House Passes Rep. Chu Bill To Promote Small Business Startup Growth
Washington, DC — Today, the House voted to pass H.R. 116, the Investing in Main Street Act, 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:
“Before they became global leaders, companies like Apple, Tesla, and Intel required SBIC funding to get started. But a 60-year-old law which limits investment is making it harder for the next big startup to get off the ground. That is why I am so pleased that right at the start of this new Congress, the House voted to pass my Investing in Main Street Act. This bill will address one of the biggest problems small businesses face - access to capital – by letting banks or federal savings associations invest up to 15% of their holdings into SBICs. This means more money for entrepreneurs who want to hire new staff, buy new inventory, or grow their business. Accounting for two out of every three new jobs, our small businesses are too important to our economy to let them be hamstrung by a decades-old restriction. Today, we took an important step towards helping small businesses and I hope the Senate considers this bill soon.”
The Investing in Main Street Act passed by a vote of 403-2.