SBIA Legislative & Regulatory Agenda
The Small Business Investor Alliance is the association of senior investment professionals focused on the lower middle market whose members represent the entire private capital ecosystem. It is an alliance for professional fellowship, business opportunities, innovation, regulatory expertise, and market data.
- Preempt any state registration requirements of those advisers solely advising SBIC funds;
- Allow advisers to Venture Capital (VC) funds to continue to be “exempt reporting advisers” should they also advise an SBIC fund; and,
- Prevent the inclusion of the assets of an SBIC fund in the SEC registration calculation of AUM for those advisers that advise private funds in addition to SBIC funds.
- SBICs that hold multiple licenses under the same management umbrella – otherwise known as “Family of Funds” – are currently restricted from accessing SBIC leverage above a statutory cap of $225 million.
- This statutory cap is currently restricting proven small business investors from accessing new SBIC leverage. Approximately 30% of debenture “Family of Funds” in the SBIC Program are hitting the cap or risk hitting the cap if they raise their next fund.
- If Congress increases this cap, SBIA estimates that SBICs will facilitate up to $750 million a year in new small business investing.
- SBIA’s foremost tax priorities were presented in the tax comment letter, including:
- Maintaining the capital gains tax treatment of carried interest;
- Preserving the unique features of partnership taxation;
- Encouraging investment in small businesses by reducing the capital gains rates on qualified investments;
- Maintaining the deductibility of interest on debt; and
- Making improvements to the regulated investment company section of the code.
- Provides an incentive to SBICs to invest in presidentially declared disaster areas by not counting any investments against the single fund cap or the family of funds cap. Eligible investments must be made within a year of the disaster declaration.
- Allows the Administrator to prioritize applications to the SBIC program that are located in Presidential declared disaster areas.
View the SBIA Capital Formation Agenda: Legislative Recommendations for Members of the 114th Congress. These legislative recommendations, when enacted into law, will provide the essential means to increasing capital to small businesses.
View the SBIA Business Development Companies (BDC) Modernization Agenda: Legislative Recommendations for Members of the 115th Congress.