A bill to authorize the appropriation of funds to the Small Business Administration, and for other purposes.

Amends the Small Business Act to limit direct financing with respect to loans to small businesses for plant acquisition, construction, conversion, or expansion unless: (1) it is shown that a participation is not available; (2) the applicant is a prospective business or one which has commenced operations within the preceding 18 months; and (3) it is accompanied by an additional 25 percent in funds from non-Federal sources. Decreases the dollar amount of immediate participation loans with respect to small business plant acquisition, construction, conversion, or expansion. Limits to ten years the period of time on direct or immediate participation loans to small businesses. Prohibits deferred participation on loans for such plant acquisition, construction, conversion, or expansion.

Authorizes program levels for FY 1986 through 1988 to the Small Business Administration (SBA) for direct and immediate participation loans for small business plant acquisition, construction, conversion, or expansion. Makes specified amounts available out of such authorization for: (1) handicapped persons and organizations for the handicapped; (2) small businesses either located in urban or rural areas with high unemployment and low incomes or owned by low-income individuals; and (3) disabled veterans and Vietnam veterans. Prohibits loans for small businesses which design, manufacture, and distribute energy measures.

Authorizes program levels for FY 1986 through 1988 for deferred participation loans and debenture guarantees for small business plant acquisition, construction, conversion, or expansion and small business development companies under the Small Business Investment Act of 1958. Makes specified amounts available out of such authorization for: (1) handicapped persons and organizations for the handicapped; (2) small businesses either located in urban or rural areas with high unemployment and low income or owned by low-income individuals; (3) small businesses which design, manufacture, and distribute energy measures; and (4) guarantees of debentures with respect to State and local development companies.

Authorizes program levels for FY 1986 through 1988 under specified sections of the Small Business Investment Act of 1958 for: (1) direct purchases and guarantees of debentures and purchases of preferred securities with respect to small business investment companies; (2) surety bond guarantees under the Small Business Investment Act of 1958; and (3) payment guarantees for the installation of pollution control facilities by small businesses.

Authorizes appropriations to the SBA for FY 1986. Makes specified amounts available out of such authorization for: (1) direct and immediate participation loans for small business plant acquisition, construction, conversion, or expansion, handicapped persons and organizations for the handicapped, small businesses either located in urban or rural areas with high unemployment and low income or owned by low-income individuals, and Vietnam veterans; (2) deferred participation loans and debenture guarantees for small business plant acquisition, construction, conversion, or expansion and small business development companies; (3) deferred participation loans to handicapped persons and organizations for the handicapped, small businesses either located in urban or rural areas with high unemployment and low incomes or owned by low-income individuals, small businesses which design, manufacture, and distribute energy measures; (4) guarantees of debentures with respect to State and local development companies; (5) direct purchases and guarantees of debentures and purchases of preferred securities with respect to small business investment companies; (6) surety bond guarantees under the Small Business Investment Act of 1958; and (7) SBA salaries and expenses.

Authorizes appropriations for FY 1986 for disaster loans to small businesses and permits the transfer of funds from the disaster loan revolving funds for the payment of SBA administrative expenses.

Authorizes program levels for FY 1987 and 1988 under the Small Business Act for direct disaster loans and loans necessitated by Federal action to small businesses.