U.S. Rep. Blaine Luetkemeyer (MO-9) introduced legislation aimed at making one of the Small Business Administration’s (SBA) capital access programs more effective and responsive to the needs of our country’s small business owners. The legislation will help create jobs by expanding access to small business investment companies without additional costs to taxpayers. 

“We must do all we can to expand opportunities for small businesses because they play a major role in innovation and economic expansion, and this bill will allow small business folks to thrive and grow while ensuring that taxpayer dollars are used wisely by ensuring transparency in the process,” said Luetkemeyer, a member of the House Small Business Committee. “It is time to give a real boost to our small businesses and stop trying to spend our way out of this economic crisis on the backs of small businesses.”

Luetkemeyer’s H.R. 3740, the Small Business Investment Company Modernization and Improvement Act of 2009, updates and streamlines the SBA’s largest investment program, the Small Business Investment Company (SBIC). The legislation aims to increase the number and size of investments made in small firms under the program. Perhaps equally important, the bill endeavors to halt the continued flight of SBICs that participate in the program by establishing an expedited licensing process. This would keep successful SBICs that are in good standing involved in the program.

The legislation will also revise the SBIC leverage limitations to create an incentive for well-managed SBICs to remain in the program. This will be possible by allowing SBICs that are managed by the same management team to access the increased leverage limits available for a family of SBIC funds. Additionally, businesses will have access to greater investment under the provisions of the bill that expand the Energy Saving Debenture program and increase the amounts of leverage available to invest in veteran-owned businesses.

Burdensome SBA regulations that limit businesses’ ability to prepay SBIC leverage will also be eliminated, enabling businesses to prepay a safe amount of their SBIC investment without prior approval from the SBA. This change will provide businesses with greater flexibility in managing the investment funds they receive under the program. Finally, the bill makes a number of technical revisions to the SBIC program that will increase the overall efficacy of the program.