House Passes Rep. Chu Bill To Increase Investments in Small Business Startups

Statement

Today, the House voted to pass H.R. 4256, the Investing in Main Street Act of 2021, introduced by Rep. Judy Chu (CA-27). This bill would amend the Small Businesses Investment Act of 1958 to increase the percentage of capital and surplus that a bank or federal savings association may invest in Small Business Investment Companies (SBICs) to match current banking regulations. The SBIC program is an investment program with a Small Business Administration (SBA) guarantee that increases access to capital for high-growth, start-up businesses. Currently, SBICs cannot take capital investments from banks that have more than 5% of the institution's capital and surplus invested in SBICs, however banking regulation permits investments up to 15% of the banks' capital and surplus. Rep. Chu, a member of the Small Business Committee, released the following statement:

"As we look to recover from the coronavirus pandemic, small businesses are going to be an essential engine for growth. But for that to happen, we need to make sure they have the capital they need to succeed. Small Business Investment Companies, or SBICs, are one of the best ways to deliver these investments, but for too many years, banking rules have limited the amount that could be invested in SBICs. That is why I am proud the House today passed by bill, the Investing in Main Street Act, which could triple the amount of investment capital available to our country's small businesses."

The Investing in Main Street Act passed by a vote of 413-10.

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