Badge-to-Business Act
- Sponsor
- Rep. Bresnahan, Robert P. [R-PA-8]
- Committees
- Small Business Committee (primary)
- Last action
- Sep 10, 2026
Bottom line
The Badge-to-Business Act seeks to incentivize entrepreneurship among experienced law enforcement officers by eliminating a federal loan guarantee fee on SBA express loans, potentially reducing their startup costs.
What it actually does
This bill amends the Small Business Act to exempt qualified career law enforcement officers from paying the guarantee fee on Small Business Administration (SBA) express loans. This aims to reduce the cost of accessing capital for these individuals when starting or expanding small businesses. The exemption applies to loans made on or after January 1, 2027, but includes a waiver provision allowing the SBA Administrator to reinstate the fee if the cost to the SBA for guaranteeing these specific loans exceeds zero for a fiscal year.
Proponents argue
Supporters argue that this bill recognizes the significant public service of career law enforcement officers by making it easier and more affordable for them to transition into small business ownership. They contend that reducing the financial barrier of the guarantee fee will encourage these experienced individuals to contribute to the economy through entrepreneurship, leveraging their skills and discipline in new ventures, and fostering local economic growth.
Opponents contend
Critics might argue that while the intent is laudable, this bill creates a carve-out for a specific profession, potentially setting a precedent for other groups to seek similar exemptions, which could complicate the SBA's fee structure and potentially increase costs for other borrowers or taxpayers if the waiver is not exercised. Some may also question whether the guarantee fee is a significant enough barrier to warrant a targeted exemption.
The bill is very short and can be read quickly, allowing ample time for a thorough evaluation of its specific provisions and implications.
Section 2, amending Section 7(a)(31) of the Small Business Act (15 U.S.C. 636(a)(31))
Exemption from Guarantee Fees for Qualified Career Law Enforcement Officers on SBA Express Loans
This provision directs the Small Business Administration (SBA) to stop collecting the guarantee fee on express loans issued to individuals who meet the definition of a "qualified career law enforcement officer." This exemption is set to begin on January 1, 2027. The bill includes an important exception, allowing the SBA Administrator to reinstate the fee if the cost of guaranteeing these specific loans becomes greater than zero for a fiscal year, and such cost is directly attributable to the guarantee.
Supporters argue
Supporters argue that eliminating this fee directly lowers the barrier to entry for a deserving group of public servants to start or grow small businesses. They believe it's a tangible way to support those who have dedicated their lives to public safety, helping them transition into new careers and contribute to local economies without facing an additional federal charge.
Critics contend
Critics might contend that while supporting law enforcement is important, this specific exemption could be seen as preferential treatment, potentially diverting resources or increasing costs for other small business owners who still pay the fee. They may also argue that the fee itself is a necessary mechanism to offset the risk to the taxpayer for guaranteed loans, and waiving it could lead to greater federal exposure.
Tradeoffs
The bill balances the desire to support a specific group of public servants with the principle of maintaining a consistent and equitable fee structure across all SBA loan programs. It also navigates the tension between providing financial incentives and ensuring the fiscal soundness of federal loan guarantee programs through the inclusion of a waiver provision.
Defines "qualified career law enforcement officer" as an individual with not less than 10 years of service as a career law enforcement officer (referencing 34 U.S.C. 10389) and a clean record regarding pending criminal investigations or administrative proceedings involving alleged misconduct related to official duties.
Section 2, subparagraph (I)(iii)
Why it matters:Referencing existing definitions is standard legislative practice for brevity and consistency with existing federal law. The misconduct clause is a necessary safeguard to ensure the integrity of the program.
Case for: Supporters argue that a clear, externally referenced definition ensures consistency with existing federal law and prevents ambiguity, while the misconduct clause protects the integrity of the program by ensuring benefits go to deserving officers.
Case against: Critics might argue that relying on an external definition makes the bill less self-contained and harder for the average reader to fully understand without looking up additional statutes.
Estimated impact: This definition precisely limits the eligible pool of beneficiaries, ensuring the program targets experienced and reputable law enforcement professionals.
Allows the SBA Administrator to waive the guarantee fee exemption if the cost to the Administration for making such loans is greater than zero for a fiscal year, and such cost is directly attributable to the cost of guaranteeing such loans.
Section 2, subparagraph (I)(ii)
Why it matters:This is a standard legislative safeguard to prevent unforeseen fiscal burdens on the federal government, ensuring the program remains fiscally responsible and allowing flexibility for the SBA to manage risk.
Case for: Proponents would highlight this as a responsible fiscal measure, ensuring the program does not become an undue burden on taxpayers and allowing flexibility for the SBA to manage risk.
Case against: Opponents might argue that this waiver clause introduces uncertainty for potential borrowers, as the benefit could be revoked, undermining the incentive the bill aims to create. It also gives significant discretion to the Administrator.
Estimated impact: This clause acts as a fiscal backstop, potentially limiting the long-term cost of the program to the federal government and ensuring the SBA's financial stability.