HB600 Alabama 2012 Session

Summary

Primary Sponsor

Barry Moore

Republican

Session

Regular Session 2012

Title

Public authorities, Small Business Financing Authority, created within the Department of Economic and Community Affairs, incentives to small business, enrollment of certain loans with authority

Summary

The bill creates the Alabama Small Business Financing Authority to help Alabama small businesses get more capital by partnering with banks and lenders, and it sets up a Capital Access Fund to back loans and guarantees.

What This Bill Does

It establishes the Alabama Small Business Financing Authority within ADECA and authorizes it to work with banks and other lenders to provide loans, loan guarantees, insurance, and other financial help to eligible small businesses. It defines who qualifies as an eligible small business and sets criteria (income, employee count, net worth, or other needs-based factors) and includes certain not-for-profit entities. It also creates the Alabama Small Business Capital Access Fund to finance loans, guarantees, reserves, and interest rate reductions, with management by ADECA and administration by the Authority, and sets up rules and governance to run the program. Loans and guarantees funded by the Authority are not state debts, and the state is not obligated beyond the Authority’s resources.

Who It Affects

• Eligible small businesses in Alabama may gain access to more financing options and support to start or expand operations.
• Banks and other lenders may participate by making loans, servicing loans, and possibly receiving delegated loan decision authority under guidelines established by the Authority.

Key Provisions

• Creates the Alabama Small Business Financing Authority within the Department of Economic and Community Affairs (ADECA) to promote small business development and work with lenders to increase access to capital.
• Defines eligible small businesses and criteria (income, employees, net worth, or other determinations) and includes certain not-for-profit entities with 501(c)(3) status.
• Authorizes the Authority to enter into agreements with participating banks and other lenders to provide loans, guarantees, insurance, and other financing assistance under specified conditions.
• Establishes the Alabama Small Business Capital Access Fund in the State Treasury to fund loans, loan guarantees, loss reserves, and interest rate write-downs, with management by ADECA and administration by the Authority; allows matching contributions from lenders or borrowers.
• Creates a governance structure with a board and an executive director to oversee the Authority; specifies board composition, terms, and responsibilities.
• Grants the Authority broad powers to contract, employ personnel, insure, accept funds, enter into federal/state agreements, and manage funds and loan programs, including delegating loan decision authority to lenders within guidelines.
• Loans and guarantees under the act do not constitute state debt; the state is not obligated beyond the Authority’s resources, and personal liability is limited for board members and others involved in the loans.
• Requires the Authority to adopt rules governing submissions, reinvestment of proceeds, compliance with federal requirements, pricing and fees, collateral, and other terms before carrying out its powers.
• Effective date: becomes law on the first day of the third month after its passage.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Economic Development