Small Business Reports
business journal for business owners

 -by Editors

Investing in Main Street Act of 2019

"I support two bills in the US Senate, S. 1994 and HR. 116,
to expand access to capital available for small businesses."


- not a paid political announcement -


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.”

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     The two bills are identical with the same name, Investing in Main Street Act of 2019.


    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 copy of S. 94 is printed below.

    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 SBA was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.  The US Senate Committee on Small Business & Entrepreneurship oversees the SBA.

    SBA regulations define a “Small Business” as a company with tangible net worth (total net worth less goodwill) of less than $19.56 million and average after-tax income (exclusive of loss carry-forwards) for the prior 2 years of less than $6.5 million. SBA further defines a Small Business by number of employees which varies by NAICS industry classification, but roughly from 500 to 1,500 employees.


    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


1st Session

S. 1994


June 26, 2019

(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


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 Investing in Main Street Act of 2019.


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: or, subject to the approval of the appropriate Federal banking agency, 15 percent of such capital and surplus;


in paragraph (2), by inserting before the period at the end the following: or, subject to the approval of the appropriate Federal banking agency, 15 percent of such capital and surplus; and


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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