Provided early funding to iconic companies like Apple, Tesla, Whole Foods, Intel, FedEx and Costco
(Washington, DC) – U.S. Senators Jim Risch (R-ID) and Ben Cardin (D-MD), Chairman and Ranking Member of the Senate Committee on Small Business and Entrepreneurship, and Senator John Kennedy (R-LA) today introduced bipartisan legislation to help a key Small Business Administration (SBA) program unlock startup capital for innovative small businesses with high-growth potential.
The Small Business Investment Opportunity Act modifies SBA’s Small Business Investment Company (SBIC) program by increasing the amount of capital that SBICs can invest in qualifying small businesses.
SBICs are privately-owned and managed investment funds that use their own capital – plus funds borrowed with an SBA guaranty – to capitalize small businesses. Over the past five years, the program has channeled more than $21 billion of capital to 6,400 American small businesses across a variety of industries.
“SBIC has a proven track record of steering essential capital to America’s most groundbreaking and promising ventures in Maryland and across the country,” said Senator Cardin. “Our bipartisan legislation will maximize the amount of funding SBIC can direct to the transformative small businesses that hire our workers, support our communities, drive innovation and help our country maintain its competitive edge.”
“I cannot overstate how important access to capital is for small business growth and success,” said Chairman Risch. “With the number of small business loans down 41 percent since 2008, it's even more important that SBICs are able to invest in small businesses in a robust way. SBICs provide critical capital to small businesses and this bill would ensure they are able to help even more businesses going forward.”
“There are nearly 430,000 Louisiana small businesses employing more than 900,000 people. Ensuring that small businesses have the access to the capital they need to start and grow their business is a top priority of mine,” said Senator Kennedy. “Small businesses are an economic engine. We want our community entrepreneurs and small businesses to grow, prosper and sign more paychecks every year.”
Since the program launched in 1958, SBIC has:
- Deployed more than $67 billion of capital;
- Made more than 166,000 investments in American small businesses; and
- Licensed more than 2,100 investment funds.
Some of America’s most iconic brands have received investment capital from SBICs, including Apple, Tesla, Whole Foods, Staples, Intel, FedEx and Costco, among others.
Under current law, SBA can guarantee up to $150 million of an SBIC with a single investment fund. The Small Business Investment Opportunity Act increases that cap to $175 million. The cap was last raised in 2009.
An identical bill cosponsored by Reps. Steve Knight (R-CA), Judy Chu (D-CA) and Carlos Curbelo (R-FL) passed the House in 2017. The Small Business Investment Opportunity Act is endorsed by the Small Business Investor Alliance.