“Investing in Main Street Act” Advances
House bill would allow banks to invest more capital in Small Business Investment Companies
WASHINGTON, DC (July 29, 2021) – The “Investing in Main Street Act” (H.R. 4256) today passed out of the House Committee on Small Business with bipartisan support. Next, the bill will advance to the House floor for consideration. The legislation would allow certain banks and savings associations to invest more into small business investment companies (SBICs) by lifting an outdated statutory cap, while ensuring bank regulators maintain sufficient oversight over bank investment in SBICs. The Small Business Investor Alliance (SBIA), the association for private equity funds investing in American small businesses, has expressed strong support for the bipartisan legislation which was introduced by Rep. Judy Chu (D-CA) and Rep. Andrew R. Garbarino (R-NY). Companion legislation has been introduced in the Senate (S.2451) by U.S. Senators Todd Young (R-IN), Tammy Duckworth (D-IL), and Jim Risch (R-ID).
“SBICs are powerful vehicles for capital access,” said SBIA President Brett Palmer. “This bill would release more capital investment into American small businesses by increasing the amount that banks and federal savings associations may invest in SBICs. Expanding access to capital, supporting the growth of small businesses and creating jobs is a win-win for all Americans.”
H.R. 4256 would amend the Small Business Investment Act of 1958 to allow a bank or federal savings association to invest up to 15% of their capital and surplus in SBICs, still subject to the approval of the bank regulator if above 5%. This would correct the mismatch between bank regulations and small business investment law without amending bank laws or regulations.
SBIA has long been a proponent of market-driven solutions to capital access and inclusivity. Small business investors want to work with the Administration and Congress on a bipartisan basis to promote policies that expand the benefits of free enterprise to all Americans.
About the Small Business Investor Alliance (SBIA)
The Small Business Investor Alliance (SBIA) is the premier organization of lower middle market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for over 60 years. For more information, visit www.SBIA.org or call (202) 628-5055.