AB 294

Under current law, the Wisconsin Housing and Economic Development

Authority (WHEDA) administers the small business development loan guarantee

program (program). Under the program, WHEDA may guarantee repayment of up

to the lesser of $200,000 or 80 percent of the principal of a loan made by a private

lender to a small business or the elected governing body of a federally recognized

American Indian tribe in this state. A small business development loan that is

guaranteed by WHEDA may be used for expenses associated with the expansion or

acquisition of a business, with the start-up of a day care business, or the start-up

of a small business in a vacant storefront in the downtown area of a rural community.

Under current law, a "small business" means a business that employs fewer than 50

full-time employees.

This bill makes the following changes to the program:

1. The cap on the amount of a loan that may be guaranteed under the program

is raised from $200,000 or 80 percent of the principal of the loan to $500,000 or 80

percent of the principal of the loan.

2. The definition of "small business" is expanded from businesses that employ

up to 50 full-time employees to businesses that employ up to 250 full-time

employees.

3. The requirement that the owner of a small business be actively engaged in

the small business in order to qualify for the program is deleted.

4. The permitted use of proceeds of a loan for the start-up of a small business

in a vacant storefront in a downtown area is expanded to apply to a community of any

size by removing the limitation to rural communities.