MD HB601

Removes the requirement that Small Business Guaranty Fund guarantees be backed by the full faith and credit of the State of Maryland

Authorizes the Maryland Small Business Development Financing Authority to provide guarantees through alternative instruments including irrevocable letters of credit, official treasurer's checks, escrow or depository account funds, or other legal instruments promising reimbursement for loan losses

Prohibits terms and conditions on these alternative guarantee instruments from being so onerous as to discourage financial institutions from offering loans

Maintains existing program parameters: loans must be $5,000 minimum with guarantees up to $2,000,000, covering up to 80% of principal and interest on loans maturing within 10 years

Takes effect October 1, 2025