S 305: Small Business Technological Act of 2025

S 305 in plain English: This bill is early in the legislative process and detailed text is not yet available. Sponsor: Sen. Young, Todd [R-IN] (R) · Status: Committee on Small Business and Entrepreneurship. Hearings held.

Stated purpose

To allow small businesses to use existing Small Business Administration (SBA) loans to pay for modern business software, cloud computing services, and related technology tools, including those that use artificial intelligence.

Arguments supporters make

• Many small businesses cannot afford modern software upfront, and access to SBA loans for these tools would help them compete with larger companies that already use them.
• Clarifying that software and AI tools are eligible loan uses removes uncertainty for both lenders and borrowers, making it easier to get approved for this type of spending.
• Updating small businesses with better technology can improve productivity, reduce errors in payroll and accounting, and help them grow and create jobs.

Arguments opponents make

• Software and subscriptions are ongoing costs, not one-time investments, so using long-term loans to pay for them could leave small businesses in debt for tools they may stop using or that quickly become outdated.
• The bill does not create new funding — it only expands what existing loans can cover — so small businesses that already struggle to qualify for SBA loans would see no new benefit.
• Critics may argue this primarily benefits technology companies by steering loan dollars toward software purchases, rather than addressing more fundamental barriers small businesses face.

Tradeoffs

Expanding loan eligibility gives small businesses more flexibility to modernize, but taking on loan debt for recurring software costs could increase financial risk for businesses with uncertain or seasonal revenue.

Current status in Congress: In committee.