This bill modifies the federal Small Business Investment Company (SBIC) program to increase lending capacity for investments in underserved communities and critical industries. Specifically, it raises the maximum amount of federal leverage (borrowed funds) that SBICs can access, and allows them to exclude certain investments from leverage limits when they fund small businesses in rural areas, low-income communities, critical technology sectors, or small manufacturers. For example, companies making quarterly or semiannual interest payments can now borrow up to $250 million individually (up from previous limits) and up to $475 million collectively if commonly controlled, with the ability to exclude up to $125 million or 50 percent of private capital invested in qualifying businesses from these calculations. The bill takes effect upon enactment and applies only to new investments made after the law passes. The legislation aims to direct more capital to small businesses in economically disadvantaged regions and emerging technology fields by reducing borrowing constraints on investors serving these areas.
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