Assisting Small Businesses Not Fraudsters Act

Section 16 of the Small Business Act (15 U.S.C. 645) is amended by adding at the end the following new subsection:

An associate of a small business concern who is finally convicted of any crime involving or relating to financial misconduct or a false statement with respect to a covered loan or grant shall be ineligible to receive any financial assistance from the Administrator, other than financial assistance under section 7(b).

A small business concern that has as an associate an individual subject to paragraph (1) shall be ineligible to receive any financial assistance from the Administrator, other than financial assistance under section 7(b).

In this subsection:

The term associate means, with respect to a small business concern—

(i) an officer, director, or owner of more than 20 percent of the equity of, or a key employee of, such small business concern;

(ii) any entity not less than 20 percent owned or controlled by one or more individuals referred to in clause (i); and

(iii) any other individual or entity in control of or controlled by such small business concern, except for a licensed small business investment company (as defined in section 103(3) of the Small Business Investment Act of 1958 (15 U.S.C. 662(3))).

The term covered loan or grant means—

(i) a loan made under—

(I) paragraph (36) or (37) of subsection (a) of section 7; or

(II) subsection (b) of such section in response to the COVID–19 pandemic; or

(ii) a grant made under—

(I) section 5003 of the American Rescue Plan Act of 2021 (15 U.S.C. 9009c); or

(II) section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (15 U.S.C. 9009a).

The term finally convicted means, with respect to a person, that such person has been convicted of an offense and such conviction—

(i) has not been appealed and is no longer appealable because the time for taking an appeal has expired; or

(ii) has been appealed and the appeals process for such conviction is completed.

Subsection (h) of section 16 of the Small Business Act (15 U.S.C. 645), as added by subsection (a) of this Act, shall not apply to any contract or other agreement entered into by the Government prior to the date of the enactment of this Act.