On Dec. 18, 2012, the House of Representatives passed H.R. 6504, the Small Business Investment Company Modernization Act of 2012, by a vote of 359-36. The bill makes it easier for the Small Business Administration (SBA) to provide funds to Small Business Investment Companies (SBIC Funds) by increasing the maximum amount of outstanding leverage allowed for multiple SBIC Funds from $225 million to $350 million. The bill also requires that such SBIC Funds be under common control and not under capital impairment.
Originally introduced on Sept. 12, 2012, by Rep. Steve Chabot, an Ohio Republican and member of the Small Business Committee, the bill had seven co-sponsors and received strong bipartisan support.
The SBIC Program is designed to operate on a zero-subsidy basis and boost small-business access to venture capital by supplementing the flow of private-equity capital and long-term loan funds.
The private equity practice group at McGuireWoods LLP is dedicated to keeping clients advised of new legislative and business developments as they occur. If you have any questions regarding these issues, please feel free to contact Mark A. Kromkowski (312.849.8170), Bryan P. Bylica (312.750.3617), your primary attorney at McGuireWoods LLP, or any of the authors.