
creditworthiness.
(II) FEDERAL BANKING REGULATOR APPRAISAL
THRESHOLD DEFINED.—For purposes of this clause,
the term ‘‘Federal banking regulator appraisal
threshold’’ means the lesser of the threshold
amounts set by the Board of Governors of the Fed-
eral Reserve System, the Comptroller of the Cur-
rency, and the Federal Deposit Insurance Cor-
poration for when a federally related transaction
that is a commercial real estate transaction re-
quires an appraisal prepared by a State licensed
or certified appraiser.
(4) If the project is to construct a new facility, up to 33 per
centum of the total project may be leased, if reasonable projec-
tions of growth demonstrate that the assisted small business
concern will need additional space within three years and will
fully utilize such additional space within ten years.
(5) LIMITATION ON LEASING.—In addition to any portion of
the project permitted to be leased under paragraph (4), not to
exceed 20 percent of the project may be leased by the assisted
small business to 1 or more other tenants, if the assisted small
business occupies permanently and uses not less than a total
of 60 percent of the space in the project after the execution of
any leases authorized under this section.
(6) OWNERSHIP REQUIREMENTS.—Ownership requirements to
determine the eligibility of a small business concern that ap-
plies for assistance under any credit program under this title
shall be determined without regard to any ownership interest
of a spouse arising solely from the application of the commu-
nity property laws of a State for purposes of determining mar-
ital interests.
(7) PERMISSIBLE DEBT REFINANCING.—
(A) IN GENERAL.—Any financing approved under this
title may include a limited amount of debt refinancing.
(B) EXPANSIONS.—If the project involves expansion of a
small business concern, any amount of existing indebted-
ness that does not exceed 100 percent of the project cost
of the expansion may be refinanced and added to the ex-
pansion cost, if—
(i) the proceeds of the indebtedness were used to ac-
quire land, including a building situated thereon, to
construct a building thereon, or to purchase equip-
ment;
(ii) the existing indebtedness is collateralized by
fixed assets;
(iii) the existing indebtedness was incurred for the
benefit of the small business concern;
(iv) the financing under this title will be used only
for refinancing existing indebtedness or costs relating
to the project financed under this title;
(v) the financing under this title will provide a sub-
stantial benefit to the borrower when prepayment pen-
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alties, financing fees, and other financing costs are ac-
counted for;
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(vi) the borrower has been current on all payments
due on the existing debt for not less than 1 year pre-
ceding the date of refinancing; and
(vii) the financing under section 504 will provide
better terms or rate of interest than the existing in-
debtedness at the time of refinancing.
(C) REFINANCING NOT INVOLVING EXPANSIONS.—
(i) DEFINITIONS.—In this subparagraph—
(I) the term ‘‘borrower’’ means a small business
concern that submits an application to a develop-
ment company for financing under this subpara-
graph;
(II) the term ‘‘eligible fixed asset’’ means tan-
gible property relating to which the Administrator
may provide financing under this section; and
(III) the term ‘‘qualified debt’’ means indebted-
ness—
(aa) that was incurred not less than 6
months before the date of the application for
assistance under this subparagraph;
(bb) that is a commercial loan;
(cc) the proceeds of which were used to ac-
quire an eligible fixed asset;
(dd) that was incurred for the benefit of the
small business concern; and
(ee) that is collateralized by eligible fixed
assets.
(ii) AUTHORITY.—A project that does not involve the
expansion of a small business concern may include the
refinancing of qualified debt if—
(I) the amount of the financing is not more than
90 percent of the value of the collateral for the fi-
nancing, except that, if the appraised value of the
eligible fixed assets serving as collateral for the fi-
nancing is less than the amount equal to 125 per-
cent of the amount of the financing, the borrower
may provide additional cash or other collateral to
eliminate any deficiency;
(II) the borrower has been in operation for all of
the 2-year period ending on the date the loan ap-
plication is submitted; and
(III) for a financing for which the Administrator
determines there will be an additional cost attrib-
utable to the refinancing of the qualified debt, the
borrower agrees to pay a fee in an amount equal
to the anticipated additional cost.
(iii) FINANCING FOR BUSINESS EXPENSES.—
(I) FINANCING FOR BUSINESS EXPENSES.—The
Administrator may provide financing to a bor-
rower that receives financing that includes a refi-
nancing of qualified debt under clause (ii), in addi-
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tion to the refinancing under clause (ii), to be used
solely for the payment of business expenses.
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10
(II) APPLICATION FOR FINANCING.—An applica-
tion for financing under subclause (I) shall in-
clude—
(aa) a specific description of the expenses
for which the additional financing is re-
quested; and
(bb) an itemization of the amount of each
expense.
(III) CONDITION ON ADDITIONAL FINANCING.—A
borrower may not use any part of the financing
under this clause for non-business purposes.
(iv) LOANS BASED ON JOBS.—
(I) JOB CREATION AND RETENTION GOALS.—
(aa) IN GENERAL.—The Administrator may
provide financing under this subparagraph for
a borrower that meets the job creation goals
under subsection (d) or (e) of section 501.
(bb) ALTERNATE JOB RETENTION GOAL.—The
Administrator may provide financing under
this subparagraph to a borrower that does not
meet the goals described in item (aa) in an
amount that is not more than the product ob-
tained by multiplying the number of employ-
ees of the borrower by $75,000.
(II) NUMBER OF EMPLOYEES.—For purposes of
subclause (I), the number of employees of a bor-
rower is equal to the sum of—
(aa) the number of full-time employees of
the borrower on the date on which the bor-
rower applies for a loan under this subpara-
graph; and
(bb) the product obtained by multiplying—
(AA) the number of part-time employ-
ees of the borrower on the date on which
the borrower applies for a loan under this
subparagraph, by
(BB) the quotient obtained by dividing
the average number of hours each part
time employee of the borrower works each
week by 40.
(v) TOTAL AMOUNT OF LOANS.—The Administrator
may provide not more than a total of $7,500,000,000
of financing under this subparagraph for each fiscal
year.
* * * * * * *
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XVIII. MINORITY VIEWS
One of the primary responsibilities of the Small Business Admin-
istration (SBA) is to ensure that small businesses have access to
capital to grow and scale their respective operations. The SBA ad-
ministers multiple loan guaranty programs, including the 504/Cer-
tified Development Company (CDC) program, to provide affordable
access to capital to lead these small firms. The 504/CDC program
supports businesses in accessing long-term financing for major
fixed assets like land, buildings, equipment, and machinery. For
standard 504/CDC loans, a third-party lender provides at least 50
percent of the financing, the Certified Development Company—
guaranteed by the SBA—provides a maximum of 40 percent, and
the small business borrower provides at least 10 percent. In Fiscal
Year 2024, the 504/CDC program approved 5,994 loans totaling
$6.6 billion,1 and the program contributed to the creation and re-
tention of 64,206 jobs.2
As part of the program, the 504/CDC program provides access to
financing for the construction of limited or single purpose buildings
or structures, better known as ‘‘special purpose properties.’’ The
SBA defines ‘‘special purpose properties’’ as limited-market prop-
erties with a unique physical design, comprised of special construc-
tion materials, or have a layout that restricts its utility to the spe-
cific use for which it was built.3 Examples of special purpose prop-
erties include, but are not limited to, amusement parks, bowling al-
lies, car washes, marinas, and cemeteries. Currently, borrowers
looking to develop a ‘‘special purpose property’’ with financing
through the 504/CDC program are required to provide at least 15
percent 4 or in some cases at least 20 percent of the total cost,5 in-
stead of the at least 10 percent as required in standard 504/CDC
projects.
In 1996, when the special purpose property designation was de-
veloped, the limited function of these buildings or properties also
limited their adaptability to other uses if they were ever to be sold
by the borrower. Congress viewed the limited use nature of these
properties as potentially reducing the universe of possible buyers
and thereby associating a heightened level of risk with these prop-
erties.
Yet almost thirty years have passed since Congress increased the
equity requirement for these properties and the technological im-
provements and enhancements in building construction and reha-
bilitation have increased the adaptability and utility of these prop-
1 U.S. Small Business Administration. 7(a) & 504 Summary Report. (Last Accessed: September
24, 2025).
2 National Association of Development Companies. 504 Loan Impact Across America. (Pg. 7).
3 Small Bus. Admin. SOP 50.10.8: Lender and Development Company Loan Programs. (June
1, 2025), (Pg. 140).
4 15 U.S.C. § 696(3)(C)(ii).
5 15 U.S.C. § 696(3)(C)(iii).
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(11)
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12
erties. Moreover the 10-year charge off rate for 504/CDC loans for
designated ‘‘special purpose properties’’ (0.5 percent) 6 is com-
parable to the 10-year charge of rates for standard 504/CDC loans
(0.41 percent),7 demonstrating that ‘‘special purpose properties’’
pose no greater risk to the 504/CDC loan portfolio and the zero-
subsidy requirement than standard 504/CDC loans.
The additional equity required of small business borrowers own-
ing and operating ‘‘special purpose properties’’ can, in many in-
stances, be excessively burdensome and act as a significant barrier
to accessing 504/CDC financing. Therefore, in order to ease this
burden, it has become appropriate to lower the equity requirement
for financing the purchase and development of these properties.
Eliminating the special purpose penalty would reduce the burden
that these businesses face when accessing capital, treat them sub-
stantially similar to standard 504/CDC financed properties, and
allow these businesses to operate more efficiently.
NYDIA M. VELÁZQUEZ,
Ranking Member.
Æ
6 NADCO. Special Use Property Charge Off Rates by NAICS Code. (2025). On File with House
Small Business Committee, Minority Staff. Available for Review Upon Request.
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7 Small Bus. Admin. Small Business Administration Loan Program Performance, Table 9—
Charge Off Rate as a Percent of Unpaid Principal Balance. (Last accessed: Sept. 24, 2025).
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