Main Street Employee Ownership 2.0 Act of 2024 — Full text

Section 1. Short title

This Act may be cited as the Main Street Employee Ownership 2.0 Act of 2024.

Section 2. Prohibition of seller guarantees

Section 7(a)(15)(B)(iv) of the Small Business Act (15 U.S.C. 636(a)(15)(B)(iv)) is amended to read as follows:

(iv) with respect to a loan made to a trust or to a cooperative in accordance with paragraph (35), a seller of the small business concern may remain involved as an officer, director, or key employee of the small business concern after a qualified employee trust or cooperative has acquired 100 percent of ownership of the small business concern.

Section 3. Prohibition of certain requirements relating to lending to qualified employee trusts and cooperatives

Section 7(a)(15) of the Small Business Act (15 U.S.C. 636(a)(15)(G)) is amended by striking subparagraph (G) and inserting the following new subparagraphs::

(G) With respect to a loan made to a qualified employee trust under this paragraph or to a cooperative in accordance with paragraph (35), the Administrator—

(i) may not, as a condition of such loan—

(I) require the qualified employee trust or cooperative to provide any mandatory equity;

(II) require the qualified employee trust or cooperative to obtain from the Secretary of the Treasury a determination letter with respect to its status as a qualified employee trust or cooperative (as applicable); or

(III) require the qualified employee trust or cooperative to obtain or submit an additional valuation of the qualified employee trust or cooperative (as applicable) if the qualified employee trust or cooperative has already obtained a valuation from a third party pursuant to any Federal law; and

(ii) shall allow the qualified employee trust or cooperative to submit an opinion letter with respect to its status as a qualified employee trust or cooperative (as applicable) at any time.

Section 4. Prohibition of personal or entity guarantee requirement

Section 7(a)(35)(B) of the Small Business Act (15 U.S.C. 636(a)(35)(B)) is amended to read as follows:

(i) In general

The Administrator shall guarantee loans made to a cooperative for the purpose described in paragraph (15).

(ii) Prohibition on personal or entity guarantee

The Administrator may not require a cooperative to provide a personal guarantee or an entity guarantee for a loan under this subsection.

Section 5. Delegated authority for 7 (a) Preferred Lenders Program loans to qualified employee trusts and cooperatives

Section 5(b)(7) of the Small Business Act (15 U.S.C. 634(b)(7)) is amended by striking the semicolon after liquidation and inserting the following: : Provided further, That the Administrator shall permit deferred participation loans that are guaranteed under paragraph (15) or (35) of section 7(a) to be processed under the lender’s delegated authority to make and close loans under this subsection;.

Section 6. Cooperative eligibility for disaster assistance program

Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is amended—

(1) in paragraph (1)(A), by inserting, including to a cooperative as defined in subsection (a)(35)(A), after basis);

(2) in paragraph (1)(B), by inserting (including such a home or concern of a cooperative as defined in subsection (a)(35)(A)) after business concern; and

(3) in paragraph (2), by inserting after small business concern the following: (including to a cooperative as defined in subsection (a)(35)(A)).