S-2562-119
Read twice and referred to the Committee on Small Business and Entrepreneurship.
Sponsored by James Risch (R-ID)
What it does
This bill would prohibit the Small Business Administration (SBA) from adopting any policy, practice, guidance, or directive that denies or discriminates against loan or loan guarantee applicants solely because they are part of the firearms industry. It would cover firearm manufacturers, retailers, distributors, importers, and marketers, as well as affiliated businesses such as shooting ranges, firearms instruction providers, and industry trade associations. The bill would apply to all financial assistance programs under the Small Business Act and the Small Business Investment Act of 1958.
Who benefits
Small firearms manufacturers, retailers, distributors, and importers who apply for SBA loans or loan guarantees. Shooting ranges and firearms instruction businesses that may have been denied SBA assistance due to their industry affiliation. Firearms trade associations seeking SBA-backed financing. Employees of these businesses who may benefit from their employers having greater access to capital. Rural and small-town economies where firearms-related businesses are often significant employers. Firearms accessories and equipment makers (e.g., scope, holster, and cleaning kit manufacturers).
Who is hurt
Advocacy groups and communities that oppose expanded access to capital for the firearms industry may view this as a setback. SBA administrators would lose discretion to apply industry-based eligibility criteria. Competing small businesses in other industries that do not receive similar statutory protections from SBA policy changes. Taxpayers who bear the risk of SBA loan guarantees if default rates in the firearms sector are higher than average.
Supporters argue
Supporters argue that the SBA has previously issued guidance — including its 2017 "Ineligible Businesses" policy — that effectively excluded otherwise creditworthy firearms businesses from federally backed lending programs, placing them at a competitive disadvantage relative to other legal industries. They contend that firearms businesses are lawfully operating under federal and state law, pay taxes, and employ hundreds of thousands of Americans, and that denying them equal access to government lending programs amounts to viewpoint-based discrimination against a constitutionally protected industry. They further argue that Congress, not an executive agency, should determine which legal industries are eligible for federal assistance.
Opponents argue
Opponents argue that the SBA has historically exercised legitimate discretion to exclude certain higher-risk or socially sensitive industries from taxpayer-backed loan programs — a practice upheld by courts — and that this bill would strip the agency of that risk-management authority for one specific industry. They contend that firearms businesses already have access to private lending markets and that a statutory carve-out creates a special privilege not available to other industries facing similar SBA eligibility questions, such as cannabis businesses or adult entertainment. They further argue that tying the SBA's hands on industry-based criteria could expose taxpayers to increased default risk if the firearms retail sector faces economic headwinds.