The SBIC program is an investment program with a Small Business Administration (SBA) guarantee that increases access to capital for high-growth, start-up businesses.
This provision in the NDAA, H.R. 2364, amends the Small Business Investment Act of 1958 to increase from 5% to 15% of its capital and surplus, the amount a national bank, a member bank of the Federal Reserve System, a nonmember insured bank (to the extent permitted under applicable state law), or a federal savings association may invest in one or more small business investment companies (SBICs), or in any entity established to invest solely in SBICs. The increase is subject to the approval of the appropriate federal banking agency.
The bill will assist small business in obtaining venture capital and private equity (source). Anything we can do to stimulate the flow of more investment from normal capital flows, like banks and chartered SBICs, is definitely a good thing for small businesses. And as you know, that’s the engine of growth that we follow in this blog.
While this may seem a small thing, these SBICs are major players in the growth and financing of small businesses across the country and in “main street” America. And the good news is this is one of those drafted regulations that can be adjusted fairly easily and produce substantial results. Across the board, we’ve actually tripled the funding available for these SBIC entities.
