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Rep. Chu Introduces Bill to Increase Investment in Small Businesses

May 4, 2017

WASHINGTON, DC – Today, Rep. Judy Chu (CA-27) introduced the Investing in Main Street Act along with Rep. Grace Meng (NY-06) and Rep. Steve Knight (CA-25). 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:

"Small businesses are the backbone of our economy, accounting for two out of every three new jobs. And so, as part of our commitment to creating opportunities and growing our economy, it's our responsibility to help more small businesses succeed. But I know, from talking to entrepreneurs in my district and around the country, that one of the greatest challenges to success is access to capital. That is what this bill will address, by letting banks or federal savings associations invest up to 15% of their holdings into SBICs. That will mean more entrepreneurs will be able to access the capital they need to grow their business and hire more workers."

The text of the legislation can be found here.