Economic Development - Small Business Guaranty Fund - Alterations

HB 601 amends Maryland's Small Business Guaranty Fund program (Section 5-540 of the Economic Development Article) to expand how loan guarantees can be supported. It now allows guarantees to be backed by the State’s full faith and credit *or* by alternative financial instruments like irrevocable letters of credit, treasurer’s checks, escrow accounts, or other instruments promising reimbursement for lender losses. The bill also adds a requirement that the Authority must determine a loan will have "substantial economic impact" before approving a guarantee, considering factors like job creation and loan terms. This directly affects small businesses seeking loans (applicants) and financial institutions providing those loans by making guarantee options more flexible and adding a new review step. The changes take effect October 1, 2025.