Garbarino Co-Led Bill To Increase Access To Capital For Small Businesses Passes House

Washington, D.C. - Today, the House of Representatives voted overwhelmingly to pass H.R. 400, The Investing in Main Street Act of 2023, a bipartisan bill co-led by Congressman Andrew R. Garbarino (R-NY-02) and Congresswoman Judy Chu (D-CA-28). The legislation designed to increase access to capital for small businesses was introduced last Friday, January 20th, and referred to the House Committee on Small Business. 

The Investing in Main Street Act of 2023 amends the Small Business Investment Act of 1958 by increasing the amount that certain banks and savings associations may invest in Small Business Investment Companies (SBICs) from 5 percent to 15 percent, subject to the approval of the appropriate federal banking agency.

“Small Businesses are major contributors for economic growth and prosperity, especially in my district on Long Island,” said Rep. Garbarino. “As we face economic uncertainty due to inflation, labor shortages, and other ongoing challenges, we look to our small businesses to be leaders in the private sector and to help revitalize our communities. This legislation will ensure that small businesses can gain access to the additional capital they need to do just that. I thank Congresswoman Chu for leading this effort and I applaud my colleagues in the House for moving swiftly to pass this important legislation.”

“America’s entrepreneurship rates are soaring as we emerge from the COVID-19 pandemic. To ensure that trend continues, we must make sure small businesses have the capital they need to succeed,” said Rep. Chu. “Small Business Investment Companies are one of the best ways to deliver these investments, but for too many years, an outdated law has limited the amount that could be invested in them. That is why I am proud the House today passed my bill, the Investing in Main Street Act, which could triple the amount of investment capital available to our country’s small businesses.” 

“SBICs are designed to help American small businesses grow,” said SBIA President Brett Palmer. “Removing barriers to small businesses seeking growth capital is simply good public policy.”

The SBIC program is an investment program with a Small Business Administration (SBA) guarantee that increases access to low-cost, government-backed investment capital for high-growth, start-up businesses. Even though current banking regulations permit financial institutions to invest up to 15% of their capital and surplus into SBICs, small business investing rules established in the Small Business Investment Act of 1958 cap these same investments at only 5%. The Investing in Main Street Act would amend this outdated law to allow banks to invest the full 15% in SBICs.

The SBIC funds represent approximately $30 billion in investment capital, which have helped create or sustain more than 9.5 million jobs since 1995. And in the year 2022 alone, SBICs provided $7.9 billion in funding to over 1,200 small businesses and startups.

Read the bill text HERE.

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