Small Business Loan Reform Act of 1979

Small Business Loan Reform Act of 1979 - Amends the Small Business Act to empower the Small Business Administration (SBA) to guarantee or insure loans to small business concerns directly through banks and other private financial institutions. Requires the SBA to certify a financial institution according to published criteria developed in cooperation with appropriate regulatory agencies. Allows a financial institution to be certified to participate in the loan program if its respective regulator verifies that the institution has the necessary expertise to make small business loans. Stipulates that qualified financial institutions shall be responsible for all loan administration functions, including size determination of the small business concern, credit analysis, loan monitoring, and loan collection and liquidation.

Stipulates that such SBA loans shall not: (1) be extended if financial assistance is otherwise available on comparable terms from non-Federal sources; (2) be insured in excess of 90 percent of the balance of the loan outstanding at the time of disbursement; (3) be made for a period exceeding ten years, except that portion of a loan made for the purpose of acquiring real property; and (4) exceed $350,000 each.

Requires that lending institutions pay to the SBA a guarantee fee or insurance premiums. Stipulates that the amount of such fee shall be determined actuarially to cover all anticipated future loan losses. Authorizes the SBA to reimburse a qualified financial institution which has made a good faith effort to recover all unpaid amounts if there is a default on an SBA loan.

Requires regulators in their routine examination or audit of financial institutions to review an appropriate number of outstanding SBA loans made under authority of this Act. Directs the SBA to examine annually small business lending companies. Requires regulators to determine if commonly accepted lending practices have been followed by financial institutions qualifying to make loans under authority of this Act. Allows the SBA to decertify a financial institution if in the course of the routine examination an unsatisfactory report is made or losses rise above a certain fixed percentage as determined by the SBA.

Requires that a qualified financial institution file only an abbreviated report with the SBA, retaining all other information needed for compliance for examination by the regulator during the routine audit. Allows the SBA to require that only a small business concern receiving a loan under authority of this Act be certified as a small business according to SBA size standards.

Establishes within the Treasury a separate revolving fund for guarantees or insurance which shall be available to the SBA without fiscal year limitation.