The Investments in Innovation Act of 2025 amends federal small business investment rules to help direct more capital toward businesses owned by socially and economically disadvantaged entrepreneurs. Specifically, the bill allows Small Business Investment Companies (SBICs) to exclude certain investments in disadvantaged-owned businesses when calculating how much they can borrow, giving these investment firms more borrowing capacity if they commit to investing at least 50 percent of their funds in such businesses. Companies that meet this commitment threshold can borrow up to 300 percent of their private capital (or $175 million, whichever is less), and multiple related companies combined cannot exceed $250 million in total leverage. The bill is designed to expand access to investment capital for underrepresented entrepreneurs while encouraging SBICs to focus on diversity and economic inclusion in their investment portfolios.
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