Small Business Reports
SmallBusinessReports.org
-by Editors
"I support two bills in the US Senate, S. 1994 and HR. 116,
UPDATED July 15, 2019 -- Small Business Reports --
USA
Investing
in Main Street Act of 2019
“I agree
that small businesses need greater access to capital available for expansion, operations,
and
refinancing so they can grow and create jobs.
I support the two bills in the US Senate, HR. 116 and S. 1994,
by the same name, Investing in Main Street Act of 2019.”
If you do, please say so by emailing
the note above to:
office@SmallBusinessReports.net
You also
could speak to your Senator and Representative directly with the same
note by email, fax, phone and USPS mail.
Please tell them we sent you.
California Rep. Judy Chu (D-27) introduced HR. 116 in the Senate
January 3, 2019. The bill was passed by the House of Representatives
in 2017.
Senator
Todd Young (R-IN) introduced S. 1994 in the Senate July 26, 2019.
A shocking 73% of small businesses are turned away for conventional
loans by banks.
The
bills would increase investment in small businesses by permitting
banks to invest up to 15 percent of their capital and surplus in
Small Business Investment Companies (SBIC). The increase in capital
for the SBIC program would be deployed to domestic small businesses
at no cost to the taxpayer.
The SBIC is one of the largest fund-of-funds in the United States and can invest up to $4 billion annually. The SBIC program issues debt to venture capitalists, private equity funds and other vehicles that invest in America’s small, but scaling, businesses. Over the past five years, the program has channeled more than $21 billion of capital to more than 6,400 U.S. small businesses spanning a variety of industries across the country. Some of America’s most iconic brands have received funding from SBICs.
The Investment Company Act of 1958 established the Small Business
Investment Company (SBIC) Program, under which the Small Business
Administration (SBA) licensed,
regulated and helped provide funds for privately owned and operated
venture capital investment firms. They specialized in providing
long-term debt and equity investments to high-risk small businesses.
Its creation was the result of a Federal Reserve study that
discovered, in the simplest terms, that small businesses could not
get the credit they needed to keep pace with technological
advancement.
The SBIC
program was started to stimulate long-term investment in American
small businesses. One of the main advantages of SBICs is their
ability to access low-cost leverage provided by the SBA—often up to
$2 of SBA leverage for every $1 of private capital.
The Small Business Investment Companies Program, or SBIC, is an
investment program with an SBA guarantee that increases access to
capital for high-growth businesses including start-ups. Already, SBIC funding
has helped companies like Tesla, Apple, and Intel get off the ground
when they were considered to be small businesses. But a 60-year-old
law – the Small Business Investment Act of 1958 - capped how
much banks or federal savings associations may invest in SBICs at 5%
of their capital and surplus. The "Investing in Main Street Act of
2019" amends that outdated law to increase to 15% of the capital and
surplus that a bank or federal savings association may invest in
SBICs.
The SBIC Program has evolved into a significant factor in financing
smaller American businesses. From the SBIC Program's inception to
December 31, 2018, SBICs have provided approximately $97.6 billion
of funding in more than 181,185 financings to businesses, including
well-known companies such as Amgen, Apple Computer, Costco, Federal
Express, Intel, Tesla and Whole Foods.
Investing
in Main Street Act of 2019 116th CONGRESS 1st Session S. 1994 IN THE SENATE OF THE UNITED STATES June 26, 2019 Mr. Young (for himself, Ms. Duckworth, and Mr. Risch) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Small Business Investment Act of 1958 to increase the amount that certain banks and savings associations may invest in small business investment companies, subject to the approval of the appropriate Federal banking agency, and for other purposes. Short title
This Act may be cited as the Investment in small business investment companies Section 302(b) of the Small Business Investment Act of 1958 (15 U.S.C. 682(b)) is amended—
in paragraph (1), by inserting before the period at the
end the following:
in paragraph (2), by inserting before the period at the
end the following: by adding at the end the following: Appropriate federal banking agency defined In this subsection, the term appropriate Federal banking agency has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
Technology Is Transforming and Shaping a New Era
of Small Business Opportunity Small businesses are responsible for employing nearly half of the American workforce and creating two thirds all of all new jobs. Small businesses are the cornerstone of our economy and their employees are the backbone of our nation.
It is the thirty million small businesses,
not the government, that create jobs and drives
new ideas and innovation.
Small businesses are therefore the backbone of
the U.S. economy. They are the biggest job
creators and offer a path to the American Dream.
But for many, it is difficult to get the capital
they need to operate and succeed.
In
the Great Recession, access to capital for small
businesses froze, and in the aftermath, many
community banks shuttered their doors and other
lenders that had weathered the storm turned to
more profitable avenues. For years after the
financial crisis, the outlook for many small
businesses was bleak. But then a new dawn of
finance technology, or “fintech,” emerged.
Fintech entrepreneurs recognized the gaps in the
small business finance market and revolutionized
the customer experience for small business
owners. Banks scrambled to catch up. Technology
companies entered the market and new
possibilities for even more transformative
products and services began to appear.
New streams of data have the power to illuminate
the opaque nature of a small business’ finances,
making it easier for them to weather bumpy cash
flows and providing more transparency to
potential lenders.
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