Summary of HR 3557: Disaster Loan Interest Waiver

Bill Overview

Bill Number: HR 3557

Title: To amend the Small Business Act to waive the accrual of interest and payments for certain disaster loans for a year, and for other purposes.

Status: Introduced in House

Introduced On: May 21, 2025

Classification: Bill

Purpose and Intent

The primary purpose of HR 3557 is to provide financial relief to small businesses affected by disasters. Specifically, the bill aims to ease the burden of disaster loans by waiving interest accrual and deferring payments for a specified period. This initiative is designed to support small businesses during their recovery from disasters declared on or after the enactment of the bill.

Key Provisions

The bill proposes the following amendments to Section 7(d) of the Small Business Act (15 U.S.C. 636(d)):

1. Zero Percent Interest Rate:
   
   For loans made under subsection (b) for disasters declared on or after the enactment of this provision, the Administrator will establish a zero percent interest rate for a period of 12 months from the date of loan disbursement.

2. Payment Deferral:
   
   During the same 12-month period, payments on the principal of such loans will be deferred, meaning that borrowers will not be required to make any principal payments during this time.

Affected Parties

The bill primarily affects:
- Small Businesses: Those that have taken out disaster loans due to federally declared disasters. The financial relief provided by this bill is intended to help them stabilize and recover without the immediate burden of loan payments and interest.
- Small Business Administration (SBA): The agency responsible for administering these loans will need to implement the changes outlined in the bill.

Legislative Actions

• May 21, 2025: The bill was introduced in the House and referred to the House Committee on Small Business for further consideration.

Sponsors

• Primary Sponsor: Joe Neguse
• Cosponsor: Juan Ciscomani

Conclusion

HR 3557 represents a significant step towards supporting small businesses in times of disaster by alleviating financial pressures associated with disaster loans. By waiving interest and deferring payments for a year, the bill aims to provide crucial support to help businesses recover and thrive in the aftermath of disasters.