Investing in All of America Act of 2023
Floor Speech
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Mr. MEUSER. Mr. Speaker, I thank our chairman, Mr. Roger Williams from the great State of Texas, for yielding and for his leadership.
Mr. Speaker, I rise today during National Small Business Week in support of H.R. 5333, the Investing in All of America Act of 2023, introduced by myself and Representative Scholten. This legislation aims to incentivize greater private capital investments in small businesses located in rural or low-income areas, and those operating in the national security sector by providing additional bonus leverage for funds participating in the SBA's SBIC program.
The Small Business Investment Companies are privately owned companies that are licensed and regulated by the SBA. SBICs raise private capital that is matched with leverage by the SBA, currently capped at $175 million for individual licensees. SBICs then deploy these private funds, along with the SBA-guaranteed funding, to invest directly in small businesses.
It is important to note that the SBIC leverage operates at zero subsidy cost to the American taxpayer. In other words, taxpayer funds are not utilized for the credit extended in SBIC investments.
Throughout the last two decades, SBIC-backed businesses have created 5 million new jobs and supported an additional 10.5 million jobs. Last year alone, SBICs invested over $8 billion in small businesses across America, including $412 million in small businesses located in my home State, the Commonwealth of Pennsylvania.
Though, the SBIC program has been very successful in responsibly deploying capital to small businesses, recent studies have shown that close to 20 percent of the SBIC investment reaches only 20 percent of low- to middle-income communities, but with this legislation this number will significantly increase.
The Investing in All of America Act would incentivize the deployment of additional capital to small businesses located in rural or low- income areas as well as small businesses, again, in the national security technology sector.
Dollars invested in these areas will not count against individual SBIC's $175 million leverage cap. By creating this incentive, the Investing in All of America Act will increase investment for these underserved communities.
It is important to note that the bonus leverage included in this legislation does not change the cost or risks of the SBIC program. The existing successful private capital ratio to SBA leverage that has kept the program operating at no subsidy will remain the same.
This legislation would also adjust the SBIC leverage caps to account for inflation. SBIC leverage caps have not been adjusted since 2015 for single licensees and since 2018 for a family of funds. Since the last adjustment, as we know, inflation has risen rapidly. As we continue to deal with increasing inflation, reinstating the inflation adjuster for the leverage cap is necessary to ensure the investment power of the SBIC's remain consistent with the broader markets and ensure the program can continue to provide small businesses with the capital they need.
Recently, the Subcommittee on Economic Growth, Tax, and Capital Access, which I chair, held a hearing examining the SBIC program. In addition to discussing the positive effects of the program, we discussed the improvements that could be made. I am happy to say that a number of the reforms suggested by the witnesses are included in this legislation.
While there is more work to do, this legislation will make a very positive impact on those participating in the SBIC program and assist them in deploying even more capital to these worthy small businesses.
Mr. Speaker, I thank Representative Scholten for her partnership on this legislation and the bipartisan group of 14 Members who have cosponsored it. Again, I thank Chairman Williams and the ranking member for their leadership and support of this legislation.
Mr. Speaker, I encourage a ``yes'' vote.
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