HB 1438 Summary

• Establishes a small business loan program administered by the Indiana Finance Authority with a dedicated small business loan fund.

• Authorizes the Authority to transfer money from the fund to participating financial institutions at reduced interest rates (not to exceed the 52-week Treasury bill rate minus 1.5%, with a floor of 0%), which then loan to approved small businesses at rates not exceeding the Authority's rate plus 3%.

• Defines eligible small businesses as Indiana-based, independently owned entities with no more than 50 full-time employees and gross annual receipts not exceeding $5 million; requires applicants to have been profitable in at least 2 of the previous 3 years if operating for 3+ years.

• Limits individual loan deposits to a maximum of $25,000, with at least 50% of all deposits to each financial institution not exceeding $10,000; allows loan proceeds for real property, construction, equipment, inventory, and working capital purposes with a maximum 5-year loan term.

• Requires annual reporting by the Authority and annual effectiveness evaluations beginning November 2014 by the entity carrying out Indiana Economic Development Corporation duties.