Preventing SBA Assistance from Going to China Act
The Preventing SBA Assistance from Going to China Act would add a new eligibility criterion to the Small Business Act, barring any small business concern that is located and incorporated in the People’s Republic of China or that has significant Chinese ownership from receiving assistance from the Small Business Administration (SBA). Specifically, a firm would be disqualified if more than 25 percent of its voting stock is owned by affiliates that are Chinese citizens or organized under Chinese law. The effect is to exclude PRC-affiliated firms from SBA programs (such as loans, loan guarantees, disaster assistance, and related SBA services) by redefining what counts as a “small business concern” for purposes of SBA support. The bill is targeted and narrow in scope, focusing on affiliation with China rather than broad changes to SBA programs. It does not create new programs or funding; rather, it changes eligibility rules to prevent SBA assistance from going to firms with strong connections to the PRC, based on location, incorporation, and ownership thresholds.
Key Points
- 1Adds a new prohibition to the SBA eligibility rule: a small business concern cannot be considered small if it is located and incorporated in the PRC or if more than 25% of its voting stock is owned by PRC citizens or affiliates organized under PRC law.
- 2Applies to “affiliates” that are citizens of China or organized under Chinese law, using voting stock as the ownership measure.
- 3The change is a direct amendment to Section 3(a) of the Small Business Act, creating a new subsection (10) titled “Prohibition on affiliation with the people’s republic of china.”
- 4The bill’s short title is the “Preventing SBA Assistance from Going to China Act.”
- 5No specific implementation timeline or enforcement mechanisms are detailed beyond the stated prohibition; it would be the SBA’s responsibility to assess eligibility under the new rule.