WASHINGTON – Senators Mary L. Landrieu, D-La., and Olympia Snowe, R-Maine, Chair and Ranking Member of the Senate Committee on Small Business and Entrepreneurship, introduced legislation yesterday aimed at increasing access to capital for small businesses and entrepreneurs.
The bill would modify the Small Business Investment Company (SBIC) program to raise the amount of SBIC debt the Small Business Administration (SBA) can guarantee from $3 billion to $4 billion. It would also increase the amount of SBA guaranteed debt a team of SBIC fund managers who operate multiple funds can borrow. These two provisions are part of the Startup America Legislative Agenda that President Barack Obama sent to Congress on January 31, 2012. On March 22, Chair Landrieu will lead the committee in a roundtable with federal officials, SBIC fund managers, and companies to discuss potential additional modifications to the SBIC program.
“One of the most difficult challenges facing new small businesses today is access to capital,” Sen. Landrieu said. “One common sense way to solve this problem is to make these necessary changes to the already-successful SBIC program, which has helped companies like Apple, Fed Ex, Callaway Golf, and Outback Steakhouse become household names. These measures have bipartisan support in the Senate and have already been proposed by the president. There is no reason why Congress shouldn’t move quickly on this bill to ensure capital is getting into the hands of America’s job creators.”
“As entrepreneurs and other aspiring small business owners well know: it takes money to make money. This legislation ensures that our entrepreneurs and high-growth companies have access to the resources they need so they can to continue to drive America's economic growth and job creation in these challenging times," said Senator Snowe.
• SBICs are privately owned and operated funds that make long-term investments in American small businesses.
• SBICs are licensed and regulated by the SBA.
• SBICs use their own private money, plus money borrowed with an SBA guarantee.
• Typically, an SBIC will borrow $2 of SBA guaranteed funds for every $1 of private capital (“Debenture Program”)
• Since 1958, SBICs have invested $56 billion to more than 100,000 small businesses.